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December 2, 2015

Sage profits drop as software subscriptions surge

News: Company hits financial targets set three years ago.

By Charlotte Henry

Sage has announced a small decline in profits, despite an increase in revenue for the year ending September 30th.

The firm saw revenue rise 6.1% to £1.44bn, from £1.35bn the year before, but operating profit declined 0.8% to £297m, from £300m.

It’s organic operating margin on a revised based was up to 27.1%, from 26.5%, while organic operating profit on a revised basis hit £380m, up from £350m.

CEO Stephen Kelly said: "We are pleased to have met the financial targets set three years ago. We have already begun the transformation outlined at the Capital Markets Day in June 2015 and highlight today clear signs of early progress."

The firm is currently looking to provide more products in the cloud. Kelly said that "Transformation is rarely linear and it is clear we have much to do as we manage the operational risks."

Sage demonstrated this transformation further, announcing that its Sage One cloud product, which allows accounting and payroll to be accessed via mobile apps, has hit 100,000 customers.

Kelly said: "Sage One is fast becoming the accounting product of choice for small businesses, with UK subscribers growing at 4,600 per month and many turning to Sage One for its simplicity and our 24/7 customer support."

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The product expanded into Brazil, Malaysia and Australia this year.

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