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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Sage Group Plc | LSE:SGE | London | Ordinary Share | GB00B8C3BL03 | ORD 1 4/77P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
2.00 | 0.16% | 1,265.50 | 1,266.00 | 1,267.00 | 1,269.00 | 1,249.50 | 1,267.00 | 2,194,683 | 16:35:27 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Prepackaged Software | 2.18B | 211M | 0.2059 | 61.49 | 12.97B |
Date | Subject | Author | Discuss |
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12/11/2018 12:08 | Spacecake, What is more interesting than The Register article that you helpfully posted - are the comments below.... some of which are very insightful. Regards Maddox | maddox | |
12/11/2018 11:05 | Hi Mozi, To give you a straight answer - yes, I've been buying on the decline in the share price I'm taking a contrarian view. SGE have undertaken a radical and very necessary transformation of the business - they had accomplished this without mishap until the very end. Stephen Kelly unfortunately made a wrong call announcing the end of the transformation - and a 9% organic growth target - then suffered effectively two profit warnings. He'd got rid of a whole raft of management, was impatient for change, drove Sage hard and appears to have lost the 'dressing room' to use a football analogy - and paid the price. Also, the product/service/dist Sage's competitors Quicken (from Intuit) et all, are looking attractive. Xero in particular has a following of zealots - I'm amused by the level of enthusiasm they have for what is after all an accounting package. So it all looks pretty grim at the moment.... On the other hand, >> the transformation was absolutely necessary, and provides them with a new set of excellent products; >> they have a re-vamped sales/distribution model that is working in all but a couple of geographies; and >> strong fundamentals - margin, cash generation etc. I therefore think Mr Market is seeing the glass as half-empty whereas I see it as half-full. I'm long Sage and happy to maintain that position. I may of course be wrong and I would not advise anyone to buy Sage shares of course but DYOR and lets discuss. Regards, Maddox | maddox | |
03/11/2018 10:52 | From FGT factsheet - nick train Commentary In September, the NAV was down 2.9% on a total return basis, the share price was down 3.0% on a total return basis, while the index was up 0.7%. We were surprised by the sudden dismissal of Stephen Kelly as CEO of Sage in late August and therefore not surprised by the weakness of the company’s shares in the aftermath. Admittedly his departure follows a period when Sage has struggled to meet the perhaps overly ambitious growth targets the CEO had set for the company. In addition, we were discomforted earlier this year by the very public announcement of the sacking of 30 Sage executives at the time of one of those revenue growth misses. That public sacrifice smacked, fairly or not, of senior officers of the company diverting responsibility for not hitting their own targets away from themselves and on to employees. We note that one media comment on Stephen Kelly’s departure highlighted that auto da fe as the moment he “lost the dressing room”. Nonetheless, the dismissal is a surprise. His tenure was less than four years, while, from the outside, the strategy he has implemented looks appropriate. We are forced to assume that his departure was considered an urgent priority, given its abruptness in the middle of a half year trading period. It is common for a CEO to leave at short notice when either trading falls woefully short of expectations or when the CEO has put his or her name to a big acquisition that turns out to be a lemon. However, neither appears to be the case. Sage reaffirmed its guidance, give or take, for the current year and reassured that Stephen Kelly’s big deal – the purchase of Intacct in the US for £650m (biggish potatoes by Sage’s standards) – continues to meet or beat expectations. What remains is the unanswered question for the company and its investors. A question that presumably the board felt Stephen Kelly was unable to find an answer to. Namely, can this notably successful C20th technology company make a necessary transition to become a successful C21st one? It is well understood that the advent of “cloud” computing services has offered accounting software companies like Sage the opportunity to provide even more valuable services to its customers at even lower cost. Cloud should bring big productivity gains to its users and valuable revenues and profits to its providers. Sage acknowledges it was slow to recognise the significance of cloud for its customers and that this tardiness has allowed some younger, cloud-focussed competitors to take mind and market share away from the “sleepy” incumbent. We have known this ourselves for many years and have persistently encouraged Sage to take the actions required to avoid the fate of the companies described in Clayton Christenson’s classic study of corporate complacency – The Innovator’s Dilemma. At times Sage gave the appearance of being far more interested in financial engineering – share buybacks and maintaining its stellar dividend growth record – than in software engineering. Although, admittedly, not under Stephen Kelly, who at least introduced a sense of urgency to the company’s innovation efforts. Our current thinking is this: incumbency is not necessarily a bad thing. Sage still has powerful competitive advantages and every opportunity and incentive to exploit them. A 3 million global installed customer base (across which £3 trillion of business crosses every year) generates high profit margins and cash. Those internally generated funds are very valuable for a business needing to invest in change. One statistic from Sage’s Capital Market Day in January 2018 resonates here. This is that the company has 9 million interactions with its customers every year – helping small business with questions relating to accounts, tax or regulation. 9 million contacts a year is nearly 25,000 every day. That is the evidence the service Sage offers to its installed base is highly valuable to those customers and that, at the very least, Sage is not a business going to evaporate in a puff of smoke. Meanwhile, Sage’s two most vocal and public competitors are Xero and Intuit. Both lay claim to having been more successful than Sage in delivering cloud services. We can’t help note, though, that investors know this already. Xero is valued at 18x its annual sales, while Intuit, which we own in our global strategies, trades on 10x sales. Meanwhile, Sage now sells on 3.5x sales. This is both a warning that Sage’s cost of capital will continue to rise relative to its rivals, if it cannot match their success. But it is also an indication of the value gap that could close if Sage can execute on its technology transition. | mozy123 | |
03/11/2018 08:19 | Can sage make 225p, well it's going in the right direction, maybe the ex CFO to new CEO can sort this mess out. Maybe the new CEO should show some love to the customers, call them in and meet them at the NEC or similar large venue instead of hiding behind a wall of senior managers. Get the managers out on the stage explaining how they intend to help the customers and charge them less for it. But the title of the article below is sooo right !! | spacecake | |
02/11/2018 22:18 | How is Steve the right man? They've been missing guidance this year, which surely he was involved with setting | dan_the_epic | |
02/11/2018 19:59 | Maddox, are you a buyer of Sage at these levels, you think they can compete with intuits cloud and offerings eventually? | mozy123 | |
02/11/2018 10:54 | Excellent news. Very pleased to see that they've appointed Steve Hare, the current CFO and acting CEO,as CEO. I must say that he is has been very impressive as CFO and I don't think anyone will doubt that he's the right person to steer Sage through the next stage of development. Let's hope that they now appoint a new CFO quickly so that he can focus solely on his CEO role. Regards Maddox | maddox | |
04/10/2018 13:22 | Not sure about that. | hatfullofsky | |
03/10/2018 15:02 | hxxps://www.accounta | stevemace | |
04/9/2018 12:56 | Analysis in the FT today for anyone interested - Sage's solid reputation shaken. | essentialinvestor | |
31/8/2018 17:38 | I’ve been looking at Sage. It’s clearly a strong business. Very good write up by Value Investor this week. It indicated that the dividend is too low and dividend growth of 8% was probably unsustainable if Sage is only growing earnings and revenue by about 5% which is what they have been doing. The write up basically summarised that it was worth looking at when closer to £4. It was a really good article. CEO going sort of emphasises that this is potentially a bit of a value trap with more downside than upside in the short term. One to keep on the watch list. | topvest | |
31/8/2018 10:27 | Chart down to £5. Sage are facing v v stiff competition | tsmith2 | |
31/8/2018 10:08 | Note the proviso to the achievement of guidance. Underline that in red. | essentialinvestor | |
31/8/2018 09:59 | Could be a triple bottom on that chart | volsung | |
31/8/2018 08:10 | With the weakness of £ and noCEO they must be a takeover target and I have added on that basis. | peter27 | |
31/8/2018 07:45 | Sad as Stephen is nice chap, well liked and respected, however turning Sage round was always going to be a huge challenge, particularly with the discounting new boys snapping. | andrewhbruce | |
31/8/2018 06:20 | Rewarded for failure yet again. | spacecake | |
23/8/2018 11:34 | Hi Rock Star, Yep, I agree, that is the received wisdom. The picture isn't clear and FWIW this is how I see it. Xero, Quickbooks and the like are positioned very much as entry-level products sold with free offers and have low price points. This is a market segment that Sage wasn't really competing in until they launched Sage One Mobile App Product(in 2014 I believe). They then followed the Xero, Intuit heavily discounted pricing-approach - but quickly dumped it as they weren't happy with the quality of the business they were acquiring. I think this is because they want to target serious growing businesses that will be prepared to pay full-price for a scaleable product-set. The one-man business isn't really what they are after. On the other hand, Sage results show that they are clearly growing, recurring revenue is high, and have stated that customers are not being lost to competitors. This of course flies in the face of Deutsche Bank's Analyst that says that they are under pressure in their core markets (Scale-up and Enterprize). So, Sage's glass is either half-empty or half-full depending on how you wish to look at it. Regards, Maddox | maddox | |
23/8/2018 09:25 | All I hear is Xero and Intuit are taking market share. Not sure where the best place is to check this out a real time basis. | rock star | |
20/8/2018 11:38 | Hi Guys, Well I don't doubt Deutsche Bank's findings - my own scuttlebut research has found the same issues. Accountants and Sage customers have the perception that their products are out-of-date and the likes of Xero and Intuit have far superior products. No doubt Xero and Intuit didn't seek to dissuade the Deutche Bank Analysts that that is the case. The real problem for Sage is that many of their customers and their customers' accountants are off-contract (support and maintenance)and out of touch with Sage. Whilst Sage have had a complete transformation over the last two years - a large portion of their customer base and target market are unaware. This is both a problem and an opportunity for Sage - these off-plan 'customers' are not generating any revenue for Sage. In theory, they should be a soft target - and get them onto a subscription and that 7% organic growth looks a very realistic goal. | maddox | |
20/8/2018 10:46 | It's all guess work intil the actual come out in November. | spacecake |
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