North East fintech firm Sage Group Plc has hailed a strong start to the year underpinned by rising recurring revenues.
Sage, a leader in accounting, financial, HR and payroll technology for SMEs, has issued a trading update for the three months ended December 31 2021 in which it saw group revenues rise by 5% to £458m.
It said recurring revenue grew by 8% to £429m, driven by a 21% rise in Sage Business Cloud revenue to £280m, with continued strength in new customer acquisition.
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Software subscription revenue at the firm, which has moved from Newcastle's Great Park to Cobalt Business Park in North Tyneside, also grew by 13% from £296m to £336m.
A geographical breakdown showed that its North American operations achieved growth in recurring revenue of 11% to £174m, while Northern Europe saw recurring revenue rise of 7% to £102m, driven by accelerating growth in cloud native solutions including Sage Accounting and Sage Intacct. In its international divisions, recurring revenue increased by 5% to £152m.
It said its Future Sage Business Cloud offer grew 10% to £394m and that other revenues decreased by 22% to £29m, in line with its strategy to move away from licence sales and professional services implementations.
The trading update comes a week after Sage completed acquisition of Brightpearl, a retail technology firm based in the South West.
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Sage first announced in December it would pay £225m to acquire the remaining stake in Bristol company Brightpearl, having first invested in the firm and taken a 17% stake 12 months earlier.
The group said the acquisition accelerates its strategy for growth, including scaling Sage Intacct, broadening the value proposition for mid-sized businesses and expanding Sage’s digital network.
The company added that sterling strengthened in the quarter against the US dollar and Euro, leading to an exchange rate headwind.
Jonathan Howell, chief financial officer, said: “Sage has made a strong start to the year, accelerating growth in line with expectations.
“Sage Business Cloud has performed particularly well, driven by continued growth in both cloud native and cloud connected solutions, as we execute on our strategy to be the trusted network for small and mid-sized businesses. Accordingly, we reiterate our guidance for the full year, as set out in our FY21 results announcement.”
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