Sage FY23 results: 10 per cent revenue growth and a £350m share buyback announced

The business software provider announced double-digit revenue growth, increased profitability, and strong cash generation

Sage has posted underlying total revenue growth of 10 per cent to £2.18bn, reflecting a 12 per cent increase in recurring revenue to £2.10bn.

Operating profit rose by 18 per cent to £456m, while operating margin expanded by 140 basis points to 20.9 per cent.

The software vendor also reported cash conversion of 116 per cent of underlying operating profit.

From a regional perspective, total revenue in the UK & Ireland region climbed by 9 per cent to £627m, quoting greater demand for cloud-based products as a driver.

Meanwhile, Europe posted a 5 per cent total revenue increase to £584m.

North America led the growth with a 15 per cent rise in total revenue to £973m. Sage Intacct, the company's cloud solution for medium-sized businesses, saw revenue jump by 30 per cent.

In addition to the strong financial results, Sage announced a share buyback programme of up to £350m, reflecting the board's confidence in Sage's growth prospects and balance sheet.

The company also announced a 5 per cent increase in its full-year dividend to 19.3p per share.

"Sage performed well in FY23, delivering double-digit revenue growth, increased profitability and strong cash flows," said CEO Steve Hare.

"We sustained good momentum throughout the year in all regions, driven by consistent strategic execution."

Hare added that small and medium-sized businesses continue to invest in digitalisation despite the uncertain economy.

Looking ahead, Sage expects its total organic revenue growth in fiscal 2024 to remain broadly in line with the 10 per cent achieved this year.

Operating margins are also forecast to trend upwards.

Sage is focused on strategic priorities like scaling its solutions for medium-sized businesses, expanding beyond core financials into other functional areas, building its small business portfolio, increasing usage of its Sage Network platform, and advancing AI-powered innovation.

Execution across these areas underpinned the company's growth in fiscal 2023.