Sage Group Plc, the Newcastle, UK accounting software company, has proved the leading UK equity of the 1990s with an increase in value of more than 28,000% over the decade, according to an analysis by Primark Corp, the Waltham, Massachusetts information services company.
The company’s achievement is even more remarkable for the fact that for the first seven years of the decade it was shunned by investors while it built market share in the UK and laid the basis for its expansion in Europe. It was only in 1998 that market professionals caught on that the company’s vigorous growth in revenue and income was worth following that the shares began to take off.
Sage’s success is based on the fact that an accounting package aimed at SMEs is likely to the first application to find itself on the server of millions of businesses. It was a market so large that it is remarkable that one of the big players did not try to make it their own. But Sage faced little serious threat as it expanded in Europe and the US and the shares are still powering away on the prospects for increased sales as it e-enables its customers.
The reluctance of customers to switch from an application central to the operation of their businesses should ensure continued growth for Sage despite growing competition, not least from Australian operation Solution 6 Holdings Ltd, which is attempting to buy its UK rival Pegasus Group Plc (CI No 3,816).
Sage has finally achieved stock market respectability. And for those looking for a company to benefit from the explosive growth of internet applications, Sage is better placed than many of the companies whose recent IPOs have been greeted with hysterical reactions. While Sage tops the rise in value of FTSE100 companies – the UK’s largest quoted companies – it is followed by four services companies Logica, Hays, Misys and Sema Group.
