UPDATE 2-Sage shares driven to 12-year high by "cloud" computing uptake
* 2013 organic revenue growth doubles to 4 pct
* FY revenue 1.26 billion pounds
* Underlying op pft up 2 pct at 375.8 mln stg, meets f'casts
* Shares jump to 12-year high (Adds further comments, analyst reaction, updates shares)
By Paul Sandle
LONDON, Dec 4 (Reuters) - British software developer Sage Group Plc has posted a sharp rise in takeup for its "cloud" computing products and raised hopes of a further cash return to shareholders, sending its shares to a 12-year high.
Sage, whose products are used by more than 6 million businesses worldwide, said demand for cloud computing products such as accounting software SageOne was driving sales growth towards its 2015 target of 6 percent.
Chief Executive Guy Berruyer said the company's entry-level SageOne cloud-based product had more than 21,000 paying subscriptions in the UK, a threefold increase in the last 12 months, with more than 80 percent of them new names to Sage.
"The momentum we have seen in the second half leaves us confident of achieving our target of 6 percent organic revenue growth in 2015," Berruyer told reporters on Wednesday. "Our increased investment in new technology is paying off."
Cloud computing is an umbrella term for services such as email and business software offered remotely via the Internet.
Berruyer said the group was still looking for acquisitions in new countries, new markets and new technologies, but in the absence of any deals it would return more cash to shareholders.
"We have returned more than 1 billion pounds to shareholders in the last two years," he noted.
Analyst at Citi said Sage had delivered a strong set of numbers, marked by higher-then-expected organic growth. "With the momentum accelerating, we continue to see upside to the Sage story given its exposure to a recovering European economy and the potential for further cash returns," they said.
Some analysts had previously raised concerns that Sage was not moving to the cloud as quickly as the likes of Microsoft Corp.
But Milan Radia at brokerage Jefferies said the results would do much to alleviate any lingering concerns on Sage's cloud positioning and its organic growth trajectory.
Sage also posted 4 percent growth in underlying revenue to 1.26 billion pounds ($2 billion) for the year to end-September, double the rate of 2012, helped by a pick-up in Britain and demand for its cloud products.
Underlying operating profit rose 2 percent to 375.8 million pounds, in line with analysts' expectations.
The stock, which had risen 18 percent in the year to date, was trading up 7.6 percent at 374 pence at 0932 GMT, topping the FTSE 100 leaderboard.
The advance carried it to its highest level since 2001, when it was still retreating from peaks seen during the dot-com boom. ($1 = 0.6092 British pounds) (Editing by Louise Heavens and David Holmes)
- Malaysia air probe finds scant evidence of attack: sources |
- Malaysia probes passenger backgrounds for clues on missing flight |
- Confrontation in Ukraine as diplomacy stalls |
- N.Korea using sophisticated means to avoid U.N. sanctions - U.N. report
- Exclusive: Chinese raw materials also found on U.S. B-1 bomber, F-16 jets