Technology company Sage is targetting significant growth after its change strategy contributed to a fall in revenues.
The Newcastle firm, which recently moved to new headquarters on the Cobalt Business Park, has released results for the year ending September 30 in which its recurring revenue rose 5.4%.
Sage said its strategic investments led to “significant acceleration in new customer acquisition” but statutory revenues fell 3% to £1.85bn and operating profit went down 8% to £373m after a number of disposals of non-core businesses.
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The company also revealed that a recently announced programme to cut 800 jobs from the business would cost it £67m, but CEO Steve Hare said its growth was creating more jobs than those lost in that restructuring.
Mr Hare added that a change strategy that has been running for the last three years was essentially complete and the company was looking to grow its bottom line from next year. He said there were big opportunities for Sage to grow as businesses of all sizes digitised and looked to reduce time wasted on administration.
CEO Steve Hare said: “Sage delivered a strong performance in FY21. We achieved recurring revenue growth ahead of our initial expectations and ended the year with real momentum, supported by our strategic investment in sales, marketing and innovation.
“Our cloud native solutions have performed particularly well, as more new customers choose Sage to take care of their accounting, people and payroll processes - removing friction, delivering business insights, and giving them a competitive edge. I would like to thank our colleagues and partners, whose hard work and commitment has helped deliver a successful year.
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“Having reshaped and invested significantly in the group over the last three years, we are now focused on growing the business in absolute terms, both organically and through acquisitions.
“The small and mid-sized businesses that power the global economy are adopting digital solutions at a faster rate than ever before, and through our trusted technology and human approach, Sage is well positioned to support them. I am confident that, through our refreshed strategic framework, we will deliver further sustainable growth, driving the success of Sage now and in the long term.”
Sage’s strategy of simplifying its business have seen it complete the disposals of businesses in Poland, Asia and Australia and agree the disposal of its Swiss operations to concentrate on larger markets.
It has also made a number of investments and acquisitions of small technology companies it believes will add to its services. Mr Hare said more acquisitions were likely in the future.
The company said it expected to achieve organic recurring revenue growth of 8-9% in the current financial year, driven mostly by cloud native revenues.
Sage said it ended the year with a robust balance sheet made up of £567m of cash and cash equivalents, plus £669m of undrawn facilities. It announced a final dividend of 11.63p.
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