Financial highlights
- Organic revenue growth of 2% in the period (H1 2011: 5%), reflecting strong growth in subscription revenues of 5% offset by a contraction of 4% in software and software-related services revenue ("SSRS")
- EBITA margin maintained at 27% (H1 2011: 27%) with continuing investment in strategic initiatives for growth
- Underlying earnings per share increased by 2% to 9.55p (H1 2011: 9.35p*), reflecting 2% growth in underlying pre-tax profit
- Strong operating cash flow of £207.7m (H1 2011: £222.6m), representing 115% of EBITA†, with net cash of £122.1m at 31 March 2012 (31 March 2011: net debt of £106.0m; 30 September 2011: net debt of £24.9m)
- Interim dividend increased by 30% to 3.48p per share (H1 2011: 2.68p per share), reflecting the rebasing announced in November 2011 and continued confidence in our business prospects
- As at 4 May 2012, £147.8m returned to shareholders through the share buyback programme which will continue beyond the return of the Sage Healthcare proceeds
Operational highlights
- 129,000 new paying customers added in the period (H1 2011: 131,000)
- Subscription revenues continue to deliver good growth, reflecting progress in premium support and the ongoing strategic shift from software revenue to recurring support contracts
- 81% renewal rate on support contracts maintained reflecting high quality customer service and value-added features (H1 2011: 81%)
- Good progress in implementing our web strategy, including our alliance with Microsoft on the Windows Azure Cloud platform and the imminent launch of Sage One in North America
Guy Berruyer, Chief Executive, commented: "We have delivered a resilient performance in the first half of the year. The inherent strengths of the business are evident in our ability to attract new customers, our strong customer renewal rate and our continued high cash generation.
Revenue performance in the period reflects the strategic switch to subscription revenues, which has exceeded our expectations. It also reflects the challenging economic conditions, particularly in Europe, and we remain watchful of the broader business environment in this region. Nevertheless, we have delivered a resilient financial and operational performance.
We have made good progress on our priorities and will increasingly see their impact on the business. We have also renewed our focus on accelerating growth. This involves changing the way we will run our business, including a more disciplined approach to resource allocation, portfolio management and execution."
