Group Press Releases

The Sage Group plc (”Sage”), a leading supplier of business management software solutions for small-and-medium sized enterprises (”SMEs”), announces its unaudited results for the year ended 30 September 2007.

Financial highlights

• Revenues increased by 30%* to £1,157.6m (2006: £892.4m*)
• EBITA† increased by 20%* to £283.2m (2006: £235.9m*)
• Adjusted pre-tax profit^ rose by 14% to £251.3m (2006: £221.3m)
• Adjusted earnings per share^ increased by 13% to 13.34p (2006: 11.83p)
• Operating cash flow of £317.1m (2006: £267.1m) representing 112% of EBITA (2006: 107%)
• Dividend rebased resulting in a 95% increase in the proposed total dividend to 7.00p (2006: 3.59p)

Operational and strategic highlights

• Total licence revenue growth of 12%*, total growth in services revenue of 39%*
• Organic revenue growth of 7%* for the year, resulting from strong growth in three of our four geographic regions
• Total revenue for North America increased 54%*, EBITA† increased by 28%*, organic revenue growth 4%*
• Customer base expanded to 5.5m businesses (2006: 5.2m)
• Five principal acquisitions completed in the year for a total consideration of £73.1m

^Pre-tax profit and earnings per share figures stated prior to amortisation of intangible fixed assets, prior year gain on disposal of £2.7m and neutralisation of foreign exchange movements. A table reconciling adjusted pre-tax profit to statutory profit before taxation is shown in Note 3 on page 14.

*Foreign currency results for the year ended 30 September 2006 have been retranslated based on the average exchange rates for the year ended 30 September 2007 of $1.98/£1 and €1.48/£1 to facilitate the comparison of results.

†Earnings before interest, tax, amortisation of intangible fixed assets (EBITA) and prior year gain on disposal in North America of £2.7m.

Chief Executive, Paul Walker, commented:
“Sage has had a successful year, once again delivering double digit revenue and profit growth and substantial cash generation. We have continued to see strong organic revenue growth whilst expanding our product and services portfolio through strategic acquisitions.

“We are confident that our consistently strong cash flows and recurring revenue streams provide a solid foundation for future growth through both organic and acquisition-led investment. In light of our on-going financial and commercial strength and our commitment to creating shareholder value, we are rebasing our dividend and are, as a result, significantly increasing our dividend for the full year. It is our intention to follow a progressive dividend policy.

“We see many opportunities arising from the changing needs of our core SME customer base which this year reached 5.5 million. Developments in technology, a greater demand for customised solutions and the increasing use of value-added products and services all provide a rich source of long term growth from which we are well-placed to benefit.

“Going into 2008 we anticipate further good performances in the UK, Mainland Europe and Rest of World. As we step up investment in our North American business to accelerate our sustainable organic growth over the medium term, we expect an impact on margins in 2008. However, in this financial year, we expect to see the early benefits of the actions taken within this region with a modest improvement in organic growth.

“The new year has started well, with all regions performing in line with our expectations. Whilst we recognise the current uncertainties in the macro-economic situation, the defensive characteristics of our business model lead us to view 2008 with confidence.”

A presentation for analysts will be held at 8.30am today at Deutsche Bank, Winchester House, 1 Great Winchester Street, London EC2N 2DB. The presentation will be webcast on www.sage.com. A live audio broadcast of the presentation and subsequent Q&A will also be available for analysts on the dial-in conference number +44 (0)1452 555 566, conference ID 24262695.

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Enquiries:

The Sage Group plc
Paul Walker, Chief Executive
Paul Harrison, Group Finance Director
Cynthia Alers, Investor Relations Director
+44 (0)191 294 3068

Tulchan Communications
Andrew Grant
Stephen Malthouse
+44 (0)20 7353 4200