Sage on course to increase profit

Accountancy software vendor will meet financial expectations

Accountancy software vendor Sage has boosted confidence in the IT market after revealing it will meet financial expectations.

The company expects to post a profit of between £133m and £139m for its financial year ended 30 September, up from £121m last year. This is in line with analysts' predictions of £136.2m.

"This performance in challenging market conditions was encouraging," said a representative of the firm.

The company did not release further details regarding its financial position, but more information will be provided in Sage's preliminary results, which will be revealed on 3 December.

Duncan Wyeth, director at reseller Serion Logic, a Sage Line 100 Solutions Centre, said accountancy software is always in demand, regardless of economic conditions. "It seems that the worse the economy the more demand for the software," he said.

Sage has more than 450,000 customers in the UK and has been working on the management of its 2,500 UK resellers.

"One of the reasons Sage is doing quite well is because it has started to focus on the way it manages its reseller channel," said Wyeth. "It has started to make an effort to get those resellers that already sell its products to sell more."

VARs have benefited from Sage's recent deals to make upgrades more attractive, he added.

Sage claims it is also increasing its share of the customer relationship management (CRM) market, following its acquisition of CRM vendor Interact last year. Mike Lawrence, managing director of Sage reseller Bentpenny, said he is getting a lot of interest in Sage's CRM offering, but sales are yet to take off because of the weak economy. "People are waiting to see what Gordon Brown will do," he said.

Separately, Serion Logic has expanded after achieving third place in Sage's reseller league. "We are a small company," said Wyeth. "After coming third I thought we should open another branch." The new branch is now open in Maidenhead.