Sage to hunt for new acquisitions

Small and medium-sized companies are increasing their investment in new business software systems according to Sage, which reported a 23 per cent rise in turnover yesterday.

Small and medium-sized companies are increasing their investment in new business software systems according to Sage, which reported a 23 per cent rise in turnover yesterday.

Sage, the only software group in the FTSE 100, sells accounting and business management software to small and medium-sized companies and yesterday it reported turnover of £332.5m and pre-tax profits up 17 per cent to £86.7m.

Paul Walker, the group's chief executive, said: "These are the strongest results we've had in the past few years. We are seeing a better market overall."

The company said the outlook for the second half of the year was still positive and that it would be looking for more acquisitions having completed deals in Europe and the US.

Acquisitions have driven some of Sage's sales increase in the six months to 31 March, but Mr Walker also reported growing like-for-like sales that strip out the impact of recently acquired businesses. He said organic growth was 3 per cent overall, rising from £268m to £276m.

The UK witnessed a 7 per cent increase in revenues. "The UK would appear to be a stronger market than Europe," Mr Walker said, adding that while spending levels were still a long way from the levels of the 1990s, small and medium-sized companies had shrugged off a reluctance to invest.

Sage raised its dividend 10 per cent and reported that its total customer base reached 4.3 million in the first half of the year. It said that 27 per cent of software revenues would be ploughed back into product development.