Sage Share Discussion Threads

[maddox] 07/12/2015 13:20

Hi brain smiley,

Absolutely, not least many of the analysts following them, as I've been posting up. Some of them are extremely negative. It does make you wonder what your missing??

Regards, Maddox

[brain smiley] 07/12/2015 11:30

It can be de-rated as well.Plenty of sceptics of Sage and other suddenly high PE stocks.I think this is a bubble.

[maddox] 05/12/2015 22:56

hi brain smiley,

Yep this is what a re-rating looks like, the numbers improve and the rating the market places on them increases too - a favourable double whammy!

Regards, Maddox

[brain smiley] 04/12/2015 12:38

2016 PE of around 22.3.The market has gone mad.

[maddox] 04/12/2015 12:21

At last we see an upgrade ....

Sage Group The PLC (LON:SGE) was upgraded by JP Morgan Cazenove to Overweight rating in an analyst note issued to clients and investors on Friday, 4 December. The firm after the upgrade has GBX 670.00 target on the stock. JP Morgan Cazenove’s target is 18.48% from SGE’s last price.

hxxp://www.financialmagazin.com/jp-morgan-cazenove-time-to-give-faith-in-sage-group-the-plc-lonsge/

Regards, Maddox

[market sniper1] 03/12/2015 10:59

The Sage Group plc (SGE) to Issue Dividend of GBX 8.65
December 2nd, 2015 • 0 comments • Filed Under • by ABMN Staff

The Sage Group plc logoThe Sage Group plc (LON:SGE) declared a dividend on Wednesday, December 2nd, Market Beat.com reports. Shareholders of record on Thursday, February 11th will be given a dividend of GBX 8.65 ($0.13) per share on Friday, March 4th. This represents a yield of 1.5%. The ex-dividend date is Thursday, February 11th. The official announcement can be accessed at this link.

The Sage Group plc (LON:SGE) traded up 0.09% on Wednesday, reaching GBX 577.00. The company’s stock had a trading volume of 7,365,081 shares. The stock’s 50 day moving average is GBX 547.01 and its 200-day moving average is GBX 531.82. The Sage Group plc has a 52 week low of GBX 363.39 and a 52 week high of GBX 587.50. The firm’s market capitalization is GBX 6.21 billion.



A number of research analysts have recently issued reports on SGE shares. Citigroup Inc. reaffirmed a “buy” rating and set a GBX 585 ($8.80) price objective on shares of The Sage Group plc in a report on Tuesday, August 11th. Panmure Gordon reiterated a “hold” rating and set a GBX 516 ($7.76) target price on shares of The Sage Group plc in a research report on Monday, September 28th. AlphaValue restated an “add” rating and issued a GBX 565 ($8.50) price objective on shares of The Sage Group plc in a research report on Thursday, August 6th. Bryan Garnier & Cie reiterated a “neutral”; rating and issued a GBX 520 ($7.82) target price on shares of The Sage Group plc in a research note on Tuesday, October 6th. Finally, Numis Securities Ltd upped their price target on The Sage Group plc from GBX 563 ($8.47) to GBX 573 ($8.62) and gave the stock an “add” rating in a research note on Tuesday, October 6th. Five investment analysts have rated the stock with a sell rating, ten have issued a hold rating and three have given a buy rating to the company’s stock. The Sage Group plc has a consensus rating of “Hold” and a consensus target price of GBX 525.72 ($7.91).

The Sage Group plc is a United Kingdom-based company, which provides small and medium sized enterprises (LON:SGE) with a range of business management software and services, including accounting, human resource (HR) and payroll, enterprise resource planning (ERP), payments, customer relationship management (CRM), mobility and business intelligence. The Company operates through three segments: Europe, which includes operations in France, the United Kingdom and Ireland, Spain, Germany, Switzerland, Poland, Portugal and Sagepay; Americas, which includes the United States, Brazil and Canada, and AAMEA, which include Africa, Australia, Middle East and Asia. The Africa operations are based in South Africa and the Middle East, and its Asia operations are based in Singapore, Malaysia and the United Arab Emirates. Its products include Sage One, Sage 100, Sage 50, Sage ERP X3, Sage Payment Solutions, Sage Office Line, Sage Murano, Sage Pastel, Sage VIP Payroll, Sage Handisoft and Sage 200.

[market sniper1] 03/12/2015 09:54

SGE SAGE GROUP

UPGRADE

Sage Group (The) PLC SGE Numis Add 584.75 577.00 - 640.00 Upgrades

[market sniper1] 03/12/2015 09:44

SGE SAGE GROUP PLC (financial software)



Broker Comment from Hargreaves Lansdown.....

HL COMMENT (2 DECEMBER 2015)

Sage has released full year results. Organic revenue grew by 6%, with recurring revenue up 9%, driven by strong growth in software subscriptions and the roll-out of new products such as Sage One. Organic operating profit increased by 8% to £380m, and the organic operating profit margin rose to 27.1%. Underlying basic earnings per share increased by 12.6% to 25.00p, enabling the full year dividend to be lifted by 8% to 13.10p per share.

The outlook statement was positive but margin guidance was a little light of analysts' expectations; the shares fell by around 4% in early morning trading.

Key highlights

Revenue in Europe grew organically by 5%, North America: +4%, International (Africa, Brazil, Australia, Middle East and Asia): +14%.
Free cash flow increased by 29.2% to £296m.
Contract renewal rate increased to 84% (FY14: 83%).

Outlook

Targeting at least £50m of run-rate annualised savings by the end of FY16, to be reinvested in growth initiatives.
Expect to deliver organic revenue growth of at least 6% and organic operating margin of at least 27% in FY16.

Our view:

We like Sage; it generates prodigious cash flows and benefits from a large base of high quality, recurring revenues. The company is very shareholder-friendly - dividends have been maintained or grown every year for the last two decades; and the shares currently offer a prospective yield of 2.5% (variable and not guaranteed).

A key part of Sage's strategy is to increase the proportion of recurring revenues, by encouraging its customers to sign up to a subscription-based model. The group appears to be making good progress in this regard. Recurring revenue increased by 9% in FY15 and now represents 68% of the group total, up from 66% in FY14.

Technology disruption is a risk in this industry, but Sage isn't sitting on its laurels. New products such as Sage One appear to be gathering momentum. The group is seeking to 'leap-frog' first generation cloud competitors through integrated latest generation cloud-platform products and through scalable digital distribution channels. Meanwhile, that large bank of recurring revenues makes it very hard for competitors to make significant inroads.

Following a strong run the shares trade at the top end of their historical valuation range, on a forward price to earnings ratio (P/E) of 20.6x. But few companies offer the prospect of such reliable growth. We feel in an uncertain economic environment, businesses with recurring revenues, robust balance sheets and strong cash flows are likely to remain in demand, although there are no guarantees.

All yield figures are variable and not guaranteed.

[market sniper1] 03/12/2015 09:11

Broker Comment from Hargreaves Lansdown.....

HL COMMENT (2 DECEMBER 2015)

Sage has released full year results. Organic revenue grew by 6%, with recurring revenue up 9%, driven by strong growth in software subscriptions and the roll-out of new products such as Sage One. Organic operating profit increased by 8% to £380m, and the organic operating profit margin rose to 27.1%. Underlying basic earnings per share increased by 12.6% to 25.00p, enabling the full year dividend to be lifted by 8% to 13.10p per share.

The outlook statement was positive but margin guidance was a little light of analysts' expectations; the shares fell by around 4% in early morning trading.

Key highlights

Revenue in Europe grew organically by 5%, North America: +4%, International (Africa, Brazil, Australia, Middle East and Asia): +14%.
Free cash flow increased by 29.2% to £296m.
Contract renewal rate increased to 84% (FY14: 83%).

Outlook

Targeting at least £50m of run-rate annualised savings by the end of FY16, to be reinvested in growth initiatives.
Expect to deliver organic revenue growth of at least 6% and organic operating margin of at least 27% in FY16.

Our view:

We like Sage; it generates prodigious cash flows and benefits from a large base of high quality, recurring revenues. The company is very shareholder-friendly - dividends have been maintained or grown every year for the last two decades; and the shares currently offer a prospective yield of 2.5% (variable and not guaranteed).

A key part of Sage's strategy is to increase the proportion of recurring revenues, by encouraging its customers to sign up to a subscription-based model. The group appears to be making good progress in this regard. Recurring revenue increased by 9% in FY15 and now represents 68% of the group total, up from 66% in FY14.

Technology disruption is a risk in this industry, but Sage isn't sitting on its laurels. New products such as Sage One appear to be gathering momentum. The group is seeking to 'leap-frog' first generation cloud competitors through integrated latest generation cloud-platform products and through scalable digital distribution channels. Meanwhile, that large bank of recurring revenues makes it very hard for competitors to make significant inroads.

Following a strong run the shares trade at the top end of their historical valuation range, on a forward price to earnings ratio (P/E) of 20.6x. But few companies offer the prospect of such reliable growth. We feel in an uncertain economic environment, businesses with recurring revenues, robust balance sheets and strong cash flows are likely to remain in demand, although there are no guarantees.

All yield figures are variable and not guaranteed.

[maddox] 02/12/2015 17:09

Unbelievable, what a roller coaster ride today!! After a 5% fall on opening Sage has actually closed up 0.5p at 577p.

[maddox] 02/12/2015 15:07

I've been trying to get some further insight into that early c.5% drop.

It appears that there was some confusion caused by the statutory reporting of Operating Profit. Under the required IFRS (International Financial Reporting Standards) treatment Sage have had to net-off certain items such as £62m goodwill impairment relating to their acquired Brazilian operations. Looking at the statutory operating profit rather than the organic profit Sage's profit has fallen - hence the immediate share price reaction.

The goodwill impairment is non-cash and in local currency terms Sage's revenue grew 8%; but due to Brazil's economic uncertainty and the value of the Real the economic value of their operations has been reduced (i.e. impaired in the jargon).

Whilst I understand the rationale I'm not sure that taking these non-cash items through the P&L, as IFRS requires, is particularly helpful - as we've witnessed today.

As I write the share price has recovered somewhat and is now 1.91% down at 565p.

Regards, Maddox

[maddox] 02/12/2015 12:14

These results show that Sage is performing well. The key metrics are:

>> Revenue growth target of 6% was met;

>> Organic Operating profit £380m is up 8.3%;

>> Underlying eps 25p up 12.6%;

>> Dividend up 8% to 13.1p; and

>> Free cash flow up 29% to £296m (c. 21% of revenue).

Which on the face of it make the initial share price drop this morning look a bit excessive, even if you factor in that the analysts seem to have higher growth expectations than Sage is prepared to accept? Underneath these figures there is a lot of transformation taking place:

>> Move to subscription pricing that depresses revenue in the short-term:

>> Restructuring to become a Global business from a federated country- specific operating structure: and

>> Launch of new cloud-based products.

Breezing quickly through what is a huge amount of detail they appear to be making good progress on their transformation plan (as outlined in its Capital Market Day in June 2015). However, it’s still very much early days and there are up-front costs and problems and issues in some areas but also many signs that the strategy is sound, they are doing the right thing and it appears to be working.

Regards, Maddox

[maddox] 02/12/2015 10:53

Hi EI,

There is a lot to digest, however, it would appear that Mr Market was expecting Sage to greatly exceed rather than just beat their stated growth target.

The analysts have been pressing for more stretching growth target, above their own target of 6%, but Sage have sensibly stuck to a target that they can achieve - and have just exceeded with 6.7% annual growth these results.

There is little else that I can see in the results that would explain the share price drop.

Regards, Maddox

[essentialinvestor] 02/12/2015 09:12

No comment folks.

[maddox] 19/11/2015 12:02

Hi Guys,

Well the full year results will be out on the 2nd December - so we won't have too long to wait. I'm long and set out my views:



so I'm also keen to see whether things are progressing as well as I hope.

Interesting article with Stephen Kelly on the 5th Nov:



'"Even now our growth in subscriptions is 30% plus, so we'll continue to see momentum and healthy growth and that portion of our business will grow faster. And what we've said on perpetual licences business from quarter to quarter is going to go up and down.
And some quarters it might go down."

"Generally the trend is good on licences and the really accelerated growth is on the subscription business. So we do this right and challenge ourselves pretty hard to say within that we want to maintain 28% margin. We are very profitable, create great free cash flow and progressive dividends compared to our competitors. The 28% operating margin underpins the business"

Sage, he says is not expecting a pinch.'

So I think there is cause for optimism, but we'll see....

Regards, Maddox

[mellorscarthwaite] 16/11/2015 19:36

run up to results

[essentialinvestor] 13/11/2015 15:55

On what basis?.

[holdingtight] 13/11/2015 15:52

I'm in for a sizeable punt. Looking for 3 or 4 % within the next few weeks.

[maddox] 11/11/2015 21:14

With the shares now at 538.5p lets have another look at the Broker recs (courtesy of Digital Look):

Strong Buy - 0
Buy - 3
Neutral - 5
Sell - 0
Strong Sell - 3

So, we have 11 opinions rather than 15 last time I checked and 20 the time before. The balance has now shifted towards neutral if still on balance more the negative side. It would appear that the shift is more due to some brokers retreating to the sidelines rather than changing their view.

Cheers Maddox

[maddox] 04/11/2015 17:05

Hi skinwalker,

Let's hope we see the recent 575p high again soon!

One of my sell criteria is when I get bored with a stock. When you get tiered of a stock and cannot be bothered to read the RNS's etc., I think it's a good time to sell. Otherwise you stand a good chance of taking you're eye off the ball and getting caught out.

I'm interested by the brokers' difference in view with my own. This is keeping me engaged at the mo - what are they seeing that I'm missing?

Regards, Maddox

[skinwalker] 04/11/2015 10:39

Maddox - thanks for this - most interesting.
I'm a long-term Sage shareholder, holding through thick and thin.
At present, however I am tempted to consider selling if/when the share price reaches 570

[maddox] 27/10/2015 21:58

So since I perceived what I regarded as a significant improvement in the prospects (4 Dec 2013 post 3330) the shares have moved 43.6% up from 373p to 536p and paid 16.57p in dividends. So anyone following the brokers would have missed out on a 48.5% total shareholder return.

Nevertheless, I still hold the opinion that Sage has yet further to go despite the brokers' (mostly) diametrically opposite views on Sage's prospects.

Regards,

Maddox (long Sage)