Sage puts on a surge as IT spending resumes

BUSINESSES turning the taps on again for IT spending helped accountancy software group Sage increase full-year profits 14 per cent, as its new chief executive placed America at the heart of his strategy yesterday.

In the first set of results under Guy Berruyer, who took over from long-standing chief executive Paul Walker in October, Sage reported a pre-tax profit of 355.7 million. Revenues were flat at 1.44 billion.

Berruyer said the economic outlook for the firm's six-million-strong customer base remained uncertain, but there were signs of improving markets. He added: "My focus is on improving organic revenue growth, particularly in North America, in driving our web strategy, and in growing our (profit] margin in the medium term while continuing to invest in higher growth initiatives such as payment processing."

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Shares in Sage, which competes with Intuit and Microsoft, closed up 5 per cent, or 13.7p, at 271p. They have outperformed the European technology sector by 15 percentage points since the start of 2010.

The group said: "In the same way that SMEs entered the recession later than larger businesses, they have lagged larger businesses in seeing confidence return to their markets. We are seeing signs of more optimism from SMEs, although this has to be balanced with a lack of visibility over the economic recovery."

Operating profits for Sage's UK division grew 6 per cent to 88.9m in year to end-September.