Excellent results - the transformation to a Cloud based SasS business is now clear to anyone that cares to look. The share price has run-up in advance but it looks like these results are good enough to justify the valuation. Against a pretty grim market back drop it's very pleasing to see the performance @SGE is achieving.
Highlights
>> Underlying recurring revenue increased by 12% to £2,096m;
>> Margin increasing by 140 bps to 20.9% (constant currency);
>> Underlying basic EPS increased by 22% to 32.3p;
>> Cash conversion of 116%;
>> Final dividend of 12.75p, increasing the full year dividend by 5% to 19.3p;
>> Share buyback programme of up to £350m announced.
SGE have a clear winner with SGE Intacct and are aggressively rolling out geographically as well as investing in developing tailored versions for specific market verticals - for manufacturing, construction etc.
The successful transformation to a SaaS business is clear in the metrics:
>> Renewal rate by value of 102% (FY22: 101%), ahead of last year driven by more sales to existing customers and retention.
>> Sage Business Cloud penetration of 84% (FY22: 75%);
>> Subscription penetration of 79% (FY22: 75%).
Really good to see this strong underpinning that is hugely attractive.
With high quality revenue; evident pricing power; growing operating margins; generating surplus cash and growth from new customer acquisition - these are very impressive results.
Good results but now on PE of 37. With so many quality shares at low ratings at present , you seem more likely to get better returns else where.
