Sage Group is on its feet and moving forward and not just in terms of its financials. Listening to CEO Guy Berruyer discussing the full year 2011 results there was a sense that some serious and positive changes are working their way through this somewhat slow moving company.
The numbers were good. Revenue from continuing operations (ie excluding the dreadful North American Healthcare business which was finally shown the exit door, see here ) was up 4% organically to £1.33bn, compared to just a 1% revenue increase for the previous year.
North America is still flagging but doing better than before (revenue up 3% vs minus 5% for the previous year due to the infamous Healthcare division) aided by good progress in payment solutions. Management execution issues and a 6% fallback in SalesLogix CRM sales because the product was weak in some areas were identified as issues. Spain was also a disappointment but other areas performed well. Revenue from Europe as whole was up 4%. Within that UK & Ireland was slightly ahead with 5% organic growth with good performance in all market segments aided by launches such as Sage 50 Mobile, and Sage One and growth in Sage ERP X3, The Accountants' Division continues to perform. Growth was strongest in Africa, Australian, Middle East and Asia however where revenue was up 11%, 10% organically
Pre-tax profit rose by 8% to £352.6m and underlying earnings per share in 2011 were 20.81p up 16%. There was further good news on the margin front - EBITA margin increased to 27.4% from 26.4% - and cash generation (although some of that might have been better used for acquisitions).
But it was moves such as rebranding under the Sage banner rather than continuing disparate product-led branding (which we think has always weakened Sage’s impact on the market), the announcement that Sage One is to be adopted as the worldwide platform for the development of future small business online solutions (like X3 ERP), and the October acquisition of a BI vendor Alchemex (South African, sub £10m) which takes its into a growth area, that indicate Sage is starting to stir. We will look at Sage’s activities in more detail in HotViewExtra.