Software and solutions company Sage topped the FTSE 100 in early trade on Wednesday after announcing surging revenues and wider adoption of their services.
Sage shares were 7% higher at the time of writing.
Sage saw strong growth in recurring revenue, up 12% to £2.1 billion, driven by 25% growth in Sage Business Cloud to £1.6 billion. Total underlying revenue increased 10% to £2.2 billion. The company said they saw similar levels of revenue growth over the next year.
Underlying operating profit rose 18% to £456 million, with operating margin up 140 basis points to 20.9%, thanks to operating efficiencies. EBITDA also grew strongly, up 16% to £553 million, with EBITDA margin up 120 bps to 25.3%.
However, statutory operating profit declined 14% to £315 million. This reflects one-off gains on business disposals last year, as well as restructuring charges and M&A costs this year.
Underlying basic earnings per share was up 22% to 32.3 pence, demonstrating strong bottom-line growth.
“Sage performed well in FY23, delivering double-digit revenue growth, increased profitability and strong cash flows. We sustained good momentum throughout the year in all regions, driven by consistent strategic execution,” said Steve Hare, Chief Executive Officer.
“We continue to help small and mid-sized businesses succeed, providing them with the tools and expertise they need to simplify their accounting and HR processes, streamline their operations, and make more informed business decisions. Through the Sage Network, we are delivering innovative, AI-powered services to customers, faster and more efficiently than ever before.
“Small and mid-sized businesses are continuing to digitalise, despite the macroeconomic uncertainty. We are building a resilient platform to deliver sustained, efficient growth, and I am confident that Sage is well positioned to take advantage of the market opportunity in 2024 and beyond.”