* Guy Burruyer to step down by end-March 2015
* H1 operating profit up 8.9 pct
* Shares down 6 pct
(Adds CEO comments, analyst reaction, shares)
By Paul Sandle
LONDON, May 8 Sage Group Chief Executive
Guy Berruyer said on Thursday he would retire by March next
year, sending the British software company's shares down more
than 6 percent.
Berruyer said that by the time he retires the company would
be on track to to grow organic revenue by 6 percent, the best
rate during his four years in charge.
But Investec analyst Julian Yates said the retirement was
unexpected and may raise questions over the 2015 targets.
"We still remain cautious about the group hitting its 6
percent organic growth target, while necessary investment in the
business is likely to cramp margin expansion," he said.
Shares in Sage, which have risen by 52 percent since
Berruyer took over in October 2010, fell to five-month lows
after Berruyer announced his departure along with half-year
results that were just shy of analysts expectations.
Shares were trading down 5.5 percent at 399 pence at 1024
GMT, the worst performing stock in the FTSE 100.
"I am signaling I am going to retire but I'm not leaving
now," Berruyer said in an interview on Thursday. He said he
would be 64 next year and he had many other ambitions to
fulfill, including climbing Mont Blanc.
"We now have some momentum in the business," he said. "Some
of our technology initiatives are staring to pay off, and they
will continue beyond 2015, and that has led us to affirm our 6
percent organic revenue growth target for 2015."
Berruyer has focused on growing subscriptions from the
group's more than six million small- and medium-sized business
customers, countering a tough environment for software sales to
new enterprises, particularly in Europe.
Sage, which sells software to run accounts and payroll, said
organic revenue grew 4.9 percent in the six months to end-March
to 657 million pounds ($1.11 billion).
Organic operating profit rose 8.9 percent to 180 million
pounds, compared with expectations of 184.3 million pounds,
although margins were in line at 27.4 percent, 100 basis points
up on a year ago.
"The recurring part of our business is going very well, with
7 percent organic revenue growth, and that's a very solid basis
for our future," Berruyer said, adding that 72 percent of the
group's revenue was now recurring.
($1 = 0.5894 British Pounds)
(Editing by Kate Holton and Susan Thomas)