Newcastle software giant Sage has reported strong half-year results but has warned that the economic outlook is uncertain as the coronavirus hits many of its SME customers.
The company reported growth in organic recurring revenue of 10.3% and said moves to transition customers to its Sage Business Cloud products were continuing well.
Sage has shut all of its offices during the coronavirus outbreak and chief executive Steve Hare paid tribute to staff at its Newcastle HQ and elsewhere for helping businesses around the world cope with the coronavirus lockdown.
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He said the global uncertainties surrounding the outbreak would hit the company’s future performance but stressed that he was confident in both the company’s and the business community’s ability to bounce back in the long term.
In its half-year results, the company announced revenue increasing 5.7% to £935m with operating profit of £213m, representing a margin of 22.8%.
The period has seen the acquisition of CakeHR, a cloud native solution that simplifies and automates HR tasks for small businesses, and the disposal of both Sage Pay and the company’s Brazilian business.
Mr Hare said: ““Sage has had a strong first half, sustaining last year’s growth momentum as we continue to focus on recurring revenue growth, and making good progress in strategic execution.
“Our key priority has been the health and wellbeing of our colleagues and our service to customers. I am proud of how colleagues have reacted, and how they have supported each other and our customers.
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“Despite the near-term uncertainties, I believe our continuing investment into Sage Business Cloud, together with our focus on customers, colleagues and innovation, form a strong base for the future performance of Sage.”
Sage said it saw around half the level of new customers it expected in April as coronavirus hit small firms. The group – which provides software to small businesses in the 海角视频 and worldwide – said it was now seeing the “broader effects of the sharp economic downturn caused by the pandemic, with some customers deferring purchase decisions, leading to a slowdown in new customer acquisition”.
It reiterated its warning that revenue growth for the full year will not meet previous expectations for 8% to 9%
But Mr Hare said Sage had not furloughed any of its staff and had no plans for any redundancies.
He added that the company’s planned move away from its current HQ at Newcastle Great Park to a new site at the Cobalt Business Park in North Tyneside remained on track, though it was likely to be slightly delayed by the outbreak.
Mr Hare added: “There’s a lot of uncertainty - it would be crazy to say anything else - and that will impact on our business in the second half of the year.
“But we think in the long term our customers are adaptable and entrepreneurial people and it will be the small and mid-sized businesses that will lead the recovery, with that help from the Government that has been very welcome.
“We’re very confident for the long term. What we’re seeing will only accelerate the move toward digitisation and use of the cloud but in the short term there is uncertainty and we’ll have to navigate our way through that.”