Sage share price soars 10%, announces £350M buyback

Shares in Sage Group (LSE: SGE) rallied 10% on Wednesday after the enterprise software maker reported double-digit annual growth and announced a £350 million share buyback programme despite wider economic uncertainty.

The FTSE 100 firm said total revenue for the 12 months to 30 September climbed 12% to £2.18 billion while annualised recurring revenue, a key metric, increased 11% to £2.19 billion. Growth was achieved across its cloud software portfolio as small and medium-sized firms continued investing in digitalisation.

However, pre-tax profit dropped 16% to £282 million as operating margins shrank and finance costs rose 41%. Diluted earnings per share also slid 21% to 20.43p. Sage proposed a 5% rise in its full-year dividend to 19.3p.

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The company enters the new financial year “with good momentum” and expects organic revenue growth to be broadly in line with the prior year. Its focus on efficiently scaling the business should see operating margins improve.

Sage shares have added an impressive 47% year-to-date, albeit they remain slightly lower year over year.