Momentum is building across accountancy software business Sage's AI capabilities, its CEO has told BusinessLive on the back of steep increases in revenue and profits.
The North Tyneside-based tech giant has been "rapidly scaling" its generative AI assistant, Sage Copilot, which is now available to 40,000 customers in the º£½ÇÊÓƵ and helps finance teams with the monthly close process as well as analysis of their company's financial performance and day-to-day tasks. Steve Hare said substantial investment is being put into expanding the tool, with much of the work to increase the tech's autonomous capabilities being carried out by the FTSE100 firm's Tyneside-based engineers and developers.
Mr Hare said he was instructing teams to go further and faster with development work and added: "It's increasingly going to deliver for small and medium-sized businesses game changing productivity and is going to allow them to focus on looking forward and running their business. Because the recording of transactions, the history and the insights that come from that is going to be done by agents."
The update on Sage's AI focus comes amid an 8% rise in statutory revenue to £1.24bn, laid out in unaudited numbers covering the half year to the end of March. Statutory operating profit over the same period jumped 18% to £255m while underlying total revenue was up 9% to £1.24bn and underlying operating profit was up 16% to £288m.
Sage reported that its underlying operating profit margin grew 1.4 percentage points to 23.2%. Profit growth was said to have been helped by lower acquisition-related expenses. Full year revenue growth is now expected to be at least 9% as bosses noted more volatile and uncertain macroeconomic environment.
Growth came from all of the group's key markets, including 11% revenue gains in North America where bosses said the performance of Sage Intacct - the group's flagship product for mid-sized businesses - was good, along with growth in Sage 200 and Sage 50 platforms. In the United Kingdom, Ireland, Africa and APAC (º£½ÇÊÓƵIA) market, revenue was up 9% thanks to Sage Intacct and cloud-based products for small businesses including Sage 50. Meanwhile, in Europe, revenue grew 8% with growth from accounting, HR and payroll products.
Looking ahead, Mr Hare told BusinessLive: "As you look over the next six, 12 and 18 months, I'm incredibly optimistic. There is incredible technology that is going to help small businesses flourish. Even here in the º£½ÇÊÓƵ, if you look back over the last year or so, nearly a million new businesses have been created over the last 12 months. And that's a pattern that has been repeated every year since Covid.
"There is no shortage of people that want to go into business themselves. They want to create things and pursue their dreams. The technology is there to help them do that. The flip side is, it's noisy. I was reflecting with someone that you get up in the morning, get your cup of tea, and get your phone out. There is a lot of stuff there that can potentially make you feel unsettled, and when people are thinking about making investment decisions, some consistency and some calmness is helpful. And also, a positive narrative is helpful."
Shareholders were offered an interim dividend increase of 7% to 7.45p as a £200m extension to recent share buyback efforts was announced, and expected to close in early August.
