* FY results broadly in line
* Says France, Spain will be a drag on growth in 2013
* Shares down 2 pct
By Paul Sandle
LONDON, Dec 5 British software company Sage
Group said tough conditions for small businesses in
France and Spain would drag on growth in 2013.
The company, whose software is used by more than 6 million
small businesses to run payroll and accounts, said underlying
revenue edged up 2 percent to 1.3 billion pounds ($2.1 billion),
half the growth rate recorded in 2011, in the year to
France, Spain and Italy are among the biggest drags on the
euro zone economy, which is in its second recession since 2009.
The number of people out of work in France is at a more than
14-year high, and the country's economy has been virtually
stagnant since grinding to a halt at the end of last
year. Unemployment in Spain hit a a record high
of 25 percent in the third quarter.
Higher sales of services, such as IT support, helped
adjusted pretax profit rise 4 percent to 356.3 million pounds,
beating analysts' expectations.
Chief Financial Officer Paul Harrison said revenue growth
had improved to 3 percent in the second half, and he expected it
remain at that level in 2013.
"Within that we do expect to see the U.S. and North America
continuing to tick up a little, but we are pretty cautious about
Europe and in particular Southern Europe, where we saw a
slowdown in France, which is one of our largest businesses," he
told reporters on Wednesday.
Shares in Sage were down 2 percent at 304.85 pence by 1055
GMT, giving up almost all of its two-week run up.
George O'Connor, an analyst at Panmure Gordon, said revenue
was a little weaker and profit was a little better than his
expectations, but that overall Sage was struggling to grow.
"A faltering economic backdrop, coupled with a very wide
product array means that 'growth' should continue to elude it -
and the miss of note was to revenue expectations," he said.
Sage is paying a final dividend 6.67 pence per share, taking
the total payout for the year to 10.15 pence, up 4 percent.