The Sage Group Plc has reported sound pre-tax profits of UKP3.02m on turnover of UKP7.8m for the half-year to March 31, increases of 29% and 17% respectively. The Newcastle company attributes its growth to the underlying strengths and the importance of recurring revenues from software maintenance, stationery and consumables, up by 28% and representing a third of sales. Software sales were less buoyant, but still 44% of revenue, while network product sales improved by 90%, representing just over a fifth of turnover. Also, exports increased significantly and now constitute 14% of revenue. Sage says that the market for packaged accounting software has gone through a difficult period, but it claims to have increased its share by volume, and is satisfied with sales of the Sovereign range, launched last autumn. The personal computer-based MainLan networking line has experienced strong growth, boosted by new products in the last quarter of 1990, and the company is planning a number of launches in the second half of this year. US Sage Inc saw sales increase by 106%, but the parent company says that pressure on margins caused by a weak dollar and competitive pricing led to a loss. If current sales are maintained, the subsidiary should be profitable in the second half. Sage Group is acquiring DacEasy Inc, a US supplier of accountancy software on somewhat demanding terms (CI No 1,641), and that expected to be completed by May 7. It is being financed by UKP3.5m from cash resources and the proceeds of a one for five rights issue at 200 pence. Cash balances at March 31 stood at UKP4.6m after progress payments of UKP2.7m on new premises, and Sage is expecting to remain cash-positive after the DacEasy acquisition.
