The Sage Group plc has reported its revenues increased 8% year-on-year to £866m in the six months to 31 March 2022 (H1 FY22), compared to £800m in H1 FY21. This was underpinned by Sage Business Cloud revenues surging 21% from £471m in H1 FY21 to £572m.
Meanwhile, pre-tax profits dropped 1% year-on-year from £190m to £189m. Statutory operating profit remained stable at £204m (H1 21: £203m), including non-recurring net gains of £55m, compared to £37m in H1 FY21, which was driven by profit on disposals.
Sage said it witnessed “good” levels of organic growth in all regions, offset by disposals and foreign exchange headwinds in the international region, principally in relation to the Euro.
North America saw the largest sales increase of 11% year-on-year from £340m to £376m, while Northern Europe saw 6% growth from £200m to £212m. However, international sales dropped 13% year-on-year from £397m to £346m.
The company also disposed of its business in Switzerland and its South African payroll outsourcing business to increase focus on “core” geographies and completing the group’s disposal programme.
Sage said its focus on growing cloud revenues has increased Sage Business Cloud penetration to 72%, up 7% compared to H1 21. Renewal rates have also increased by value of 100%, ahead of last year which was 97%.
Additionally, the group’s interim dividend is up 4% to 6.3p. Sage’s outlook remains unchanged, with organic recurring revenue growth expected to be in the region of 8% to 9% in FY22, driven by strength in Sage Business Cloud, and in cloud native revenues in particular.
Meanwhile, Sage expects other revenues to continue to decline, in line with its strategy, while organic operating margin is expected to trend upwards in FY22 and beyond.
Steve Hare, CEO, said: “We achieved a strong first half performance, in line with expectations, demonstrating sustainable growth and building further momentum. Our strategic investment in sales, marketing and innovation has continued to accelerate revenues across Sage Business Cloud, underpinned by increasing levels of new customer acquisition.
“While we are mindful of increased macroeconomic and geopolitical uncertainties, our customers remain confident and resilient. Our aim is to knock down barriers to their success, delivering solutions that make their lives easier, and we continue to make good progress against our strategic objectives.”