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Sage Share Price Falls Sharply on Profit Warning

Sage
Nigel F

Shares of Sage Group PLC (LON: SGE) fell more than 13% on Friday after warning that high cloud investments are likely to drag on the company’s profit margins.

The developer said it generated £1.77 billion in sales for its full-year ending September 30, which is 3.7% higher compared to a year ago. Organic revenue recorded a growth of 8.5% while operating profit fell 3.7% to £391 million.

A final dividend of 11.32p is confirmed after a rise in profits.

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However, shares fell sharply after the developer said it plans to increase investments in its cloud business. This is likely to drag on the profit margin and remove £60 million from annual earnings.

“We think it’s important we continue to invest through this cycle,” CEO Steve Hare said.

The company remains cautious as far as the forward-looking guidance is concerned.

“We’re just a bit cautious in the short term, which is why we are guiding to 3-5% recurring revenue growth (this year),” added Hare.

Sage share price falls sharply on a profit warning November 2020

Sage share price fell more than 13% to trade below the 600p mark for the first time since April.

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Nigel F
Nigel F
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Nigels tiefes Verständnis der Finanzmärkte basiert auf über 10 Jahren Erfahrung. Nigel wurde bisher zweimal von der FCA (Financial Conduct Authority) autorisiert und hat in der letzten Zeit eine Finanz-Brokerage Firma besessen und verkauft. Er liefert hochaktuelle Analysen und Einsichten in die Finanzmärkte und in die allgemeine Wirtschafts- und Währungspolitik des Vereinigten Königreichs, der USA, Europas und Asiens.