Sage Share Discussion Threads

[botwoman] 26/1/2006 10:07

nice move today, will it charge through 260

[botwoman] 25/1/2006 12:32

moving up nicely now, 260p soon?

[botwoman] 25/1/2006 10:50

SAP soaring today

[johnsmithbillion] 23/1/2006 16:12

Lyntwyn, can you do better than that please. they didnt come down enough today and now they are going up.

[botwoman] 23/1/2006 12:30

only down a touch. and we got SAP results wednesday, that could be interesting

[maddox] 20/1/2006 22:06

Botwoman,

Get back in, obviously. My strategy doesn't change with the share price gyrations - that's tactics!

Regards, Maddox

[botwoman] 20/1/2006 12:41

249.38p whats your strategy now then?

[maddox] 20/1/2006 09:27

Unfortunately, that has not given me an opportunity to get back in.
Damn!

Regards, Maddox

[johnsmithbillion] 20/1/2006 09:12

coming back to 240 IMO so i can buy some more ;)

[botwoman] 20/1/2006 09:09

nice rally, could be back up through 260 in no time!

[botwoman] 20/1/2006 08:53

251 now up we go!

[botwoman] 20/1/2006 08:39

testing 250 now

[botwoman] 20/1/2006 08:29

lets hope they have turned for the good today, close closer to 260p.

[lyntwyn] 20/1/2006 08:19

yes, I agree with Maddox. This pullback was inevitable after the recent ride north. I missed the opportunity to sell and buy back, as much as I had awaited the chance! Still, very happy to continue to hold. Might even top up.

[maddox] 20/1/2006 00:28

Botwoman,

If I believed the market was absolutely correct at every point in time then I wouldn't be here. Its your own view versus the market price. You know my view - the market is wrong - and that presents an opportunity. A portion of my holding has been liquidated with this fall and I'll be buying back in at a lower price.

No worries.

Regards Maddox

[botwoman] 19/1/2006 21:56

rmillaree/maddox,

Sage experts, if Verus is such a good acquisition, why is the sare price falling when the FTSE is soaring? why are people not jumping in for the expected ride upwards?

[johnsmithbillion] 19/1/2006 15:24

nearly there, just 5.5p to go. can you give them a push?

[johnsmithbillion] 19/1/2006 09:18

yes please! yes please! my favourite company of all!

[jimcocallis] 19/1/2006 01:58

240 4 me imho dyor etc

[johnsmithbillion] 18/1/2006 10:11

im thinking about buying loads of these. is this the bottom, or should i wait for 230p?

[maddox] 11/1/2006 17:26

Lyntwyn,

Brokers have been consistently 'mixed'. UBS's clients will have missed the recent rise - a case of sour grapes perhaps. Also, this rise must put further immediate progress in doubt, so not surprising if more Brokers like Citibank, move to neutral from buy. Nevertheless, 'wise investors' to quote Tempus will see the logic and value beyond the solely combined financials.

Sensible acquisitions like this should underpin the valuation at current levels - we can now see where the growth will be coming from to justify a high p/e.

Regards, Maddox

[lyntwyn] 11/1/2006 09:39

Mixed reviews from brokers.

Newcastle-based Sage, which supplies small and medium-sized businesses (SMEs), said the deal will help it meet growing demand from its North American customers for payment processing services, such as credit card and cheque processing. In response, WestLB reiterated its 'outperform' stance and said the "significant acquisition shows ambition". The broker added that Verus is very profitable and consequently the price looks fairly full. Historically, Sage has bought companies with operating margins of 5-15% and raised them to around 25% by selling its own service contracts to the top end of the acquired customer base, WestLb said. And whether the strategy behind the Verus deal is margin enhancement or cross-selling (more likely) remains to be seen. Meanwhile, UBS retained its 'neutral' stance and said investor's reaction is expected to be muted initially given the price paid and the move beyond Sage's core competency. It added the poor cross-selling experience with Interact is also likely to weigh on investors' minds.
Downgraded to 'hold' from 'buy' at Citigroup Smith Barney with a reduced price target of 270 pence, dealers said. In a note to clients, the broker said the move follows the group's acquisition yesterday of Verus in the US. Citigroup argued the deal has a strong rationale as it brings a credit card and cheque processing offering to Sage's existing footprint in the US and is part of Sage's strategy of becoming a complete business solutions provider. Furthermore, Verus brings a strong cross-selling opportunity, primarily for Sage's Peachtree customer base, which includes around 300,000 retailers. But it added the acquisition is relatively large, 184m, given Sage's recent history, and the price is relatively full. As a result the acquisition is likely to be only moderately earnings enhancing -- around 3% in 2007. Citigroup argued that Sage still has around 300m of capacity for further acquisitions to drive further EPS upside however it estimates that this is only likely to enhance EPS by a further 9% which is similar to its target price upside.

[botwoman] 10/1/2006 12:48

here it is...

Sage's growth plans make it a valuable prize for predators

WISE investors have long recognised the qualities of Sage, the Newcastle-based software group that supplies a third of UK businesses with accountancy software. Britain's largest listed software firm has delivered steady growth over the past three years by making itself synonymous with back- office kit for companies that have fewer than 100 staff.
Sage's sales of accounting and payroll software are often worth less than £200, but as there are more than 4.7 million of them, they add up. The group also makes half of its revenues from support contracts - providing help-desk services to companies that are too small for in-house teams.



Around 5 to 6 per cent of Sage's annual growth is generated organically by encouraging customers to buy more expensive products and more services. Another tactic is to buy lots of small rivals, offering similar products, and then drive the margins up, a skill at which Sage so far has been incredibly successful.

Despite the robust performance, analysts have yearned for something that would trigger a re-rating. Yesterday's acquisition, the biggest for five years, could be that trigger. Sage wants to connect the back office with the front office and the purchase of Verus Financial Managment, the United States-based merchant services provider, will take it a long way towards that goal. Verus, based in Nashville, processes customer transactions through credit cards, debit cards and cheques. The idea is to integrate Verus's services with Sage's accounting solutions so that when a customer's purchase is processed, a book-keeping entry is automatically generated for the firm's accounts.

The £184 million cash deal could prove to be a turning point for the group. Microsoft, for one, has been eyeing the lucrative territory occupied by Sage, so this entry into the front-office world and the whole area of business process outsourcing will keep Sage one step ahead of the behemoth.

Expect further acquisitions, some equally chunky, this year, as the company has indicated that it will gear up and increase its net debt from about £100 million to £600 million in 2006. Growth should also come from geographical expansion, with Sage investigating China and Italy.

With 1.3 million business customers worldwide paying for renewable service contracts, Sage would also be a valuable prize for a predator. Buy.