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The Sage Group has seen its operating profits and revenue drop for the first half of the year, but the company expect organic recurring revenue growth to be strong for the financial year, driven by growth in its cloud business.
For the six months ending 31 March, the company reported an operating profit of £203m, down 30% from the first half of 2020. Revenues and operating profit margins are also down.
However, growth in recurring revenue reflects the firms migration of customers to Sage Business Cloud, supported by strong customer retention.
Cloud-native annualised recurring revenue increased by 36% to £286m, underpinned by growth from new customers and supported by migrations from cloud-connected and desktop products.
The firms balance sheet reports £1.4bn of cash and available liquidity, comprising £718m of cash and cash equivalents, and £656m of undrawn facilities, and net debt to EBITDA of 0.2x.
The interim dividend is up 2% to 6.05p