Sage Group Plc, the financial accounting and payroll software specialist, is continuing to thrive in a niche market which it understands better than anyone, that of the small to medium sized business. The group saw its net profits for the year to September rise by 27% to 25m pounds while revenues climbed 12% to 153m pounds. Newcastle-based Sage is now a highly European concern with 46% of revenues from France and Germany as well as 13% from the US. The down side of which is an 11.2m pounds dent in revenue and a 2m pound profit reduction from currency translation effects. Sage borrowed 40m pounds in the period to purchase German PC accounting software house KHK Software AG, contributions from which more than covered the cost of borrowing, the company said. While Sage is famous for sticking to the knitting, the firm spent a third of a million pounds on canvassing its customer’s opinions this year, and the results convinced it to begin extending its software offerings. Sage has plans to add new modules covering areas like human resources, time and billing and electronic commerce. Initially these will be a natural progression from the current payroll modules, and many of Sage’s 60,000 UK-based payroll users are clamoring for extensions. The software will still be targeted at companies with 100 employees of less, ensuring that it steers well clear of the heavyweight ERP vendors like SAP AG and Baan Co NV et al. Sage wants to begin adding e-commerce features like on-line supplier payments and stock ordering systems, but the major stumbling block is the UK clearing banks who have so far refused to reach an agreed standard for internet-based transactions. As regards EMU, Sage says all its software sold in France and Germany in early 1998 will be compliant, although it estimates that only 25% of its customer base is paying any attention at all to the year 2000 problem. Also in the period, founding chairman of Sage, David Goldman, resigned. Taking over in the executive chairman’s role is Michael Jackson, a non-executive director who has been with the company since 1983. The board has proposed a final dividend of 1.93 pence, taking the total for the year to 2.9 pence, a rise of 10%.