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21 Jan 2021 | 07:02

Sage trades in line as recurring revenue grows

(Sharecast News) - Sage said it traded in line with expectations in the first quarter as the business software group's recurring revenue grew strongly. Total revenue rose 1.4% to £447m in the three months to the end of December from a year earlier as recurring revenue increased 4.7% to £408m.

Other revenue fell 24% to £39m as Sage as Sage shifted away from licence sales towards subscriptions. Revenue from subscriptions increased to 68% compared with 65% for all of the previous year.

Recurring revenue rose 6.4% to £160m in North America and in Northern Europe recurring revenue rose 3.3% to £96m. Cloud native revenue rose 26.7% to £63m.

The FTSE 100 group said it was increasing investment in products, sales and marketing to build recurring revenue with a focus on the cloud. Sage said it may "flex" investment during the year according to trading conditions.

Sage Chief Financial Officer Jonathan Howell said: "We have continued to deliver against our strategy in the first quarter, growing recurring revenue in line with our plan for the year, supported by good demand for Sage Business Cloud solutions. Accordingly, we reiterate our guidance for the full year, as set out in our FY20 results announcement."

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