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Sage Group downgrades guidance following poor 'operational execution'

By BFN News | 07:24 AM | Friday 13 April, 2018


Software company Sage Group downgraded its annual guidance after first-half revenue growth missed its expectations owing to 'inconsistent operational execution'. The company said it expected revenue for the six months through March to rise by 6.3%, compared to growth in the same period a year earlier of 7.4%. The decline was due to lower recurring revenue growth, plus contract slippage in the Sage's enterprise software division. Full-year guidance was cut to around 7% organic revenue growth, down from previous guidance of around 8%, though operating margin guidance remained steady at 27.5%. In the first half, software subscription growth slowed to 25.3%, from 30.6%, while software and software-related services growth was 7.1%, compared to a decline a year earlier of 7.3%. Chief executive Stephen Kelly said the market opportunity for change, outlined at its recent capital markets day, remained unchanged. 'The revised revenue guidance targets for financial year 2018 reflect both the performance in the first half, but also our diligence in ensuring that we focus on recurring revenue to drive sustainable acceleration throughout the rest of the year as a platform into financial year 2019,' he said. Story provided by StockMarketWire.com

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