Sage will continue to maintain the dividend in real terms going forward and the FY19 full year dividend has increased by 2.5% to 16.91p.
Other financial highlights include:
- Organic total revenue (excluding Sage Pay and Brazil, now held for sale) delivered growth of 5.6% to £1,822m, reflecting growth in recurring revenue of 10.8% to £1,559m, underpinned by software subscription revenue growth of 29.4% to £1,004m, offset by a 17.9% decline in SSRS revenue to £255m and a 3.0% decline in processing revenue to £8m;
- Including the impact of Sage Pay and Brazil, the business delivered total revenue growth of 5.2% to £1,915m, recurring revenue growth of 10.7% to £1,611m, software subscription revenue growth of 28.1% to £1,041m, offset by an 18.8% decline in SSRS revenue to £260m and slight decline in processing revenue of 0.5% to £45m;
- Strong growth in recurring revenue of 10.8% and ARR growth of 12.6% reflects the continued focus on attracting new customers and migrating existing customers to subscription and the cloud. Particular strength in recurring revenue growth in Northern Europe and North America at 16% and 12% respectively, and in the Future Sage Business Cloud Opportunity at 13%;
- Decline in SSRS reflects the on-going transition to subscription revenue and a strong SSRS comparator in the prior year;
- Organic operating profit of £432m, a margin of 23.7% (£448m, margin of 23.4% including Sage Pay and Brazil), down from 28.8% in FY18, reflects the increased investment to accelerate strategic execution, combined with increased colleague variable compensation in line with strong business performance and the commitment to colleague success;
- Non-recurring gain of £28m, largely reflecting the disposal of US Payroll Processing, offset by non-recurring charges for property restructuring costs of £28m and £14m for the impairment of the Brazilian asset held for sale;
- Underlying cash conversion of 129%, reflecting an improvement in trade receivables and lower levels of FY18 bonus payout in FY19. Free cash flow of £443m and net debt to EBITDA ratio of 0.8x;
- Capital return of £250m today announced, reflecting the expected proceeds from Sage Pay and strong cashgeneration. Further details to be announced on completion of disposal of Sage Pay.
