Final Results

Sage Group PLC
6 December 2000


                              Press Announcement

FOR IMMEDIATE RELEASE

                                                               6 December 2000

                 SAGE PRE-TAX PROFIT UP 46% TO £108.7 MILLION

                       FOR YEAR ENDED 30 SEPTEMBER 2000

The Sage Group plc ('Sage'), a leading supplier of accounting and payroll
software and related products and services for small to medium-sized
enterprises (SMEs), announces its unaudited results for the year ended 30
September 2000.

Key points:

  * Pre-tax profit up 46% to £108.7m (1999: £74.3m)
  * Turnover increased by 34% to £412.2m (1999: £307.0m)
  * Operating profit rises by 40% to £111.9m (1999: £79.9m)
  * Earnings per share up 40% to 5.92p (1999: 4.22p)
  * Support contracts at 30 September 2000 totalled 779,000 (1999: 648,000)
  * Dividends for the year raised 10% to 0.386p per share (1999: 0.351p)
  * Net debt at 30 September 2000 falls to £20.8m (1999: £58.3m)
  * Geographical analysis:

                              2000                              1999
£m                 Turnover          Operating       Turnover         Operating
                                        profit                           profit
UK                    132.1               55.0           99.2              39.6
Mainland Europe        93.7               22.9           85.6              16.3
US                    142.6               28.9          118.0              23.3
                      368.4              106.8          302.8              79.2
Impact of foreign         -                  -            4.2               0.7
exchange*
Acquisitions - US      39.4                5.4              -                 -
Acquisitions -          4.4              (0.3)              -                 -
Switzerland
                      412.2              111.9          307.0              79.9

* Foreign currency results for the year ended 30 September 1999 have been
retranslated at current year exchange rates to facilitate the comparison of
results.

Chairman, Michael Jackson stated: 'This strong set of results has been driven
by our focus on marketing our broad range of leading products and services to
new and existing customers together with our ability to add value to
acquisitions. Continued investment in our e-business products and services
provides further opportunity for growth. Despite the challenging market
environment, the Board is confident about the prospects for the current year.'

ENQUIRIES Paul Walker, Chief Executive, or Paul Harrison, Finance Director, on
          020 7831 3113 today and on 0191 255 3000 from tomorrow, or Giles
          Sanderson of Financial Dynamics.

ISSUED BY Financial Dynamics Ltd, Holborn Gate, 26 Southampton Buildings,
          London, WC2A 1PB. Telephone: [phone]



Overview

In a challenging year for our industry, we are pleased to be reporting a
strong set of results with turnover up 34%, operating profit up 40%, profit
before taxation up 46% and earnings per share up 40%.

It is now widely acknowledged that 1999 was a highly unusual year with
unparalleled demand from the small to medium-sized enterprise (SME) market for
Y2K compliant products. This high level of demand had the effect of bringing
forward upgrade decisions that otherwise would have been made later in the
cycle. As a consequence of this abnormal acceleration of demand, the trading
environment in 2000, particularly in the mid-market, has been difficult. At
the entry level, however, momentum was maintained as a result of the
continuing emergence of new businesses. At the high end of the SME market,
larger companies, having upgraded to Y2K solutions well before December 1999,
have started to come back into the market.

We were well positioned to respond to these challenging market conditions.
Firstly, we have a broad portfolio of products and services designed to meet
the needs of all companies in the SME market ranging from entry level
start-ups to larger companies with up to 1,000 employees. Secondly, we have a
well-established installed base business (selling products and services to our
existing customers) which now accounts for 64% of revenues. By placing
particular focus on selling our portfolio of products and services to our 2.5
million existing customers, we were able to sustain growth despite the
challenging market environment.

With regard to sales of new software, we felt the benefit of the strong Y2K
effect in the first quarter of the financial year, but thereafter the trading
environment underwent significant change. Sales of new software in the second
half were lower than those in the first half, although broadly level with the
sales achieved in the second half of the previous financial year. For the full
year, sales of new software licences were 20% ahead of prior year. Stripping
out the effect of acquisitions, sales of new software licences for the year as
a whole were broadly in line with 1998/99, a year which benefited from three
full quarters of Y2K activity.

As regards our installed base business, we made particular progress in selling
support contracts to our existing customers with the result that the number of
contracts increased to 779,000 (1999: 648,000) by the year end. Upgrade
revenue benefited from a concerted effort to encourage our customers to
upgrade to more powerful solutions, and this remains a focus of activity for
the current year. Installed base sales in the second half were up 13% on the
first half of this financial year, and were up 30% on the second half of the
previous financial year, and this despite the fact that the prior year
benefited from substantial Y2K upgrade revenues. Again, stripping out the
effect of acquisitions, underlying growth in installed base revenues was 17%.
Hence, even in a challenging market environment we were able to increase
revenues to our existing customers. Indeed, average revenue per existing
customer increased over the prior year, in part brought about by continuing
improvements in our marketing and telesales skills, but also by our ongoing
commitment to expand the range of products and services we offer.

With regard to the Internet, we have consistently said that the naturally
conservative nature of the SME community would lead to slower adoption of
e-business products and services than might be the case with large
multinationals. What has become clear over the past 12 months is that SMEs are
beginning to recognise that the Internet presents significant opportunities to
increase revenues, reduce costs and improve efficiencies. In the long term,
therefore, we expect customers to invest in our broad range of Internet
products and services. In the short term, however, we expect SMEs to remain
fairly cautious about investing significant sums in e-business products and
services.

Our commitment to developing relevant e-business products and services for the
SME market is as strong as ever and, despite the challenging market
environment, we invested heavily during the year in the development, marketing
and support of our e-business products and services. This investment, we
believe, is to the long term benefit of the Group.

During the past year we have made significant progress in reorganising our
Sage Enterprise Solutions (formerly Tetra) and Peachtree businesses; the two
major acquisitions of the previous financial year. As a result, both
businesses have reported significantly improved results. We acquired Best
Software, Inc. in February 2000 and are pleased with the progress that has
been made. Best is focusing attention on its market-leading fixed asset,
payroll and human resources software products and performance to date is in
line with expectations. We are placing particular emphasis on cross-selling
these products into our existing large US customer base.

Results, dividends and finance

In the year ended 30 September 2000, we increased turnover by 34% to £412.2m
(1999: £307.0m). Our operating profit rose by 40% to £111.9m (1999: £79.9m)
and pre-tax profit improved by 46% to £108.7m (1999: £74.3m). Earnings per
share increased by 40% to 5.92p (1999: 4.22p).

We are proposing a final dividend of 0.256p per share (1999: 0.233p) making a
total of 0.386p per share (1999: 0.351p) for the year, an increase of 10%.
Subject to shareholders' approval, the final dividend will be paid on 7 March
2001 to shareholders on the register at the close of business on 9 February
2001.

Cash generation continues to be strong across the Group with £105.0m of
operating cash flow generated in the year. After interest, tax and dividends,
this gave free cash flow of £63.5m.

The major acquisition in the year was Best Software, Inc., for a gross cash
consideration of £284.4m including costs. This acquisition was financed
through a vendor placing of 43,707,488 new ordinary shares, which raised £
289.7m after costs. Ubiquis SA was acquired for a consideration of £20.6m
satisfied by the issue of 2,529,847 new ordinary shares. Other acquisitions
were completed in the period for a cash cost of £54.3m. Acquired businesses
held £8.3m of cash and £31.5m of short term deposits upon acquisition. After
net capital expenditure of £17.4m and other movements of £0.6m, net debt stood
at £20.8m at 30 September 2000 (30 September 1999: £58.3m).

Operational review

In the UK, Sage Software Limited has shown robust growth. The strength of the
Sage brand, the breadth of our product portfolio and the size of our reseller
channel have enabled us to continue to distance ourselves from the
competition. We have also expanded our portfolio of products targeted at the
accountants' community. Accountants play an important role in recommending,
and increasingly reselling Sage products and we continue to focus our
attention on strengthening our relationships with accountants in practice.
Virtually all of the top 5,000 firms of accountants in the UK use one or more
Sage products.

Recent product upgrades in the UK allow existing and new customers to engage
in e-commerce activity directly from their desktop, bringing the benefits of
connectivity without the need to restructure existing systems. The UK business
has also released SiteCreator, the chargeable entry level website creation
tool, WebTrader, our entry level e-commerce tool, and other e-business
products. Customer reaction has been positive with over 70,000 businesses in
the UK asking us to register domain names and reserve webspace in anticipation
of establishing a web presence. Over 3,000 have built websites and
approximately 400 of these have a trading presence.

We have made considerable progress with Sage Enterprise Solutions in its first
full year in the Group. The business is now focused on serving the needs of
SMEs with revenues of between £5m and £250m. Distribution is via the value
added reseller channel which has been expanded significantly over the past
year. The previous emphasis on selling very high end solutions to very large
corporates using a direct sales force and a large professional services team
has been reduced significantly with the consequence that revenues have been
impacted adversely by some £5m. It should be noted, however, that this part of
Sage Enterprise Solutions' business was loss-making. By concentrating on more
profitable revenue via the value added reseller channel, we have been able to
increase margins substantially to 22% (1999: 8%). Our product offering has
also been simplified making it easier for those of our customers requiring an
enhanced solution to upgrade to the Sage Enterprise product suite.

Our focus for the year in Mainland Europe has been on developing a broader
range of products and services, including e-business solutions, and on
expanding our installed base business.

In France, where we have greater exposure to the mid-market, second half
revenues declined in comparison to the first half. The first half did,
however, benefit from a strong first quarter due to the Y2K effect. Our
response to these difficult market conditions was to focus even more attention
on our installed base activities, particularly support contracts which now
number 231,000 (1999: 200,000). Installed base revenues have grown year on
year by 29% and there are further opportunities to sell our broad range of
installed base products and services into this customer base. One such
opportunity comes with the recent launch of eCommerce 100 incorporating
technology acquired as part of the Ubiquis acquisition in March 2000.

Our efforts in recent years have transformed our German business. A stable,
improved reseller channel and a focus on selling additional products and
services to our growing customer base have returned this business to
profitability. We expect the performance of our German business to continue on
this positive trend.

In the US, Ron Verni (formerly CEO of Peachtree) was appointed CEO of our US
group of businesses. Following the acquisition of Best, we now have three
substantial businesses in the US. Ron and his management team will focus their
efforts on continuing to integrate the activities of our US businesses and to
maximise the opportunities to cross-sell our various products and services to
what is now a substantial installed base.

We have made significant progress at Peachtree in its first full year of
ownership. Operating margins have improved to 14% (1999: 5%) as a result of a
strong focus on installed base activities and a simplified product offering.

The trading environment in the mid-market in the US, as in France, was
difficult, particularly in the second half. This had an impact on revenues at
Sage Software, Inc. who, in response, focused even greater attention on
selling additional products and services to the installed base. Sage Software,
Inc., and Peachtree are working closely together to encourage large Peachtree
customers to upgrade to Sage Software, Inc.'s more sophisticated product
offerings.

Best is now focused on marketing its core fixed asset, payroll and HR software
products through our expanded US value added reseller channel. Clearly there
are significant opportunities to sell Best's range of speciality products to
our substantial US customer base.

People

We have made a number of key appointments to our management team during the
year. Paul Harrison joined the Board as Finance Director on 1 April 2000
having previously been Group Financial Controller. Ron Verni, as mentioned
above, was appointed CEO of our US businesses and Peter Dewald joined Sage as
CEO of our German business. Prior to joining Sage, Peter was CEO of Apple
Germany.

Our 5,000 employees worldwide met the challenges of a demanding year and we
would like to thank them for their considerable efforts.

Outlook

Our business has ever increasing geographical spread and scale. Our product
portfolio continues to grow both by acquisition and through investment in
e-business solutions. This provides further opportunities not only to attract
new customers but also to apply our installed base marketing expertise to grow
recurring revenues. We are well placed as market leader to continue to
consolidate the SME business management software market, and our ability to
add value to acquisitions is a further driver of profitable growth.

The new year has started well for our entry level businesses, whilst in the
mid-market some uncertainty still remains. Yet even in the mid-market lead
generation is strong and the reseller channel reports high levels of new
business activity. However, the time taken to convert leads is still taking
longer than normal.

Our installed base business goes from strength to strength, and we will be
paying particular attention this year to the opportunity to encourage an
increasing number of our customers to upgrade to more sophisticated solutions
from Sage. In the US, we have programmes in place to migrate elements of the
Peachtree base to Sage Software, Inc.'s MAS90 product range, in France we plan
to migrate a proportion of our Ciel customer base to the Sage France product
range, and in the UK we are actively encouraging appropriate Line 50 and Line
100 customers to upgrade to Sage Enterprise. In addition to this activity we
have programmes in place to cross-sell all of our products and services to our
ever increasing installed base of active and loyal customers.

Despite the challenging market environment, the Board is confident about the
prospects for the current year.

Michael Jackson

Chairman



CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the year ended 30 September 2000
                                     Continuing operations       2000      1999
                                              Acquisitions      Total     Total
                                   (unaudited)  (unaudited)(unaudited)(audited)
                                        £'000        £'000      £'000     £'000

Turnover                              368,370       43,783    412,153   307,041

Cost of sales                        (34,379)      (8,687)   (43,066)  (32,393)

Gross profit                          333,991       35,096    369,087   274,648

Selling and administrative          (227,206)     (29,999)  (257,205) (194,710)
expenses

Operating profit                      106,785        5,097    111,882    79,938

Interest receivable                                             3,139     2,195
Interest payable and similar                                  (6,273)   (7,820)
charges

Profit on ordinary activities before taxation                 108,748    74,313

Taxation on profit on ordinary activities                    (34,799)  (23,780)

Profit on ordinary activities after taxation                   73,949    50,533
Equity minority interest                                           71      (74)
Profit for the financial year                                  74,020    50,459

Equity dividends                                              (4,898)   (4,280)
Amount transferred to reserves                                 69,122    46,179

Earnings per share (pence) -                                    5.92p     4.22p
basic

Net dividend per share (pence)                                 0.386p    0.351p



CONSOLIDATED BALANCE SHEET

As at 30 September 2000
                                                                2000       1999

                                                         (unaudited)  (audited)

                                                               £'000      £'000
Fixed assets
Intangible assets                                            540,422    186,319
Tangible assets                                               46,504     36,728
                                                             586,926    223,047
Current assets
Stocks                                                         2,489      2,254
Debtors                                                       85,369     54,214
Cash at bank and in hand                                      66,417     31,589
                                                             154,275     88,057

Creditors: amounts falling due within one year             (110,178)   (85,620)

Net current assets                                            44,097      2,437

Total assets less current liabilities                        631,023    225,484

Creditors: amounts falling due after more than one year     (78,472)   (86,947)

Deferred income                                             (98,066)   (63,194)
Equity minority interest                                        (94)      (165)

                                                             454,391     75,178
Capital and reserves
Called up equity share capital                                12,680      1,219
Share premium account                                        432,690    152,297
Merger reserve                                                61,111     40,545
Profit and loss account                                     (52,090)  (118,883)

Equity shareholders' funds                                   454,391     75,178

CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

For the year ended 30 September 2000
                                                                 2000     1999

                                                           (unaudited)(audited)

                                                                £'000    £'000

Profit for the financial year                                   74,020   50,459
Translation of foreign currency net investments and related    (2,963)  (1,034)
borrowings
Total recognised gains and losses relating to the year          71,057   49,425





CONSOLIDATED CASH FLOW STATEMENT

For the year ended 30 September 2000
                                                                 2000     1999

                                                           (unaudited)(audited)

                                                                £'000    £'000

Net cash inflow from operating activities                      104,998  110,897

Returns on investments and servicing of finance

Interest received                                                3,029    2,195

Interest paid                                                  (5,531)  (7,571)

Issue cost of loans                                                  -    (384)

Interest element of finance lease rental payments                (261)    (529)

Net cash outflow from returns on investments and               (2,763)  (6,289)
servicing of finance

Taxation

Corporation tax paid                                          (34,266) (17,509)

Capital expenditure

Payments to acquire tangible fixed assets                     (17,786) (10,413)

Receipts from sales of tangible fixed assets                       389      312

Net cash outflow from capital expenditure                     (17,397) (10,101)

Acquisitions and disposals

Purchase of subsidiary undertakings:

Net cash consideration - current year acquisitions          (329,756) (134,144)
- prior year acquisitions                                       (672)     (835)

Net cash outflow from acquisitions and disposals            (330,428) (134,979)

Equity dividends paid                                          (4,490)  (3,898)

Cash outflow before financing and management of liquid       (284,346) (61,879)
resources

Management of liquid resources

Decrease/(increase) in short term deposits                      29,785  (7,948)

Financing
Shares issued                                                  298,450   67,406
Share issue costs                                              (7,614)    (703)
Movement in loan funding                                         2,464  (8,350)
Repayment of capital element of finance leases                 (5,271)    (417)

Net cash inflow from financing                                 288,029   57,936

Increase/(decrease) in cash in the year                         33,468 (11,891)

NOTES

 1. Geographical analysis

                                 2000                          1999
                      Turnover    Operating profit   Turnover  Operating profit
                    (unaudited)        (unaudited)   (audited)       (audited)
                         £'000              £'000       £'000           £'000

UK                     132,124             54,965      99,178          39,606
France                  71,497             20,631      66,847          17,962
Germany                 22,197              2,313      18,793          (1,641)
US                     142,552             28,876     118,016          23,275
                       368,370            106,785     302,834          79,202
Impact of foreign            -                  -       4,207             736
exchange*

Acquisitions - US       39,385              5,413           -               -

Acquisitions -           4,398               (316)          -               -
Switzerland
                       412,153            111,882     307,041          79,938


*   Foreign currency results for the year ended 30 September 1999 have been     
   retranslated at current year exchange rates to facilitate the comparison of  
  results.


2.  Analysis of change in net debt (inclusive of finance leases)

                        At 1    Cash Acquisitions Other   Exchange        At 30
                     October    flow                      movement    September
                        1999                                               2000
                       £'000   £'000        £'000 £'000      £'000        £'000

Net cash at bank      21,357  23,878        8,322     -      1,268       54,825
and in hand
Short term             7,948 (29,785)      31,481     -      1,546       11,190
deposits
Debt                 (87,560)  2,807         (517)  225     (1,757)    (86,802)
                     (58,255) (3,100)      39,286   225      1,057     (20,787)



3.  Taxation

    The taxation charge for the year comprises:

                                                         2000              1999

                                                        £'000             £'000

UK taxation                                            18,433            12,106
Overseas taxation                                      16,366            11,674
                                                       34,799            23,780



4. The unaudited financial information set out above does not constitute the
   Company's statutory accounts for the year ended 30 September 2000.
   Statutory accounts to 30 September 1999 have been delivered to the
   Registrar of Companies and those to 30 September 2000 will be delivered in
   due course. The Group's results for the year ended 30 September 1999 have
   been extracted from those statutory accounts. The Auditors' Report on the
   accounts to 30 September 1999 was unqualified and did not contain a
   statement under Section 237 of the Companies Act 1985.

5. The calculation of earnings per share is based on earnings of £74.0m (1999:
   £50.5m) and on 1,250,052,239 ordinary 1p shares (1999: 1,194,676,630)
   being the weighted average number of shares in issue during the year.


6. Subject to shareholders' approval, the final dividend of 0.256 pence per
   share will be paid on 7 March 2001 to shareholders on the register at the
   close of business on 9 February 2001.


7. The annual report and accounts will be posted to shareholders shortly and
   thereafter copies will be available from the Secretary, The Sage Group
   plc, Sage House, Benton Park Road, Newcastle upon Tyne, NE7 7LZ.