Shares in software company Sage Group (LON:SGE) fell 15 percent on Friday morning, after first half revenue growth missed expectations for the six months to March.
The group downgraded its annual guidance on the back of the results, with ‘inconsistent operational execution’ leading to a revenue rise of 6.3 percent over the period, instead of the 7.4 percent growth recorded a year earlier.
The group attributed the fall to lower recurring revenue growth, as well as the loss of several contracts in its Sage’s enterprise software division.
Full-year guidance was cut to around 7 percent organic revenue growth, down from 8 percent, but operating margin guidance was maintained at 27.5 percent.
The software group were hit by weaker software subscriptions in the first half, with growth in the area falling to 25.3 percent, from 30.6 percent.
Chief executive Stephen Kelly said the group’s broad market opportunity remained unchanged.
“The revised revenue guidance targets for financial year 2018 reflect both the performance in the first half, but also our diligence in ensuring that we focus on recurring revenue to drive sustainable acceleration throughout the rest of the year as a platform into financial year 2019,” he commented.
Despite the group’s conciliatory comments investors were spooked by the news, sending shares down 15.09 percent to 570.60 (0821GMT).
