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 Shares Traded Last Trade
  0.40 0.06% 714.80 1,957,037 16:35:01
Bid Price Offer Price High Price Low Price Open Price
715.00 715.40 716.80 701.80 716.80
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Software & Computer Services 1,936.00 361.00 24.49 29.2 7,745
Last Trade Time Trade Type Trade Size Trade Price Currency
17:47:56 O 216,426 714.80 GBX

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Date Time Title Posts
18/9/202012:29CAN SAGE make it to 225p - a superb stock3,620
10/5/201321:05SAGE: CHARTS, NEWS ETC.16
14/4/200415:04100p -- Only debate now is when680
17/12/200311:28SAGE SELL!SELL!! TARGET PRICE 120P12

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Sage Daily Update: Sage Group Plc is listed in the Software & Computer Services sector of the London Stock Exchange with ticker SGE. The last closing price for Sage was 714.40p.
Sage Group Plc has a 4 week average price of 699.20p and a 12 week average price of 651p.
The 1 year high share price is 794.60p while the 1 year low share price is currently 515.60p.
There are currently 1,083,521,827 shares in issue and the average daily traded volume is 2,427,668 shares. The market capitalisation of Sage Group Plc is £7,745,014,019.40.
maddox: Following the Q1 update it appears that Canaccord Genuity have upgraded SGE to a Buy with a share price target of 820p ('Neutral' and 770p previously). Meanwhile three others have reaffirmed their recommendations - but have all increased their share price targets: Deutsche Bank reiterates 'Sell' with a target price of 725p (650p) Credit Suisse reaffirms its 'underperform' share price target 640p (610p) Barclays reiterates 'Underweight' with a target price of 620p (580p) So Canaccord has broken ranks, it'll be interesting to see whether we get other upgrades if the positive updates continue this year. Regards Maddox
maddox: The Brokers Analysts are overwhelmingly negative on Sage: Strong Buy........2...(6) Buy...............0...(1) Neutral...........8...(9) Sell..............2...(0) Strong Sell.......7...(3) Brackets are the scores of one month ago .................19...(19) Source: Their share price targets are similarly pessimistic, for example, James Goodman at Barclays has recently (10 Jan) put 620p share price target and 'underweight' view. (This was an increase on his previous share price target of 580p) I've no idea what Goodman's rationale is - so difficult to contest. Regards, Maddox
maddox: The news that sage has finally getting around to disposing of its Sage Pay business is to be welcomed. It's difficult to reconcile this with the share price decline the last couple of days. My understanding is that payment acquiring is a competitive market with low margins. It doesn't fit strategically and the capital and resources are better redeployed to building the Cloud SaaS business that is higher margin and fast growing. Is Mr Mr Market seeing something I'm not I wonder?
maddox: Thanks mamcw, Always extremely valuable to have user insight and it'll be great to hear how your upgrade goes - well and trouble-free I hope of course. And your thoughts on Cloud 50 when you get yours hands on it. Nice to see the share price trending up (just above 600p as I post) just as we see Analysts downgrades :-) Regards Maddox
mozy123: 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.
dogwalker: SELL recommendation today by DBank....not exactly helping the share price, for now anyway.
mozy123: Going to take a while to move the business from the legacy desktop products to the cloud. (still use a desktop/network version at work) Very confident a business like sage can pull this off, in the mean time Xero and Intuit could easily buy Sage, so not really worried about the share price. The runway for these business's are huge. Nick Train says 1/70 firms globally use accounting software.
maddox: Hi walbrock82, Hmmm what business cycle are you referring to? Sage are just emerging from a period of huge transformation with target growth increasing to 7% for FY18 from 6.3% FY17. The Net Debt stood at £744m at 31 March 2018(31 March 2017: £434m), not close to £1bn, with the increase reflecting an increase in cash spent on acquisitions. Those acquisitions are performing well - so no likelihood of any impairment charge arising IMHO. And even if it did, it would be a non-cash balance sheet write-off against P/L that would reduce the statutory profit and the tax payable. It wouldn't affect cash flow. True, Operating Cash Flow is slightly down against organic growth in H1 due to an increase in working capital. This is what you would expect as a business accelerates its growth. On the other hand the Operating margin has been maintained at an excellent 27% and underlying cash conversion of 99%. As to dividend growth: Sage have a progressive dividend policy and have increased the annual dividend by 8%+ for each of the last three years. Sage is increasing the H1 dividend by 8% - so I don't know what increase you were expecting? They stated in the H1 Q&As that they have no intention to make any further large scale acquisitions - so again,I do not share your concerns. My view FWIW Mr Market appears to be in a very jittery mood and is hammering any Company that reports bad news. Sage have done this twice since January, and on the back of high expectations set at the Capital Markets Day last year. As a consequence the share price has fallen to below 600p from above 800p. IMHO Sage's fundamentals are sound, the transformation will generate accelerating growth and the share price will recover to above 800p in the next 18 months. But as always - no advice intended and please DYOR and happy to discuss your conclusions. Regards, Maddox
walbrock82: I feel the Sage Group£s business cycle is nearing its peak, but I could be wrong. With operating cash margin declining to the lowest since 2009, this isn£t justifying the high 20 times multiple. Add in total borrowing of close to £1bn to purchase a business at 9 times price to sales multiple, twice as high as Sage, it looks like more goodwill impairment is on the way. With £1.9bn, there are a few write-downs for management to implement. My biggest worry is the company£s operating cash flow appears not to grow and have stagnated for seven years. Meanwhile, market valuation is doubled, despite the share price falling by 23%. The rise could be down to bull market. My last concern is the company£s ability to increase their dividends given the high total borrowing and stagnate cash flow. Management may continue increasing their dividend for a few more years, but when they decide to make another large acquisition this could hamper dividend growth. Unfortunately, I wouldn£t feel comfortable investing at Sage Group£s share price at this level, knowing earnings is at single digit growth. For more on Sage, Accsys and Avon, click:
maddox: Just having a look at the technical position underlying the fall in Sage's share price - considering the recent RNS' and the declared short positions. There are no declared short positions greater than 0.5% - so the hedge funds are not (to any notifiable extent) selling Sage short. Aviva have declared that they have lent 0.12% of stock - presumably to Evil Knieval to short. Other institutions are holding their stock. So the sell-side looks pretty weak and very vulnerable - should buyers look to take advantage of the price on offer. Also, any seller short of shares will at some point need to buy back in. I'm taking the opportunity to get on the other side of Evil's position before he un-winds. in a tight market for Sage stock (which is the norm) the share price can only go one way. Regards Maddox
Sage share price data is direct from the London Stock Exchange
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