Sage Share Discussion Threads

[maddox] 18/2/2009 12:21

Hi Lyntwyn,

IC have written a typically half glass full analysis. Yes, Sage is operating in mature markets; yes, their customers are being hit; yes, the US healthcare market was a mistake. They have also discounted the strategic context.

But the core business is sound, an accountancy application is a necessity not a luxury, and once purchased it is difficult and more costly to switch. The support package is not a significant cost item and they are still experiencing growth in some markets

Moreover, the current market climate is favourable for further acquisitions in growth markets. This was and still is the path to continued growth and Sage to date has been extremely adept at acquiring and integrating new firms. Not so long ago the scribblers were warning that Sage would have to over-pay for acquisitions.

Nevertheless, I expect the pessimists will win in the short-term.

[lyntwyn] 07/2/2009 10:41

06.02.09: +0.1, (178.4) IC says Sell (176p): BEAR POINTS Too many customers vulnerable - Premium support could face pressure - US healthcare business remains a problem - Shares highly rated relative to peers BULL POINTS Benefit from weakening sterling - European business trading well.

[surrey dodger] 04/2/2009 18:14

Taken a dip in at 177p(inc fees/stamp). Not sure there's much upside but seems to be bouncing around 175-185 at the moment. Hoping to see 181p plus over the next few days for small'n'quick return.

[lyntwyn] 04/2/2009 08:06

Wednesday 4 February 2009
The Sage Group plc Interim Management Statement

The Sage Group plc ("Sage"), a leading global supplier of business management software solutions for small and medium-sized enterprises ("SMEs"), is releasing its interim management statement on its unaudited results for the three months to 31 December 2008.
Trading for the period was consistent with management expectations at the time of the 2008 preliminary results announcement on 3 December 2008. Continued strength in subscription revenues has offset the impact of a subdued market for software and software-related services.
Our UK business showed a resilient performance in volatile market conditions. After a very strong performance last year and in weakening economic conditions, revenue growth in Mainland Europe slowed as anticipated. North America is operating in particularly challenging market conditions, which affected performance in all divisions. Rest of World experienced good revenue growth in slowing market conditions.
The weakening of sterling had the effect of enhancing the Group's results for the period. Cash generation remained strong, and the Group continues to pay down gross debt. However, the impact of currency translation increased reported net debt to £649m as at 31 December 2008 (30 September 2008: £541m). The Group remains comfortably within its banking covenants with committed financing facilities in place until 2011.
Paul Walker, Chief Executive, commented: "We are pleased to report that, despite volatile conditions in many of our markets, overall trading remained in line with our expectations at the time of our preliminary results in December 2008. Subscription revenues continue to show good growth, offsetting the anticipated contraction in software and software-related services. We continue to manage our cost base to protect profitability. We believe that these results demonstrate the continuing resilience of our business model. However, it is still early in our financial year, and we remain alert to the challenging economic environment."

[lyntwyn] 03/2/2009 11:44

I know its a good company but I had hoped to buy this back nearer 100p, but its got too much stamina by the looks of it. Its sailing thru' this bear market

[volsung] 06/1/2009 14:37

In for a nice wee punt at 181p. Seems to have a bit of mileage in it.

[jazza] 03/12/2008 08:34

Never thought these would be yielding near 5%...am gonna have to take a closer look...

[rockraven] 08/11/2008 14:05

Off topic but featuring SGE -

advfn's unavoidable popup ads have featured again this past week. Anyone tempted? Involves listing ten well known FTSE-100 stocks - including Sage - in order of how you think they will perform the next trading day. Cash prizes for best guesses.

SGE
HSBA
BP.
WTB
VOD
SBRY
TSCO
MKS
RR.
BT.A

[lyntwyn] 16/10/2008 10:20

looks like unloved SGE at the moment. as the stock market cycle continues SGE will become a super buy once again as it nears the 100p mark. will hold back awhile but time to start watching methinks.

14.10.08 :-14.2, (172.8) Deutsche Bank cuts price target to 245p from 260p; rating buy

[explorer88] 19/8/2008 11:27

I was fortunate enough to invest in Sage in 1993 when the company had a market cap. of around £50m, eventually selling seven years later when the m/c exceeded £5 billion.

So, in the next seven years, where will the next "Sage" come from?

China's software/IT industry seems like a good place to look.

The following companies have market caps of around £15m and have, i believe, the potential to exhibit the same levels of growth (organic and through acquisition) as Sage achieved between 1993 - 2000...

GEONG (GNG)

SINOSOFT (SFT)

CHINA EASTSEA (CESG)

I hold all three.

[lyntwyn] 04/8/2008 09:31

Agreed. In fact their trading update out today.-seems ok per usual,although I suspect that the usual city culprits will play on the "satisfactory performance" in US! share price responding favourably from kick off. -

Results for the 9-month period were consistent with management expectations. We therefore expect to report results for the full year to 30 September 2008 in
line with expectations.

Regional Review
Our UK business reported a solid performance despite the uncertain market
conditions. North America, excluding Sage Healthcare Division, reported a
satisfactory performance in challenging market conditions. Sage Healthcare
Division focused on driving operational improvements to meet medium-term objectives in margin and revenue improvement. In more benign economic conditions, our businesses in Mainland Europe continued to perform strongly. As forecast at our half year results, growth in Spain moderated slightly, whilst growth in Germany/Switzerland improved. France continued to perform well. Rest of World again recorded strong organic growth.

Financial position
Cash flow remained strong over the period, and, at 30 June 2008, net debt stood
at £532m (31 March 2008: £556m).

Acquisitions
There were no new acquisitions since those of KCS and Tekton Group announced
earlier in the year in the UK.

Summary
Commenting on Sage's performance over the period, Paul Walker, Chief Executive,
said: 'Our businesses continue to show resilience in uncertain and challenging
markets. We remain cautious on the economic outlook although our large customer
base,geographic diversity and strong product offering provide good support for ourbusinesses going forward.'

Sage will report preliminary results for the 12 months to 30 September 2008 on 3 December 2008.

[maddox] 01/8/2008 12:25

Hi Lyntwyn,

Sage willjust have to pick up a few more bargain acquisitions in the faster developing BRICs to keep its momentum - no change in strategy required.

Regards, Maddox

[lyntwyn] 29/7/2008 15:03

28.07.08 :-3.2, (194.2) JP Morgan has downgraded Sage Group Plc. to 'underweight' from 'neutral' with a target cut to 200 pence from 245 pence, market sources said. In a note published this morning, JP Morgan has downgraded Sage Group as it believes the group's price to earnings multiples will continue to de-rate as organic growth decelerates in a difficult macro environment and competition remains high in the sector. The broker added that it expects organic revenue growth to slide from 7 percent in full-year 2007 to 5 percent in 2008 and to 4 percent in 2009. JP Morgan said that it has cut its 2008 to earnings per share (EPS) by 1 percent and its 2009 EPS by 3 percent.

[beaudelaire] 16/7/2008 10:06

There is talk of a big rally in the markets in the coming days.
Oil to continue coming down sharply will be the trigger.
It started yesterday when the FED said the US economy was slowing.
However Techs were the best performers.

[beaudelaire] 11/7/2008 11:47

Agree Maddox -
Sage business is also very stable and resilient
to any economic unstability.
60% of its revenues are repeat orders
from excisting customers.

[maddox] 11/7/2008 09:52

>> thanks for pointing out the pressies jim.

>> beau, it must also be one of the best to trade. Against a backdrop of extremely sound fundamentals, excellent business strategy and growth prospects - its surprisingly susceptable to criticism.

Regards, Maddox

[beaudelaire] 08/7/2008 11:47

Sage has one of the best cash generation ever.
Doubled the divi.
Previous results were above expectations.
Repeat orders are 60% of total turnover.
This is the most resilient stock to own.

[jimandsons] 08/7/2008 11:24

Analysts presentations available -

[geovest] 03/7/2008 17:05

nothing that's not also going on in the rest of the market

[don one] 03/7/2008 16:44

what is going on with sage

[jimandsons] 03/7/2008 15:24

Anybody know where this presentation is?
2 July 2008


The Sage Group plc


ANNOUNCEMENT


The Sage Group plc is today hosting an analyst and investor seminar at their Newcastle
headquarters. No new or price sensitive
information will be disclosed.

Copies of the presentations will be available on the website, www.investors.sage.com,
later today.

[maddox] 03/6/2008 21:14

Evolution put out a 'Reduce' reiteration and 190p target again today.

They seem not to have noticed the recent very good results?!? ...but then again, they called them wrong, as indeed they did on 8th May, 14th April, 18th March, 25th February and 4th February.

My my hasn't their analyst been busy I wonder if each of these reports revealed further insights into Sage's business? Is there perhaps some personal performance target achieved through re-publishing the same old stuff sometimes up to twice a month? Or perhaps Evolution is intent on bludgeoning Sage back down to 190p?

As I've said before 'Pearls before swine......'

Regards, Maddox

[don one] 14/5/2008 14:26

what price can these go 2 i want 2 sell

[maddox] 10/5/2008 20:41

An excellent set of results:

Financial highlights
Revenues increased by 9%* to £640.4m (H1 2007: £588.7m*)
EBITA* margin maintained at 24% (H1 2007: 24%*)
Adjusted pre-tax profit^ rose by 9% to £138.0m (H1 2007: £126.3m)
Adjusted earnings per share^ increased by 9% to 7.30p (H1 2007: 6.72p)
Operating cash flow of £187.4m, representing 123% of EBITA (H1 2007: 114%)
Rebased interim dividend increased to 2.43p per share (H1 2007: 1.27p per share)

"These results demonstrate the strength and resilience of our business model, based on the high proportion of subscription revenues which underpin our
organic growth. Almost 60% of our revenues are derived from subscription contracts, allowing us to grow our business through periods of challenging
economic conditions. The predictability of our revenue streams and the high degree of recurring subscription revenues, combined with our large, loyal,
geographically diverse, customer base, give us confidence for the full year."

"North American business, excluding Sage Healthcare Division, grew in line with our expectations despite a more challenging economic environment. Sage Our Healthcare Division implemented a number of actions aimed at increasing support retention and improving overall customer satisfaction."

"We continue to evaluate a strong pipeline of acquisition opportunities but remain disciplined in our valuation appraisals."

"We are also actively pursuing opportunities in emerging markets."

So, little cause for concern then, good organic growth, margins maintained, and throwing off cash to be used for acquisitions. Oh and that 90% increase in the dividend.

Basically, the business model is totally sound and they have further value adding acquisitions lined up. I'm particulary pleased to hear the pursuit of opportunities in emerging markets where their strategy will be just as successful only in a more benign environment.

Regards, Maddox