Group Press Releases

The Sage Group plc (”Sage”), one of the leading global suppliers of business management software and services for small and medium-sized enterprises (”SMEs”), announces its unaudited results for the half-year ended 31 March 2009.

Financial overview

• Statutory revenues increased by 17% to £748.4m (H1 2008: £640.4m), enhanced by favourable currency movements

- On a currency neutral basis, revenues contracted 3%* (H1 2008: growth of 9%*)

• EBITA† margin increased to 24% excluding restructuring charges; EBITA† margin maintained at 23% including restructuring charges (H1 2008: 23%*)
• Statutory pre-tax profit of £139.2m (H1 2008: £122.6m), an increase of 14%

- On a currency neutral basis, adjusted pre-tax profit^ contracted 3% to £159.3m (H1 2008: £164.1m) and excluding restructuring costs increased 3% to £169.4m

• Operating cash flow of £187.0m (H1 2008: £187.4m), representing 111% of EBITA†
• Strong balance sheet with a ratio of net debt to EBITDA† of 1.6x; interest cover of 13.2x with committed debt facilities of £830m to 2011
• Interim dividend raised 3% to 2.50p per share (H1 2008: 2.43p per share), reflecting reliable cash flows and the strength of our business model

Operational overview

• Strong control of our cost base with annualised savings of £49.3m (equating to 4% of the full year 2008 cost base) with associated restructuring charges of £10.1m in the first half of the year; and an additional £13.0m cost incurred since 31 March 2009 to date
• 4%* organic revenue contraction (H1 2008: 5%* organic revenue growth), reflecting a contraction of 15%* in organic software and software-related services revenues, offset by good organic subscription revenue growth
• Organic subscription± revenue growth of 7%* in the UK and Mainland Europe; 14%* growth in Rest of World, contraction of 3%* in North America, giving 2%* growth for the Group
• Renewal rates of support contracts maintained at 81% with continued strength in premium support and overall revenue growth in many of our product lines
• Average of 40,000 customer support calls taken per day

Chief Executive Paul Walker commented: “Our businesses have delivered a resilient first half performance in challenging economic conditions as customers continued to rely on Sage as a trusted partner in running their businesses more efficiently in difficult markets. After a robust performance last year, we are now experiencing the effects of the weakening global economy in most of our markets, with customers delaying software purchasing decisions. However, demand for high-quality customer support remains strong. We are proactively managing our business for these demanding market conditions and, in the current financial year to date#, we have successfully eliminated annualised costs of £49.3m, representing 4% of the full year 2008 cost base.

“We anticipate that current market conditions will continue throughout the remainder of this financial year. However, we are confident that our market-leading portfolio of products and services, high-quality customer support, well established distribution channels and loyal, geographically diverse customer base mean we are well positioned to benefit when markets recover.”

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Enquiries

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

Paul Walker, Chief Executive

Paul Harrison, Group Finance Director

Cynthia Alers, Investor Relations Director

Tulchan Communications +44 (0) 20 7353 4200

Susanna Voyle

Stephen Malthouse

Lucy Legh

An analyst presentation will be held at 8.30am today at Deutsche Bank, Winchester House, 1 Great Winchester Street, London EC2N 2DB. A live webcast of the presentation will be hosted on www.investors.sage.com , dial-in number +44 (0) 1452 568 051, pin code: 97644096. A replay of the call will also be available for two weeks after the event: Tel: +44 (0) 1452 550 000, pin code 97644096#.