Group Press Releases

The Sage Group plc audited results for the year ended 30 September 2011

STRONG FOUNDATIONS FOR FUTURE GROWTH

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Highlights

• Organic revenue# growth of 4%* in the year (2010: 1%*), with 3%* growth in software and software-related service revenues (2010: 3%* contraction) and 5%* growth in subscription revenues (2010: 3%* growth)
• EBITA† margin increased to 27.4% (2010: 26.4%*) at the same time as investing for growth
• Underlying earnings per share increased by 16%* to 20.81p (2010: 17.88p*), reflecting 8%* growth in pre-tax profit, and favourable tax settlements in the year
• Strong operating cash flow of £405.1m (2010: £394.5m), representing 111% of EBITA†, with net debt reducing to £24.9m at 30 September 2011 (30 September 2010: £219.8m)
• Rebasing of dividend with 25% increase in total dividend for the year to 9.75p per share (2010: 7.80p per share). This results in a proposed final dividend of 7.07p per share (2010: 5.22p per share)
• Share buyback programme of £200m continues, following the sale of Sage Healthcare
• Innovation driving new product releases, including online business solutions and connected services. Significant launches in the year (e.g. Sage One) with strong pipeline of new releases planned for 2012
• 261,000 new paying customers added in the year (2010: 252,000), and our high quality customer service maintained subscription contract renewal rates at 81%

Guy Berruyer, Chief Executive, commented: “These good results reflect the strong fundamentals of Sage’s business including our leading market positions, a large and loyal customer base, a culture of innovation and robust financial position. In the past year we have continued to build on these foundations to deliver higher revenue and profit growth in the future. With our strong cash flows, confidence in our business and our focus on shareholder returns, we are evolving our approach to the use of capital, and as part of the process, the Board has rebased the dividend, resulting in a proposed 25% increase for 2011.

As we look forward, there are clearly significant macro-economic concerns which may impact SMEs, particularly in the eurozone, and our customers are telling us through our Sage Business Index that they see the outlook remaining uncertain. However, the strengths of our business position us well to deal with the ups and downs of the economic cycle. Given the current economic uncertainty, we will continue to manage the business prudently, whilst pursuing the significant longer term opportunities we have in our markets”.

Enquiries:

The Sage Group plc +44 (0) 191 294 3068

Guy Berruyer, Chief Executive
Paul Harrison, Chief Financial Officer
Andrew Griffith, Investor Relations
Murdo Montgomery, Investor Relations

Tulchan Communications +44 (0) 20 7353 4200

David Shriver
Lucy Legh