Sage Group Plc has enjoyed a strong first year as a fully listed company, turning in pre-tax profits up 63% at UKP5m on turnover that rose 44% to UKP13m. David Goldman, chairman of the Newcastle-based accountancy software and networking products supplier, is particularly pleased that the year’s growth has been 100% organic. He attributes Sage’s […]
Sage Group Plc has enjoyed a strong first year as a fully listed company, turning in pre-tax profits up 63% at UKP5m on turnover that rose 44% to UKP13m. David Goldman, chairman of the Newcastle-based accountancy software and networking products supplier, is particularly pleased that the year’s growth has been 100% organic. He attributes Sage’s success to a strong investment in marketing (UKP1.8m) and the fact that the group can rely on strong recurring business from its non-software post-sale products – computer stationery, software maintenance and customer training sales rose 77% over the year and contributed 31% of group turnover, compared with 25% last year. Accounting software sales rose 47% to UKP7.3m and Sage is claiming to have increased its market share in its core area of packaged accounting software to 40% at the expense of its only perceived rival, Pegasus, which is now estimated to hold 13% of the market. The re-branding of Sky software products as Sage Sovereign in September (CI No 1,506) is reported to have successfully increased sales over the last two months. In the networking sector, MainLan sales were flat at UKP2m, but Goldman has high hopes for the future of this area following the launch of Sage’s Ethernet products in September (CI No 1,506) – MainLan sales are reported to have doubled over the last two months since their release. Sage’s previous MainLan cards were based on the group’s own proprietary standard – a move which at the time seemed extremely risky, whereas the new cards – still made with chips designed by Sage and so less expensive through having less components – are made to industry standard and are approved by Novell Inc. The new UK business unit being set up to market the new MainLan products is expected to be up and running within the next few months. US Sage Inc, the group’s Longwood, Florida-based networking subsidiary incurred a UKP81,000 loss this year on sales of UKP711,000, but is expected to return to profitability over fiscal 1991 with the US introduction of the new MainLan products. MainLan is aimed at small networks of two to 30 computers – for example, accountancy practices using one terminal for invoicing and one for cheque receipts. Says the chairman, Sage has found this a relatively unrivaled niche in the US – the only other product being LANtastic from an unquoted company called Artisoft Inc. Sage is reporting a healthy balance sheet with UKP4.2m in net assets, but Goldman says that there are no plans for acquisitions – he’d rather keep the cash in the bank given the present economic climate. The total net dividend for the year will be 7.0 pence – an increase of 20%.