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Sage boosts profit but that means NOTHING without the CLOUD
Everyone very embarrassed and upset with stupid old money from software sales
Sales rose 6.5 per cent to £699m during accounts-ware biz Sage's half-year results, despite the company's poor cloudy progress.
Pre-tax profits increased 4.9 per cent to £173m, compared with the first half of its previous financial year.
Stephen Kelly, chief executive officer, said the company is in the process of overhauling its business.
"We have already started making changes to facilitate and underpin our longer-term growth plans."
He added: "We are at the start of this journey which will take a couple of years to fully implement."
Kelly stepped down as UK government chief operating officer to become chief executive of the accounting software firm in November last year.
Peter Roe, analyst at TechMarketView said Sage's move to cloud has been "disappointing and tardy", with its cloud-based competitors such as Xero and NetSuite prowling into its territory.
Software subscription rose 29 per cent for the first six months. However, this reflects a move to a subscription model across its portfolio rather than just cloud products, said Roe.
He added that Kelly is yet to reveal his long term plans for the company, which are expected to be unveiled in June.
"The group still looks like a miscellany of individual regional operations each with their own portfolio and approaches," said Roe.
"Most of them did fairly well in H1, boosted by the push towards subscription revenue, but there was a fairly common theme of weaker performance in the SME market," he said. ®