Sage hits ten-year growth high
Accounting software vendor said it enlisted 215 ISV partners in its fiscal 2016 as subscription revenues soar
More than 200 ISVs have signed up to Sage Marketplace in its inaugural year, Sage said as it posted strong annual numbers.
The accounting software giant this morning announced it had achieved its fastest rate of recurring revenue growth for a decade in its financial year ending 30 September 2016, sparking a spike in its shares.
Total revenues rose 9.3 per cent to £1.57bn, with organic growth standing at 6.1 per cent. The UK and Ireland more than pulled their weight, with seven per cent organic growth.
Recurring revenue growth hit 10.4 per cent. Organic operating profit, meanwhile, rose 9.2 per cent to £427m.
In its results statement, Sage flagged up the momentum of Sage Marketplace, a distribution platform that allows ISVs to showcase add-ons for its products, including Sage One and Sage Live, which it launched in February.
Some 215 ISV apps have signed to Sage Marketplace during the year, Sage said, of which 86 have been fully integrated.
Sage Live, a cloud accounting solution built on the Salesforce platform that was launched in the USA and UK in February, now has 600 customers, with over 400 added in the past 90 days, Sage boasted.
Pegg, which Sage bills as "the world's first accounting chatbot", has amassed 9,000 users for Sage in 125 countries since its launch in July, the LSE-listed vendor added.
Phase one of a transformation programme saw Sage cut general and administrative expenses as a proportion of revenue from 18.7 to 16.5 per cent year on year and renew its senior management team, and is now complete, the vendor said.
Of its top leadership, 72 per cent has changed in the last two and a half years and half the new leaders are internal promotions, Sage said. Nearly a third (32 per cent) of the senior management team is now female, up from 25 per cent in the previous year.
Sage CEO Stephen Kelly (pictured) said: "FY16 saw Sage continue to deliver on the commitment made at our June 2015 Capital Markets Day to perform and transform. The organic revenue growth of six per cent is driven by higher-quality recurring revenue, which grew at the fastest rate in a decade. The strategy is working - with customers embracing closer relationships with Sage, evidenced by a 46 per cent increase in the number of subscription contracts and a contract retention rate of 86 per cent.
Phase two of the transformation effort will focus on "driving more technology innovation and increasing focus on new customer acquisition", Kelly added.