The Sage Group
plc
Results for the six months
to 31 March 2024 (unaudited)
16 May
2024
Strong performance driven by innovation
Steve Hare, Chief Executive Officer,
commented:
"Sage performed well in the first
half of the year, delivering broad-based revenue growth and
significant margin expansion. Demand for our solutions remains
robust, with small and mid-sized businesses continuing to trust
Sage to automate their accounting, HR and payroll
workflows.
"We are resolutely focused on
innovation, as both a source of near-term competitive advantage and
a foundation for our long-term success. We continue to introduce
new AI-powered products and services that deliver enhanced
productivity and insights, driving value for both existing and new
customers.
"As we look forward, despite the
ongoing macroeconomic uncertainty, I am confident that Sage's
proven strategy, underpinned by continued investment, will enable
us to deliver further efficient growth."
Underlying Financial APMs[1]
|
H1 24
|
H1 23[2]
|
Change
|
Organic
Change
|
Annualised Recurring Revenue
(ARR)
|
£2,253m
|
£2,034m
|
+11%
|
+11%
|
Underlying Total
Revenue
|
£1,152m
|
£1,052m
|
+10%
|
+9%
|
Underlying Operating
Profit
|
£254m
|
£215m
|
+18%
|
+18%
|
% Operating Profit
Margin
|
22.0%
|
20.4%
|
+1.6 ppts
|
+1.6 ppts
|
EBITDA
|
£299m
|
£262m
|
+14%
|
|
% EBITDA Margin
|
25.9%
|
24.9%
|
+1.0 ppts
|
|
Underlying Basic EPS
(p)
|
18.2p
|
14.8p
|
+23%
|
|
Underlying Cash
Conversion
|
127%
|
117%
|
+10
ppts
|
|
Statutory Measures
|
H1 24
|
H1 23
|
Change
|
|
Revenue
|
£1,152m
|
£1,087m
|
+6%
|
|
Operating Profit
|
£215m
|
£157m
|
+38%
|
|
% Operating Profit
Margin
|
18.7%
|
14.4%
|
+4.3 ppts
|
|
Basic EPS (p)
|
15.3p
|
9.8p
|
+57%
|
|
Dividend Per Share (p)
|
6.95p
|
6.55p
|
+6%
|
|
Please note that
tables may not cast and change percentages may not calculate
precisely due to rounding.
Financial highlights
·
Underlying total revenue increased by 10% to
£1,152m, reflecting continued robust demand for our solutions and
services.
·
Underlying operating profit increased by 18% to
£254m, with margin increasing by 160 basis points to 22.0% driven
by operating efficiencies as we scale the business.
·
EBITDA increased by 14% to £299m, with margin
increasing by 100 basis points to 25.9%.
·
Statutory operating profit increased by 38% to
£215m reflecting growth in underlying operating profit together
with lower restructuring and M&A-related charges.
·
Underlying basic EPS increased by 23% to
18.2p.
·
Strong underlying cash conversion of 127%,
reflecting continued growth in subscription revenue and good
working capital management.
·
Robust balance sheet, with £1.1bn of cash and
available liquidity, and net debt to EBITDA of 1.4x.
·
Interim dividend up 6% to 6.95p, in line with our
progressive policy.
Strategic and operational highlights
·
Underlying annualised recurring revenue (ARR) up
11% to £2,253m, reflecting growth across all regions balanced
between new and existing customers.
·
Renewal rate by value of 102%, ahead of last year
(H1 23: 101%), reflecting increased sales to existing customers and
continued good retention rates.
·
Sage Business Cloud revenue increased by 18% to
£915m (H1 23: £777m), including cloud native revenue growth of 25%
to £353m (H1 23: £283m).
·
Subscription penetration increased to 81% (H1 23:
79%) driven by growth in subscription revenue of 14% to £937m (H1
23: £826m).
·
Strong strategic progress as we further expand
our global cloud solutions across the Group and deepen our
vertical-specific capabilities, complemented by the acquisition of
Bridgetown Software.
·
We continue to scale the Sage Network to power
innovative features and services, including the recent introduction
of Sage Copilot, our generative AI-powered digital
assistant.
Outlook
Looking ahead, we expect organic
total revenue growth for full year FY24 to
be broadly in line with the first half. We
continue to expect operating margins to trend upwards in FY24 and
beyond, as we focus on efficiently scaling the
Group.
About Sage
Sage exists to knock down barriers
so everyone can thrive, starting with the millions of small and
mid-sized businesses (SMBs) served by us, our partners and
accountants. Customers trust our finance, HR and payroll software
to make work and money flow. By digitising business processes and
relationships with customers, suppliers, employees, banks and
governments, our digital network connects SMBs, removing friction
and delivering insights. Knocking down barriers also means we use
our time, technology and experience to tackle digital inequality,
economic inequality and the climate crisis.
Enquiries:
|
Sage:
|
+44 (0) 7341 479956
|
FGS Global:
|
+44 (0) 20 7251 3801
|
|
James Sandford, Investor
Relations
|
Conor McClafferty
|
|
David Ginivan, Corporate PR
|
Sophia Johnston
|
A presentation for investors and analysts will be held at
8.30am UK time. The webcast can be accessed via sage.com/investors
or directly via the following link:
https://edge.media-server.com/mmc/p/qbfs84ws.
To join the conference call, please register via
https://register.vevent.com/register/BI638ccf3d921a442e9fb8c03003087535
Business Review
Sage delivered strong, broad-based
revenue growth in the first half of FY24, together with continued
margin expansion, significant growth in earnings per share, and
robust cash flows. This performance was driven by continued
progress against our strategic priorities, our breadth and
diversity, and the resilience of our business model.
Overview of results
The Group increased underlying
total revenue by 10% to £1,152m (H1 23: £1,052m), with all our
regional markets contributing to growth. In North America, revenue
grew by 13%, with a good performance from Sage Intacct supported by
Sage 50 cloud and Sage 200 cloud. In the UKIA[3] region, revenue increased by 8% driven by cloud
solutions for small businesses together with Sage Intacct. In
Europe, revenue increased by 6%, with growth across our accounting,
HR and payroll solutions.
Throughout the Group, our
principal focus is to grow Sage Business Cloud, comprising our
cloud native[4] and cloud connected[5] solutions, by attracting new customers and
delivering further value to existing customers. Sage Business Cloud
solutions enable customers to benefit from a range of cloud
services as part of the Sage Network, leading to deeper customer
relationships and higher lifetime values.
As a result, Sage Business Cloud
total revenue increased by 18% to £915m (H1 23: £777m), driven by
growth in cloud native revenue of 25% to £353m (H1 23: £283m)
primarily through new customer acquisition, and by growth in cloud
connected revenue from both existing and new customers.
Underlying recurring revenue
increased by 11% to £1,112m (H1 23: £1,005m), with software
subscription revenue up by 14% to £937m (H1 23: £826m) leading to
subscription penetration of 81% (H1 23: 79%). As a result of the
evolving business mix, 97% of the Group's revenue is now
recurring.
On an organic basis, total revenue
grew by 9% to £1,152m (H1 23: £1,053m), while recurring revenue
increased by 11% to £1,112m (H1 23: £1,006m).
ARR growth
Sage's underlying ARR increased by
11% to £2,253m (H1 23: £2,034m), reflecting strong growth balanced
between new and existing customers. Organic ARR also increased by
11% to £2,253m (H1 23: £2,036m).
Renewal rate by value of 102% (H1
23: 101%) is ahead of last year reflecting good retention rates and
strong sales to existing customers, including a good performance in
customer add-ons and targeted price rises. In total, Sage has
added £190m of ARR through new customer acquisition on an organic
basis over the last 12 months, up from £180m[6] a year earlier.
Performance by region
North America
|
H1 24
|
H1 23
|
Change
|
Organic
change
|
US
|
£454m
|
£400m
|
14%
|
13%
|
Canada
|
£66m
|
£60m
|
10%
|
10%
|
Underlying total revenue
|
£520m
|
£460m
|
13%
|
13%
|
In North America, underlying total
revenue increased by 13% to £520m, with broad-based growth across
Sage's key accounting solutions, particularly among mid-sized
businesses. Recurring revenue grew by 14% to £506m (H1 23: £445m),
while subscription penetration increased to 80%, up from 77% in the
prior period.
In the US, total revenue increased
by 14% to £454m, with growth moderating slightly compared to the
prior year. Sage Intacct, which now represents over 40% of US
revenue, grew by 27% to £186m (H1 23: £147m). Growth was strong
across multiple verticals, particularly not-for-profit and
construction & real estate, with the latter benefitting from
the recent launch of the Sage Construction Management
suite.
Revenue growth in the US was also
driven by Sage 200 cloud, Sage 50 cloud and Sage X3, reflecting
good levels of upsell to existing customers and higher pricing,
together with growth from new customers.
In Canada, total revenue grew by
10% to £66m, driven mainly by Sage 50 cloud which saw strong
renewals and increased new customer acquisition, together with
growth in Sage 200 cloud. Sage Intacct also grew strongly off a
small base, as we continue to expand Sage Intacct's geographical
reach beyond the US.
UKIA
|
H1 24
|
H1 23
|
Change
|
Organic
change
|
UK & Ireland
|
£249m
|
£233m
|
7%
|
7%
|
Africa & APAC
|
£79m
|
£71m
|
12%
|
12%
|
Underlying total revenue
|
£328m
|
£304m
|
8%
|
8%
|
In the UKIA region, underlying
total revenue increased by 8% to £328m, with continuing strength
across the portfolio including accounting, HR and payroll
solutions. Recurring revenue also grew by 8% to £321m (H1 23:
£296m), while subscription penetration was 89%, in line with the
prior period.
In the UK & Ireland, total
revenue grew by 7% to £249m. Sage Intacct made a significant
contribution, benefitting from strong new customer wins,
particularly through the partner channel, and momentum continued to
strengthen throughout the first half.
Alongside Sage Intacct, Sage's
cloud native solutions for small businesses, including Sage
Accounting, Sage Payroll and Sage HR delivered good levels of
growth, mainly through new customer acquisition. Revenue was
also driven by growth in accountancy practice management tools,
supported by the continued adoption of Sage for
Accountants.
In addition, Sage 50 cloud and
Sage 200 cloud continued to perform well, with growth driven mainly
by existing customers through good levels of upsell and higher
pricing.
In Africa and APAC, total revenue
grew by 12% to £79m, with strong growth in Sage Accounting, Sage
Payroll and Sage HR driven by good levels of new customer
acquisition, while Sage Intacct also performed well, off a small
base. In addition, local products within the Sage 200 cloud and
Sage 50 cloud franchises continued to contribute to
growth.
Europe
|
H1 24
|
H1 23
|
Change
|
Organic
Change
|
France
|
£154m
|
£146m
|
5%
|
5%
|
Central Europe
|
£74m
|
£70m
|
6%
|
6%
|
Iberia
|
£76m
|
£72m
|
6%
|
6%
|
Underlying total revenue
|
£304m
|
£288m
|
6%
|
6%
|
Europe achieved underlying total
revenue growth of 6% to £304m, reflecting a strong performance
particularly in Sage 200 cloud, Sage 50 cloud, HR and payroll
solutions. Recurring revenue grew by 8% to £285m (H1 23: £264m),
while subscription penetration grew to 75%, up from 69% in the
prior period.
In France, total revenue grew by
5% to £154m driven by accounting solutions. Sage 200 cloud was a
significant contributor to growth, as was Sage X3 which continued
to benefit from strong demand. Solutions for accountants performed
well, driven by accelerated upsell of add-ons. Payroll solutions
also contributed to growth within the region.
Central Europe achieved a total
revenue increase of 6% to £74m. Cloud HR and payroll solutions,
which represent around half of Central Europe's revenue, grew
particularly strongly, driven by upsell to existing customers
together with new customer wins. Growth in Central Europe was also
driven by Sage 200 cloud, mainly through growth in sales to
existing customers.
In Iberia, total revenue grew by
6% to £76m, reflecting strength across Sage 200 cloud and Sage 50
cloud, driven by renewals, higher pricing and new customers. Growth
was further driven by continued demand for HR and payroll solutions
for both small and mid-sized businesses. Iberia also achieved good
levels of growth from accountants, complemented by the recent
launch of Sage for Accountants
in Spain.
Progress towards our strategic priorities
Sage focuses on five strategic
priorities that help us create long-term value for our
stakeholders, as part of our strategic framework for growth. Our
progress towards these priorities is outlined below.
·
Scale Sage
Intacct: We continue to scale Sage
Intacct by enhancing its core functionality, deepening its
vertical-specific capabilities (with particular progress in
non-profit, construction and healthcare) and expanding its
geographical reach. Having focused initially on establishing Sage
Intacct in our English-speaking markets, we launched the solution
in France last year, where traction is now starting to build, and
have now also introduced it in Germany. Reflecting this progress,
Sage Intacct's ARR grew by around a quarter in the US, and by two
thirds outside the US, compared to the prior year.
·
Expand medium
beyond financials:
We aim to deliver benefits for mid-sized
businesses beyond core accounting, including by increasingly
focusing our customer proposition on integrated solution suites
rather than discrete products. We recently launched Sage
Construction Management in North America, adding preconstruction
and project management capabilities to our popular construction
suite, while Sage Distribution and Manufacturing Operations (SDMO)
continues to gain early traction across our markets.
·
Build the small
business engine: Our small business
solutions continue to drive growth in key markets. In the UK we
have launched Sage for Small Business, a fully integrated suite
which brings together the capabilities of Sage Accounting, Sage
Payroll and Sage HR into a single solution with simplified pricing.
We continue to make progress with accountants, with Sage for
Accountants now adopted by over 12,000 practices in the UK, up from
5,000 a year ago. We have also launched Sage for Accountants in
Canada, and refreshed our accountant proposition in France, Spain
and South Africa.
·
Scale the
network: The Sage Network is our
platform of products and services that connects business ecosystems
and digitally transforms customer workflows. We drive network
participation by expanding connected services, such as accounts
payable automation, which continues to scale rapidly. In April we
introduced an early adopter programme for Sage Copilot, our
generative AI-powered digital assistant, which automates key tasks
and provides business insights through natural language
interaction. Initially launched to Sage Accounting customers in the
UK, we intend to expand Sage Copilot to customers of both cloud
native and cloud connected solutions over time.
·
Learn and
disrupt: We continue to invest in
disruptive technologies to drive innovation and enhance our
products. During the first half, we expanded our partnership
with Amazon Web Services (AWS) to include developing a
domain-specific large language model (LLM) for accounting and
compliance, which will serve as a robust foundation for future
generative AI-based accounting applications. We will also
make Sage Earth, our carbon accounting solution, available through
the AWS marketplace.
Sustainability and Society
Through our Sustainability and
Society strategy, we aim to support sustainable and inclusive
economic growth so everyone can thrive. Sage has an ESG
rating of 'AAA' from MSCI and a Climate Change score of
'A-' from CDP.
Sage is committed to achieving net
zero carbon emissions by 2040, and supports SMBs in their own
climate action initiatives. In November we published our net zero
transition plan including measures to achieve our SBTi-validated
interim target of halving emissions by 2030. We also aim to make
technology more inclusive and responsible, innovating to empower
SMBs and using data to create a positive social impact. Through
Sage Foundation, colleagues, their families and our partners
dedicated more than 63,000 volunteering hours to their communities
during the first half.
Sage also fosters a
high-performance culture among colleagues, based on accountability
and inclusivity. We seek to embed Diversity, Equity and
Inclusion (DEI) into everyday business processes and decisions, to
drive diversity of thought. Currently 39% of leadership teams
meet our FY26 gender diversity target[7], up
from 34% at the end of FY23.
Financial Review
The financial review provides a summary of the Group's results
on a statutory and underlying
basis, alongside its organic performance. Underlying
measures allow management and investors to understand the Group's
financial performance adjusted for the
impact of foreign exchange movements and recurring and
non-recurring items, while organic measures also adjust for the
impact of acquisitions and disposals[8].
Statutory and underlying financial results
Financial results
|
Statutory
|
Underlying
|
H1 24
|
H1 23
|
Change
|
H1 24
|
H1 23
|
Change
|
North America
|
£520m
|
£483m
|
+8%
|
£520m
|
£460m
|
+13%
|
UKIA
|
£328m
|
£311m
|
+5%
|
£328m
|
£304m
|
+8%
|
Europe
|
£304m
|
£293m
|
+4%
|
£304m
|
£288m
|
+6%
|
Total revenue
|
£1,152m
|
£1,087m
|
+6%
|
£1,152m
|
£1,052m
|
+10%
|
Operating profit
|
£215m
|
£157m
|
+38%
|
£254m
|
£215m
|
+18%
|
% Operating profit margin
|
18.7%
|
14.4%
|
+4.3
ppts
|
22.0%
|
20.4%
|
+1.6
ppts
|
Profit before tax
|
£203m
|
£139m
|
+47%
|
£242m
|
£198m
|
+22%
|
Profit after tax
|
£156m
|
£100m
|
+56%
|
£186m
|
£151m
|
+23%
|
Basic EPS
|
15.3p
|
9.8p
|
+57%
|
18.2p
|
14.8p
|
+23%
|
The Group achieved statutory and
underlying total revenue of £1,152m in H1 24. Statutory total
revenue increased by 6% compared to the prior year, reflecting
underlying total revenue growth of 10%, partly offset by a
4-percentage point foreign exchange headwind, particularly in North
America.
Statutory operating profit
increased by 38% to £215m, reflecting an 18% increase in underlying
operating profit to £254m, together with a £31m decrease in
recurring and non-recurring items[9], mainly
relating to non-recurring property restructuring charges in the
prior period and lower M&A-related charges.
Statutory basic EPS increased by
57% to 15.3p, reflecting higher statutory operating profit, lower
statutory net finance costs and the post-tax impact of recurring
and non-recurring items. Underlying basic EPS increased by 23% to
18.2p, primarily reflecting higher underlying operating profit and
lower underlying net finance costs.
Revenue - underlying and organic reconciliation to
statutory
Total revenue bridge
|
H1 24
|
H1 23
|
Change
|
Statutory
|
£1,152m
|
£1,087m
|
+6%
|
Recurring items
|
-
|
-
|
|
Impact of FX
|
-
|
(£35m)
|
|
Underlying
|
£1,152m
|
£1,052m
|
+10%
|
Disposals
|
-
|
-
|
|
Acquisitions
|
-
|
£1m
|
|
Organic
|
£1,152m
|
£1,053m
|
+9%
|
Statutory, underlying and organic
total revenue was £1,152m in H1 24. Underlying revenue in H1 23 of
£1,052m reflects statutory revenue of £1,087m retranslated at
current year exchange rates, resulting in a foreign exchange
headwind of £35m. Organic revenue in H1 23 of £1,053m
reflects underlying revenue of £1,052m, adjusted for £1m of revenue
from Corecon which was acquired during FY23.
Operating profit
The Group increased underlying and
organic operating profit by 18% to £254m (H1 23: £215m). Underlying
and organic operating margin increased by 160 basis points to 22.0%
(H1 23: 20.4%), driven by operating efficiencies as we scale the
business.
Operating profit - underlying and organic reconciliation to
statutory
Operating profit bridge
|
H1 24
|
H1 23
|
|
Operating
profit
|
Operating
margin
|
Operating
profit
|
Operating
margin
|
Statutory
|
£215m
|
18.7%
|
£157m
|
14.4%
|
Recurring items[10]
|
£43m
|
-
|
£50m
|
-
|
Non-recurring items:
|
|
|
|
|
· Reversal of
employee-related costs
|
(£3m)
|
-
|
-
|
-
|
· Reversal of restructuring
costs
|
(£1m)
|
-
|
-
|
-
|
· Property
restructuring
|
-
|
-
|
£20m
|
-
|
Impact of FX
|
-
|
-
|
(£12m)
|
-
|
Underlying
|
£254m
|
22.0%
|
£215m
|
20.4%
|
Disposals
|
-
|
-
|
-
|
-
|
Acquisitions
|
-
|
-
|
-
|
-
|
Organic
|
£254m
|
22.0%
|
£215m
|
20.4%
|
The Group achieved a statutory
operating profit in H1 24 of £215m (H1 23: £157m). Underlying
operating profit of £254m in H1 24 reflects statutory operating
profit adjusted for recurring and non-recurring items.
Recurring items of £43m (H1 23:
£50m) comprise £26m of amortisation of acquisition-related
intangibles (H1 23: £26m) and £17m of M&A related charges (H1
23: £24m). Non-recurring items in H1 24 comprise a £3m reversal of
employee-related charges for French payroll taxes relating to
previous years and a £1m reversal of restructuring costs.
Non-recurring items in H1 23 comprised property restructuring
charges of £20m.
In addition, the retranslation of
H1 23 operating profit at current year exchange rates has resulted
in an operating profit headwind of £12m. This has led to a 40-basis
point margin headwind from foreign exchange to 20.4% (H1 23
underlying as reported: 20.8%).
EBITDA
EBITDA was £299m (H1 23: £262m)
representing a margin of 25.9%. The increase in EBITDA reflects the
growth in underlying operating profit, together with a £3m
reduction in underlying depreciation and amortisation to £24m (H1
23: £27m) as a result of property restructuring.
|
H1 24
|
H1 23
|
Margin
|
Underlying operating profit
|
£254m
|
£215m
|
22.0%
|
Depreciation &
amortisation
|
£24m
|
£27m
|
|
Share based payments
|
£21m
|
£20m
|
|
EBITDA
|
£299m
|
£262m
|
25.9%
|
Net finance cost
The statutory net finance cost for
the period decreased to £12m (H1 23: £18m), reflecting higher
interest income on deposits, and is in line with the underlying net
finance cost of £12m (H1 23: £17m).
Taxation
The underlying tax expense for H1
24 was £56m (H1 23: £47m), resulting in an underlying tax rate of
23% (H1 23: 24%). The H1 24 underlying tax rate has decreased
due to the benefit of higher tax incentive claims in the UK and
US.
The statutory income tax expense
for H1 24 was £47m (H1 23: £39m), resulting in a statutory tax rate
of 23% (H1 23: 28%). The difference between the underlying
and statutory rate in H1 23 primarily reflects non-deductible
M&A activity-related items.
Earnings per share
|
H1 24
|
H1 23
|
Change
|
Statutory basic EPS
|
15.3p
|
9.8p
|
+57%
|
Recurring items
|
3.2p
|
4.5p
|
|
Non-recurring items
|
(0.3)p
|
1.4p
|
|
Impact of foreign
exchange
|
-
|
(0.9)p
|
|
Underlying basic EPS
|
18.2p
|
14.8p
|
+23%
|
Underlying basic EPS increased by
23% to 18.2p. Statutory basic earnings per share increased by 57%,
reflecting the increase in underlying basic earnings per share
together with the change in post-tax impact of recurring and
non-recurring items, including property restructuring and higher
M&A-related charges in the prior period.
Cash flow
Sage remains highly cash
generative with underlying cash flow from operations of
£322m (H1 23:
£266m), representing underlying cash conversion of 127% (H1 23:
117%). This strong cash
performance reflects further growth in
subscription revenue and continued good
working capital management. Free cash flow
of £240m (H1 23:
£194m) reflects strong underlying cash conversion.
Cash flow APMs
|
H1 24
|
H1 23 (as
reported)
|
Underlying operating
profit
|
£254m
|
£227m
|
Depreciation, amortisation and
non-cash items in profit
|
£23m
|
£27m
|
Share based payments
|
£21m
|
£20m
|
Net changes in working
capital
|
£35m
|
£2m
|
Net capital expenditure
|
(£11m)
|
(£10m)
|
Underlying cash flow from operations
|
£322m
|
£266m
|
Underlying cash conversion
%
|
127%
|
117%
|
|
|
|
Non-recurring cash
items
|
(£4m)
|
(£8m)
|
Net interest paid
|
(£31m)
|
(£28m)
|
Income tax paid
|
(£46m)
|
(£35m)
|
Profit and loss foreign exchange
movements
|
(£1m)
|
(£1m)
|
Free cash flow
|
£240m
|
£194m
|
Statutory reconciliation of cash flow from
operations
|
H1 24
|
H1 23 (as
reported)
|
Statutory cash flow from operations
|
£297m
|
£251m
|
Recurring and non-recurring
items
|
£35m
|
£24m
|
Net capital expenditure
|
(£11m)
|
(£10m)
|
Other adjustments including
foreign exchange translations
|
£1m
|
£1m
|
Underlying cash flow from operations
|
£322m
|
£266m
|
Net debt and liquidity
Group net debt was
£811m at 31 March
2024 (30 September 2023: £561m), comprising cash and cash
equivalents of £448m (30 September 2023: £696m) and total debt of £1,259m (30
September 2023: £1,257m). The Group had
£1,078m of cash and available liquidity at 31 March 2024 (30
September 2023: £1,326m).
The increase in net debt in the
period is summarised in the table below.
|
H1 24
|
H1 23
(as
reported)
|
Net debt at 1 October
|
(£561m)
|
(£733m)
|
Free cash flow
|
£240m
|
£194m
|
New leases less
disposals
|
(£17m)
|
(£9m)
|
Acquisition of
businesses
|
-
|
(£14m)
|
M&A and equity
investments
|
(£36m)
|
(£16m)
|
Dividends paid
|
(£129m)
|
(£123m)
|
Share buyback
|
(£306m)
|
-
|
FX movement and other
|
(£2m)
|
£10m
|
Net debt at 31 March
|
(£811m)
|
(£691m)
|
The Group's debt is sourced from
sterling and euro denominated bond notes, together with a
syndicated multi-currency Revolving Credit Facility
(RCF).
The Group's sterling denominated
bond notes comprise a £400m 12-year bond,
issued in February 2022, with a coupon of
2.875%, and a £350m
10-year bond, with a coupon of 1.625%, issued in February 2021.
Sage's euro denominated bond notes comprise €500m of 5-year
notes, with a coupon of 3.82%, issued in February 2023 as part of
the Group's Euro Medium Term Note (EMTN) programme.
The Group's RCF of £630m expires
in December 2028, with an extension option for a further year
subject to specific provisions. At 31 March 2024, the RCF was
undrawn (H1 23: undrawn).
Sage has an investment grade
issuer credit rating assigned by Standard and Poor's of BBB+
(stable outlook).
Capital allocation
Sage's disciplined capital
allocation policy is focused on accelerating strategic execution
through organic and inorganic investment, and delivering
shareholder returns. During the period, Sage completed the
acquisition of Bridgetown Software, the developer of BidMatrix, a
cloud native bid analysis tool for the construction industry,
helping Sage to expand its customer proposition beyond
financials.
Sage has a progressive dividend
policy, intending to grow the dividend over time while considering
the future capital requirements of the Group. Reflecting the
Group's strong business performance and cash generation during the
first half, we have increased the interim dividend by 6% to 6.95p
per share (H1 23: 6.55p).
The Group also considers returning
surplus capital to shareholders. On 11 April 2024, Sage completed a
share buyback programme, commenced on 22 November 2023, under which
a total of 29.3m shares were purchased for an aggregate
consideration of £345m and subsequently cancelled.
|
H1 24
|
H1 23 (as
reported)
|
Net debt
|
£811m
|
£691m
|
EBITDA (Last Twelve
Months)
|
£576m
|
£520m
|
Net debt/EBITDA Ratio
|
1.4x
|
1.3x
|
The Group's EBITDA over the last
12 months was £576m, resulting in a net debt to EBITDA leverage
ratio of 1.4x, up from 1.3x in the prior year. Sage intends to
operate in a broad range of 1x to 2x net debt to EBITDA over the
medium term, with flexibility to move outside this range as
business needs require.
Group return on capital employed
(ROCE) for H1 24 was 23% (H1 23 as reported: 19%).
Going concern
The Directors have robustly tested
the going concern assumption in preparing these financial
statements, taking into account the Group's strong liquidity
position at 31 March 2024 and a number of downside sensitivities,
and remain satisfied that the going concern basis of preparation is
appropriate. Further information is provided in note 1 of the
financial statements on page 18.
Foreign exchange
The Group does not hedge foreign
currency profit and loss translation exposures and the statutory
results are therefore impacted by movements in exchange rates. The
average rates used to translate the consolidated income statement
and to normalise prior year underlying and organic figures are as
follows:
Average exchange rates (equal to GBP)
|
H1 24
|
H1 23
|
Change
|
Euro (€)
|
1.16
|
1.14
|
+2%
|
US Dollar ($)
|
1.25
|
1.20
|
+5%
|
Canadian Dollar (C$)
|
1.70
|
1.62
|
+5%
|
South African Rand
(ZAR)
|
23.60
|
21.13
|
+12%
|
Appendix 1 - Alternative Performance
Measures
Alternative Performance Measures
are used by the Group to understand and manage performance. These
are not defined under International Financial Reporting Standards
(IFRS) or UK-adopted International Accounting Standards (UK-IFRS)
and are not intended to be a substitute for any IFRS or UK-IFRS
measures of performance but have been included as management
considers them to be important measures, alongside the comparable
GAAP financial measures, in assessing underlying performance.
Wherever appropriate and practical, we provide reconciliations to
relevant GAAP measures. The table below sets out the basis of
calculation of the Alternative Performance Measures and the
rationale for their use.
MEASURE
|
DESCRIPTION
|
RATIONALE
|
Underlying (revenue and profit)
measures
|
Underlying measures are adjusted
to exclude items which in management's judgement need to be
disclosed separately by virtue of their size, nature or frequency
to aid understanding of the performance for the year or
comparability between periods:
· Recurring items include purchase price adjustments including
amortisation of acquired intangible assets and adjustments made to
reduce deferred income arising on acquisitions, acquisition-related
items and unhedged FX on intercompany balances; and
· Non-recurring items that management judge to be one-off or
non-operational such as gains and losses on the disposal of assets,
impairment charges and reversals, and restructuring related
costs.
Recurring items are adjusted each
period irrespective of materiality to ensure consistent
treatment.
Underlying basic EPS is also
adjusted for the tax impact of recurring and non-recurring
items.
All prior period underlying
measures (revenue and profit) are retranslated at the current year
exchange rates to neutralise the effect of currency
fluctuations.
|
Underlying measures allow
management and investors to compare performance without the effects
of foreign exchange movements or recurring or non-recurring
items.
By including part-period
contributions from acquisitions, discontinued operations, disposals
and assets held for sale of standalone businesses in the current
and/or prior periods, the impact of M&A decisions on earnings
per share growth can be evaluated.
|
Organic (revenue and profit)
measures
|
In addition to the adjustments
made for Underlying measures, Organic measures:
· Exclude the contribution from discontinued operations,
disposals and assets held for sale of standalone businesses in the
current and prior period; and
· Exclude the contribution from acquired businesses until the
year following the year of acquisition; and
· Adjust the comparative period to present prior period
acquired businesses as if they had been part of the Group
throughout the prior period.
Acquisitions and disposals where
the revenue and contribution impact would be immaterial are not
adjusted.
|
Organic measures allow management
and investors to understand the like‑for‑like revenue and current
period margin performance of the continuing business.
|
Underlying Cash Flow from
Operations
|
Underlying Cash Flow from
Operations is Underlying Operating Profit adjusted for non-cash
items, net capital expenditure (excluding business combinations and
similar items) and changes in working capital.
|
To show the cash flow generated by
the operations and calculate underlying cash conversion.
|
Underlying Cash
Conversion
|
Underlying Cash Flow from
Operations divided by Underlying (as reported) Operating
Profit.
|
Cash conversion informs management
and investors about the cash operating cycle of the business and
how efficiently operating profit is converted into cash.
|
EBITDA
|
EBITDA is Underlying Operating
Profit excluding underlying depreciation, amortisation and share
based payments.
Underlying depreciation and
amortisation is the statutory equivalent measure, adjusted for the
amortisation of acquired intangibles. Underlying share based
payments is the statutory equivalent measure, adjusted for
M&A-related share based payment charges included within other
M&A activity related items.
|
To calculate the Net Debt to
EBITDA leverage ratio and to show profitability before the impact
of major non-cash charges.
|
Annualised recurring
revenue
|
Annualised recurring revenue
("ARR") is the normalised recurring revenue in the last month of
the reporting period, adjusted consistently period to period,
multiplied by twelve. Adjustments to normalise reported recurring
revenue involve adjusting for certain components (such as
non‑refundable contract sign‑up fees) to ensure the measure
reflects that part of the revenue base which (subject to ongoing
use and renewal) can reasonably be expected to repeat in future
periods.
|
ARR represents the annualised
value of the recurring revenue base that is expected to be carried
into future periods, and its growth is a forward‑looking indicator
of reporting recurring revenue growth.
|
Renewal Rate by Value
|
The ARR from renewals, migrations,
upsell and cross-sell of active customers at the start of the year,
divided by the opening ARR for the year.
|
As an indicator of our ability to
retain and generate additional revenue from our existing customer
base through up and cross sell.
|
Free Cash Flow
|
Free Cash Flow is Underlying Cash
Flow from Operations minus net interest paid, derivative financial
instruments and income tax paid, and adjusted for non-recurring
cash items (which excludes net proceeds on disposals of
subsidiaries) and profit and loss foreign exchange
movements.
|
To measure the cash generated by
the operating activities during the period that is available to
repay debt, undertake acquisitions or distribute to
shareholders.
|
% Subscription
Penetration
|
Underlying software subscription
revenue as a percentage of underlying total revenue.
|
To measure the progress of
migrating our customer base from licence and maintenance to a
subscription relationship.
|
Return on Capital Employed
(ROCE)
|
ROCE is
calculated as underlying Operating Profit, minus
amortisation of acquired intangibles, the result being
divided by capital employed, which is the
average (of the opening and closing balance for the period) total
net assets excluding net debt, derivative financial instruments,
provisions for non-recurring costs, financial liability for
purchase of own shares and tax assets or liabilities.
|
As an indicator of the current
period financial return on the capital invested in the
Company. ROCE is used as an underpin in
the FY21, FY22 and FY23 PSP awards.
|
Net debt
|
Net debt is cash and cash
equivalents less current and non-current borrowings.
|
To calculate the Net Debt to
EBITDA leverage ratio and an indicator of our
indebtedness.
|
Consolidated income
statement
For the six months ended 31 March
2024
|
Six months
|
Six
months
|
ended
|
ended
|
31 March
|
31
March
|
2024
|
2023
|
Note
|
£m
|
£m
|
Revenue
|
2
|
1,152
|
1,087
|
Cost of sales
|
|
(82)
|
(76)
|
Gross profit
|
|
1,070
|
1,011
|
Selling and administrative
expenses
|
|
(855)
|
(854)
|
Operating profit
|
2
|
215
|
157
|
Finance income
|
|
10
|
4
|
Finance costs
|
|
(22)
|
(22)
|
Profit before income
tax
|
|
203
|
139
|
Income tax expense
|
4
|
(47)
|
(39)
|
Profit for the period
|
|
156
|
100
|
|
Profit attributable to:
|
Owners of the parent
|
|
156
|
100
|
|
|
|
|
Earnings per share attributable to
the owners of the parent (pence)
|
|
Basic
|
6
|
15.31p
|
9.78p
|
Diluted
|
6
|
15.03p
|
9.66p
|
|
|
|
|
|
Consolidated statement of
comprehensive income
For the six months ended 31 March
2024
|
Six months
ended
31 March
2024
£m
|
Six
months
ended
31 March
2023 £m
|
Profit
for the period
|
156
|
100
|
|
|
|
Items of
other comprehensive income that may be reclassified to profit or
loss:
|
|
|
Exchange
differences on translating foreign operations and net investment
hedges
|
(29)
|
(93)
|
Cash flow
hedges
|
(1)
|
(1)
|
|
(30)
|
(94)
|
|
|
|
Other
comprehensive expense for the period, net of tax
|
(30)
|
(94)
|
|
|
|
Total
comprehensive income for the period
|
126
|
6
|
The notes on pages 18 to 33 form
an integral part of this condensed consolidated half-yearly
report.
Consolidated balance
sheet
As at 31 March 2024
|
Note
|
31 March
2024
£m
|
31 March
2023
£m
|
30 September
2023
£m
|
Non-current assets
|
|
|
|
|
Goodwill
|
7
|
2,190
|
2,238
|
2,245
|
Other intangible assets
|
7
|
245
|
288
|
274
|
Property, plant and
equipment
|
7
|
101
|
124
|
104
|
Equity investments
|
|
6
|
4
|
4
|
Trade and other
receivables
|
|
136
|
125
|
138
|
Deferred income tax
assets
|
|
73
|
35
|
56
|
Derivative financial
instruments
|
|
13
|
2
|
1
|
|
|
2,764
|
2,816
|
2,822
|
|
|
|
|
|
Current assets
|
|
|
|
|
Trade and other
receivables
|
|
391
|
367
|
376
|
Current income tax
asset
|
|
37
|
37
|
42
|
Cash and cash equivalents
(excluding bank overdrafts)
|
9
|
448
|
575
|
696
|
Assets classified as held for
sale
|
11
|
7
|
-
|
-
|
|
|
883
|
979
|
1,114
|
|
|
|
|
|
Total assets
|
|
3,647
|
3,795
|
3,936
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other
payables
|
|
(371)
|
(302)
|
(378)
|
Current income tax
liabilities
|
|
(26)
|
(33)
|
(25)
|
Borrowings
|
9
|
(15)
|
(16)
|
(14)
|
Provisions
|
|
(15)
|
(20)
|
(23)
|
Deferred income
|
|
(803)
|
(770)
|
(745)
|
|
|
(1,230)
|
(1,141)
|
(1,185)
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Borrowings
|
9
|
(1,244)
|
(1,250)
|
(1,243)
|
Post-employment
benefits
|
|
(20)
|
(19)
|
(19)
|
Deferred income tax
liabilities
|
|
(19)
|
(14)
|
(18)
|
Provisions
|
|
(27)
|
(24)
|
(24)
|
Trade and other
payables
|
|
(6)
|
(14)
|
(13)
|
Deferred income
|
|
(5)
|
(7)
|
(7)
|
Derivative financial
instruments
|
|
(8)
|
(20)
|
(20)
|
|
|
(1,329)
|
(1,348)
|
(1,344)
|
|
|
|
|
|
Total liabilities
|
|
(2,559)
|
(2,489)
|
(2,529)
|
Net assets
|
|
1,088
|
1,306
|
1,407
|
|
|
|
|
|
Equity attributable to owners of
the parent
|
|
|
|
|
Ordinary shares
|
8
|
11
|
12
|
12
|
Share premium
|
8
|
548
|
548
|
548
|
Other reserves
|
8
|
159
|
173
|
189
|
Retained earnings
|
|
370
|
573
|
658
|
Total equity
|
|
1,088
|
1,306
|
1,407
|
Consolidated statement of changes
in equity
For the six months ended 31 March
2024
|
Attributable to owners of
the parent
|
|
Ordinary
shares
£m
|
Share
premium
£m
|
Other reserves
£m
|
Retained
earnings
£m
|
Total
equity
£m
|
|
At 1 October 2023
|
12
|
548
|
189
|
658
|
1,407
|
|
Profit for the period
|
-
|
-
|
-
|
156
|
156
|
|
Other comprehensive expense, net
of tax
|
|
|
|
|
|
|
Exchange differences on
translating foreign operations and net investment hedges
|
-
|
-
|
(29)
|
-
|
(29)
|
|
Cash flow hedges
|
-
|
-
|
(1)
|
-
|
(1)
|
|
Total comprehensive
(expense)/income for the period
ended 31 March 2024
|
-
|
-
|
(30)
|
156
|
126
|
|
Transactions with
owners
|
|
|
|
|
|
|
Employee share option scheme
- value of employee services including
deferred tax
|
-
|
-
|
-
|
33
|
33
|
|
Proceeds from issuance of treasury
shares
|
-
|
-
|
-
|
2
|
2
|
|
Cancellation of ordinary
shares
|
(1)
|
-
|
-
|
1
|
-
|
|
Share buyback
programme*
|
-
|
-
|
-
|
(351)
|
(351)
|
|
Dividends paid to owners of the
parent
|
-
|
-
|
-
|
(129)
|
(129)
|
|
Total transactions with owners for
the period ended 31 March 2024
|
(1)
|
-
|
-
|
(444)
|
(445)
|
|
At 31 March 2024
|
11
|
548
|
159
|
370
|
1,088
|
|
|
|
|
|
|
|
|
|
*See notes 8 and 13.
|
|
Attributable to owners of the parent
|
|
Ordinary
shares
£m
|
Share
premium
£m
|
Other
reserves
£m
|
Retained
earnings
£m
|
Total
equity
£m
|
At 1 October 2022
|
12
|
548
|
267
|
570
|
1,397
|
Profit for the period
|
-
|
-
|
-
|
100
|
100
|
Other comprehensive
expense
|
|
|
|
|
|
Exchange differences on
translating foreign operations and net investment hedges
|
-
|
-
|
(93)
|
-
|
(93)
|
Cash flow hedges
|
-
|
-
|
(1)
|
-
|
(1)
|
Total comprehensive
(expense)/income
for the period ended 31 March 2023
|
-
|
-
|
(94)
|
100
|
6
|
Transactions with
owners
|
|
|
|
|
|
Employee share option scheme
- value of employee services including
deferred tax
|
-
|
-
|
-
|
25
|
25
|
Proceeds from issuance of treasury
shares
|
-
|
-
|
-
|
2
|
2
|
Purchase of shares by Employee
Benefit Trust
|
-
|
-
|
-
|
(1)
|
(1)
|
Dividends paid to owners of the
parent
|
-
|
-
|
-
|
(123)
|
(123)
|
Total transactions with owners
for the period ended 31 March 2023
|
-
|
-
|
-
|
(97)
|
(97)
|
At 31 March 2023
|
12
|
548
|
173
|
573
|
1,306
|
|
|
|
|
|
|
|
|
Consolidated statement of cash
flows
For the six months ended 31 March
2024
|
Notes
|
Six months
ended
31 March
2024
£m
|
Six
months
ended
31 March
2023
£m
|
Cash flows from operating
activities
|
|
|
|
Cash generated from continuing
operations
|
9
|
297
|
251
|
Interest paid
|
|
(41)
|
(30)
|
Income tax paid
|
|
(46)
|
(35)
|
Net cash generated from operating
activities
|
|
210
|
186
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
Purchase of equity
investment
|
|
(2)
|
-
|
Acquisition of subsidiaries, net
of cash acquired
|
11
|
-
|
(14)
|
Purchases of intangible
assets
|
7
|
(10)
|
(8)
|
Purchases of property, plant and
equipment
|
7
|
(4)
|
(2)
|
Interest received
|
|
11
|
4
|
Net cash used in investing
activities
|
|
(5)
|
(20)
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
Proceeds from
borrowings
|
9
|
-
|
440
|
Repayments of
borrowings
|
9
|
-
|
(353)
|
Capital element of lease
payments
|
|
(8)
|
(10)
|
Borrowing costs
|
|
(1)
|
(2)
|
Share buyback programme
|
8
|
(306)
|
-
|
Proceeds from issuance of treasury
shares
|
|
2
|
2
|
Purchase of shares by Employee
Benefit Trust
|
8
|
-
|
(1)
|
Dividends paid to owners of the
parent
|
5
|
(129)
|
(123)
|
Net cash used in financing
activities
|
|
(442)
|
(47)
|
|
|
|
|
Net (decrease)/increase in cash,
cash equivalents and bank overdrafts
(before exchange rate movement)
|
|
(237)
|
119
|
Effects of exchange rate
movement
|
9
|
(11)
|
(33)
|
Net (decrease)/increase in cash,
cash equivalents and bank overdrafts
|
|
(248)
|
86
|
Cash, cash equivalents and bank
overdrafts at 1 October
|
9
|
696
|
489
|
Cash, cash equivalents and bank
overdrafts at period end
|
9
|
448
|
575
|
Notes to
the financial information
For the
six months ended 31 March 2024
1. Group accounting
policies
General information
The Sage Group plc ("the Company")
and its subsidiaries (together "the Group") is a leader in
accounting, financial, HR and payroll technology for small and
mid-sized businesses.
This condensed consolidated
half-yearly financial statement was approved for issue by the board
of directors on 15 May 2024.
The financial information set out
above does not constitute the Company's annual financial
statements. Statutory Accounts for the year ended 30 September 2023
have been delivered to the Registrar of Companies. The auditor's
report was unqualified and did not contain statements under section
498 (2), (3) or (4) of the Companies Act 2006.
Whilst the financial information
included in this announcement has been prepared in accordance with
UK-adopted International Accounting Standards ("UK-IFRS") and
International Financial Reporting Standards ("IFRS") as issued by
the International Accounting Standards Board ("IASB"), this
announcement does not in itself contain sufficient information to
comply with IFRS or UK-IFRS. The financial information has been
prepared on the basis of the accounting policies and critical
accounting estimates and judgements as set out in the Annual Report
and Accounts 2023.
This condensed consolidated
half-yearly financial statement has been reviewed, not
audited.
The Company is a limited liability
company incorporated and domiciled in the UK. The address of its
registered office is C23 - 5 & 6 Cobalt Park Way, Cobalt Park,
Newcastle upon Tyne, NE28 9EJ. The Company is listed on the London
Stock Exchange.
All figures presented are rounded
to the nearest £m, unless otherwise stated.
Basis of preparation
The financial information for the
six months ended 31 March 2024 has been prepared in accordance with
the Disclosure and Transparency Rules of the Financial Conduct
Authority and with IAS 34, 'Interim Financial Reporting' as issued
by the IASB and as adopted for use in the UK.
This condensed consolidated
half-yearly financial statement should be read in conjunction with
the annual financial statements for the year ended 30 September
2023, which have been prepared in accordance with UK-IFRS and IFRS
as issued by the IASB.
Going concern
As at 31 March 2024, the Group had
a strong liquidity position with cash and available liquidity of
£1.1bn, supported by underlying cash conversion of 127% reflecting
the robust subscription-based business model. The Group's position
is further supported by a well-diversified customer base amongst
small and mid-sized businesses with high quality recurring revenue
and strong retention rates.
In reaching its assessment on
going concern, the Directors have reviewed liquidity forecasts for
the Group for the period to 30 September 2025 (the going concern
assessment period), which reflect the expected impact of economic
conditions on trading.
Scenario-specific stress testing
has been performed, with the level of churn assumptions increased
by 75%, and a significant reduction in the level of new customer
acquisition and sales to existing customers. In these severe stress
scenarios, the Group continues to have sufficient resources to
continue in operational existence, without the need to drawdown the
revolving credit facility or seek additional financing. If more
severe impacts occur, controllable mitigating actions to protect
liquidity, including the reduction of discretionary spend, are
available to the Group should they be required.
The Directors also reviewed the
results of reverse stress testing to provide an illustration of the
level of churn and deterioration in new customer acquisition which
would be required to exhaust cash down to minimum working capital
requirements. The result of the reverse stress testing has
highlighted that such a scenario would only arise following a
significant deterioration in performance, well in excess of the
assumptions considered in the stress testing scenarios. The
probability of these factors occurring is deemed to be remote given
the resilient nature of the subscription business model, robust
balance sheet, and continued strong cash conversion.
After making enquiries, the
Directors have a reasonable expectation that Sage has adequate
resources to continue in operation throughout the going concern
assessment period. Accordingly, these condensed consolidated
half-yearly financial statements have been prepared on a going
concern basis.
Accounting policies
The accounting policies adopted in
the preparation of these condensed consolidated half-yearly
financial statements are consistent with those of the annual
financial statements for the year ended 30 September 2023 as
described in those annual financial statements.
Adoption of new and revised IFRSs
There are no accounting standards,
amendments or interpretations effective for the first time this
financial period that have had a material impact on the Group. No
standards have been early adopted during the year.
The Directors also considered the
impact on the Group of new and revised accounting standards,
interpretations, or amendments which have been issued but were not
effective for the Group for the period ended 31 March
2024.
On 9 April 2024,
the International Accounting Standards Board
("IASB") published a new standard IFRS 18 "Presentation and
Disclosure in Financial Statements", which will be effective for
annual reporting periods beginning on or after 1 January 2027.
While IFRS 18 will not impact the recognition or measurement of
items in the financial statements, it will likely result in changes
to how Sage presents certain information. The Group is in the
process of assessing the impact that the application of this
standard will have on the Group's financial statements when first
applied.
No other new or revised accounting
standards, interpretations, or amendments which have been issued
but were not effective are expected to have a material impact on
the Group's financial statements when first applied.
Accounting estimates and judgements
The preparation of financial
statements requires the use of accounting estimates and judgements
by management. It also requires management to exercise its
judgement in the process of applying the accounting policies. We
continually evaluate our estimates and judgements based on
available information.
Management has determined that
there are no areas of estimation uncertainty that could be
significant under IAS 1, 'Presentation of Financial Statements',
being areas of estimation uncertainty with a significant risk of a
material change to the carrying value of assets and liabilities
within the next financial year.
Other key estimates are made when
preparing the financial statements, which, while not meeting the
definition of a significant estimate under IAS 1, involve the
measurement of certain material assets or a higher degree of
complexity.
Significant judgements are those
made by management in applying our accounting policies that have a
material impact on the amounts presented in the financial
statements.
Management's rationale in relation
to these key accounting estimates and significant judgements are
regularly assessed and, where material in value or in risk, are
discussed with the Audit and Risk Committee. These areas are
discussed in further detail below:
Revenue recognition (judgement)
Over a third of the Company's
revenue is generated from sales to business partners rather than
end users. The key judgement is determining whether the business
partner is a customer of the Group. The key criteria in this
determination is whether the business partner has taken control of
the product. Considering the nature of Sage's subscription products
and support services, this is usually assessed based on whether the
business partner has responsibility for payment, has discretion to
set prices, and takes on the risks and rewards of the product from
Sage.
Where the business partner is a
customer of Sage, discounts are recognised as a deduction from
revenue.
Where the business partner is not
a customer of Sage and their part in the sale has simply been in
the form of a referral, they are remunerated in the form of a
commission payment. These payments are treated as contract
acquisition costs.
Sage also generates revenue
through revenue-sharing and royalty arrangements with third-party
technology partners for the sale of their services to the end
customer. These arrangements also involve judgement to determine
whether Sage is acting as the principal or the agent in the
provision of services to the end customer, based on whether Sage
has control of the service before delivery. This assessment
considers whether Sage bears the pricing, inventory and performance
risks associated with the transaction.
Goodwill impairment (estimate)
The estimates applied in
calculating the value in use of the CGUs being tested for
impairment are a source of estimation uncertainty. The key
estimates considered in the calculation relate to the future
performance expectations of the business and include the average
medium-term revenue growth rate, the long-term growth rate of net
operating cash flows and the discount rate.
Management has performed a review
for indicators of impairment of goodwill as at 31 March 2024. As a
result of this review, no indicators of
impairment have been identified.
The carrying value of goodwill and
the key estimates used in performing the annual impairment
assessment are disclosed in note 6.1 of the annual financial
statements for the year ended 30 September 2023.
Website
This condensed consolidated
half-yearly financial report for the six months ended 31 March 2024
can also be found on our website: www.sage.com/investors/financial-information/results
2. Segment information
In accordance with IFRS 8,
"Operating Segments", information for the Group's operating
segments has been derived using the information used by the chief
operating decision maker. The Group's Executive Leadership Team
("ELT") has been identified as the chief operating decision maker,
in accordance with their designated responsibility for the
allocation of resources to operating segments and assessing their
performance through the Monthly Execution & Performance
Reviews. The ELT uses organic and underlying data to monitor
business performance. Operating segments are reported in a manner
which is consistent with the operating segments produced for
internal management reporting.
With effect from 1 October 2023,
the Group is organised into three key operating
segments:
·
North America
·
United Kingdom, Ireland, Africa and APAC
(UKIA)
·
Europe
For reporting under IFRS 8, each
of the three operating segments above represents a reportable
segment.
Prior to this date, the Group was
organised into seven operating segments: North America, UK &
Ireland, Central Europe (Germany, Austria and Switzerland), France,
Iberia (Spain and Portugal), Africa and the Middle East, and Asia
(including Australia).
The UKIA operating segment is the
aggregation of the previously identified UK & Ireland, Africa
and the Middle East, and Asia (including Australia) segments, while
the Europe operating segment is the aggregation of the previously
identified Central Europe, France and Iberia operating segments.
There have been no changes to the North America operating
segment.
Two of the reportable segments
presented above, North America and Europe, remain consistent with
the reportable segments identified in the most recent
annual financial statements for the year ended 30
September 2023. However in previous reporting
periods, the UKIA reportable segment was
disaggregated and presented as two reportable segments, UK &
Ireland and Africa & APAC.
Therefore, the financial data
presented in the following tables for the comparative period (six
months ended 31 March 2023) has been restated to aggregate the two
historic reportable segments into the newly identified
UKIA.
The revenue analysis in the table
below is based on the location of the customer, which is not
materially different from the location where the order is received
and where the assets are located.
Revenue by segment
Six months ended 31 March
2024
|
|
|
|
Statutory, Underlying and
Organic
£m
|
Change
Statutory
%
|
Change
Underlying
%
|
Change
Organic
%
|
Recurring revenue by segment
|
|
|
North America
|
|
|
506
|
8%
|
14%
|
14%
|
UKIA
|
|
|
321
|
6%
|
8%
|
8%
|
Europe
|
|
|
285
|
6%
|
8%
|
8%
|
Recurring revenue
|
|
|
1,112
|
7%
|
11%
|
11%
|
Other revenue by segment
|
|
North America
|
|
|
14
|
(13%)
|
(9%)
|
(9%)
|
UKIA
|
|
|
7
|
(12%)
|
(7%)
|
(7%)
|
Europe
|
|
|
19
|
(22%)
|
(20%)
|
(20%)
|
Other revenue
|
|
|
40
|
(17%)
|
(14%)
|
(14%)
|
Total revenue by segment
|
|
North America
|
|
|
520
|
8%
|
13%
|
13%
|
UKIA
|
|
|
328
|
5%
|
8%
|
8%
|
Europe
|
|
|
304
|
4%
|
6%
|
6%
|
Total revenue
|
|
|
1,152
|
6%
|
10%
|
9%
|
|
|
|
|
|
|
|
|
|
Six months ended 31 March
2024
|
|
|
|
Statutory, Underlying and
Organic
£m
|
Change
Statutory
%
|
Change
Underlying
%
|
Change
Organic
%
|
Total recurring revenue by type
|
|
|
Software subscription
revenue
|
|
|
937
|
10%
|
14%
|
13%
|
Other recurring revenue
|
|
|
175
|
(6%)
|
(2%)
|
(2%)
|
Recurring revenue
|
|
|
1,112
|
7%
|
11%
|
11%
|
Other revenue
|
|
|
40
|
(17%)
|
(14%)
|
(14%)
|
Total revenue
|
|
|
1,152
|
6%
|
10%
|
9%
|
|
|
|
|
|
|
|
|
|
Six
months ended 31 March 2023 (Restated)
|
|
Statutory and Underlying as reported
£m
|
Impact
of
foreign
exchange
£m
|
Underlying
£m
|
Organic
adjustments*
£m
|
Organic
£m
|
Recurring revenue by
segment
|
|
|
|
|
|
North America
|
467
|
(22)
|
445
|
1
|
446
|
UKIA**
|
303
|
(7)
|
296
|
-
|
296
|
Europe
|
269
|
(5)
|
264
|
-
|
264
|
Recurring revenue
|
1,039
|
(34)
|
1,005
|
1
|
1,006
|
Other revenue by
segment
|
|
|
|
|
|
North America
|
16
|
(1)
|
15
|
-
|
15
|
UKIA**
|
8
|
-
|
8
|
-
|
8
|
Europe
|
24
|
-
|
24
|
-
|
24
|
Other revenue
|
48
|
(1)
|
47
|
-
|
47
|
Total revenue by
segment
|
|
|
|
|
|
North America
|
483
|
(23)
|
460
|
1
|
461
|
UKIA**
|
311
|
(7)
|
304
|
-
|
304
|
Europe
|
293
|
(5)
|
288
|
-
|
288
|
Total revenue
|
1,087
|
(35)
|
1,052
|
1
|
1,053
|
* Adjustments relate to the acquisitions of Corecon.
** Previously disaggregated into
two reportable segments, i) UK & Ireland, and ii) Africa &
APAC.
Six
months ended 31 March 2023
|
|
Statutory and Underlying as reported
£m
|
Impact
of
foreign
exchange
£m
|
Underlying
£m
|
Organic
adjustments*
£m
|
Organic
£m
|
Total recurring revenue by
type
|
|
|
|
|
|
Software subscription
revenue
|
853
|
(27)
|
826
|
1
|
827
|
Other recurring revenue
|
186
|
(7)
|
179
|
-
|
179
|
Recurring revenue
|
1,039
|
(34)
|
1,005
|
1
|
1,006
|
Other revenue
|
48
|
(1)
|
47
|
-
|
47
|
Total revenue
|
1,087
|
(35)
|
1,052
|
1
|
1,053
|
* Adjustments relate to the acquisitions of Corecon.
Operating profit by segment
|
|
|
Six months ended 31 March 2024
|
|
Statutory
£m
|
Underlying
adjustments*
£m
|
Underlying and Organic
£m
|
Change
Statutory
%
|
Change
Underlying and Organic
%
|
Operating
profit by segment
|
|
|
|
|
North
America
|
86
|
20
|
106
|
97%
|
32%
|
UKIA
|
74
|
20
|
94
|
57%
|
35%
|
Europe
|
55
|
(1)
|
54
|
(16%)
|
(17%)
|
Total
operating profit
|
215
|
39
|
254
|
38%
|
18%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended 31 March 2023
(Restated)
|
|
|
Statutory £m
|
Underlying adjustments*
£m
|
Underlying as reported
£m
|
Impact of foreign exchange
£m
|
Underlying and Organic
£m
|
Operating
profit by segment
|
|
|
|
|
|
North
America
|
43
|
42
|
85
|
(5)
|
80
|
UKIA**
|
48
|
26
|
74
|
(4)
|
70
|
Europe
|
66
|
2
|
68
|
(3)
|
65
|
Total
operating profit
|
157
|
70
|
227
|
(12)
|
215
|
|
|
|
|
|
|
|
|
|
* Adjustments are detailed in note 3.
** Previously disaggregated into two
reportable segments, i) UK & Ireland, and ii) Africa &
APAC.
Reconciliation of underlying operating profit to statutory
operating profit
|
|
Six months ended
31 March 2024
£m
|
Six months ended
31 March 2023
£m
|
North America
|
|
106
|
80
|
UKIA*
|
|
94
|
70
|
Europe
|
|
54
|
65
|
Underlying operating
profit
|
|
254
|
215
|
Impact of
movement in foreign currency exchange rates
|
|
-
|
12
|
Underlying operating profit (as
reported)
|
|
254
|
227
|
Recurring items
|
|
(43)
|
(50)
|
Non-recurring items
|
|
4
|
(20)
|
Statutory operating
profit
|
|
215
|
157
|
* Previously disaggregated, for
the six months ended 31 March 2023, into two reportable segments,
i) UK & Ireland, and ii) Africa & APAC.
3. Adjustments between underlying profit
and statutory profit
|
Six months ended 31 March
2024
|
Six
months ended 31 March 2023
|
|
Operating
profit
£m
|
Profit
before tax
£m
|
Operating
profit
£m
|
Profit
before
tax
£m
|
Statutory measures
|
215
|
203
|
157
|
139
|
Recurring items
|
|
|
|
|
· Amortisation of acquired intangibles
|
26
|
26
|
26
|
26
|
· Other M&A activity-related items
|
17
|
17
|
24
|
24
|
· Foreign currency movements on intercompany
balances
|
-
|
-
|
-
|
1
|
Non-recurring items:
|
|
|
|
|
· Reversal of employee-related costs
|
(3)
|
(3)
|
-
|
-
|
· Reversal of restructuring costs
|
(1)
|
(1)
|
-
|
-
|
· Property restructuring costs
|
-
|
-
|
20
|
20
|
Underlying (as reported)
measures
|
254
|
242
|
227
|
210
|
Recurring items
Recurring items impacting
operating profit (selling and administrative costs) are comprised
of:
·
Amortisation of acquired intangibles £26m (six
months ended 31 March 2023: £26m) which have previously been
recognised as part of business combinations or similar
transactions. These assets are predominantly customer relationships
and technology rights.
·
Other M&A activity-related items £17m (six
months ended 31 March 2023: £24m) which include advisory, legal,
accounting, valuation and other professional or consulting services
which are related to M&A activity, as well as
acquisition-related remuneration and directly attributable
integration costs. £2m (six months ended 31 March 2023: £4m) of
these costs have been paid in the period, while the remainder are
expected to be paid in subsequent periods.
·
In the prior period, further recurring items
impacting profit before tax (net finance costs) were comprised
of foreign currency movements on
intercompany balances which occur due to retranslation of unhedged
intercompany balances other than those where settlement is not
planned or likely in the foreseeable future and resulted in a loss
of £1m for the six months ended 31 March 2023.
Non-recurring items
Non-recurring items impacting
operating profit (selling and administrative costs) are comprised
of:
·
Reversal of employee-related costs £3m (six
months ended 31 March 2023: £nil) relate to unutilised
employee-related provisions recognised in the prior year for French
payroll taxes.
·
Reversal of restructuring costs £1m (six months
ended 31 March 2023: £nil) primarily relates to unutilised
provisions recognised in 2021.
·
Property restructuring costs in the prior year
related to the reorganisation of a number of leased properties
following a strategic review of the Group's property portfolio.
Costs of £20m consisted of impairment of £13m of right of use
assets and other related fixed assets that are no longer in use as
well as a provision for directly attributable future running costs
associated with the properties.
The tax impact of both recurring
and non-recurring items is disclosed in note 6.
4. Income tax expense
The effective tax rate on
statutory profit before tax was 23% (six months ended 31 March
2023: 28%) whilst the effective tax rate on underlying profit
before tax for continuing operations was 23% (six months ended 31
March 2023: 24%). The effective income tax rate represents the best
estimate of the Group's average effective income tax rate expected
for the full year, applied to the profit before income tax for the
six months ended 31 March 2024.
The OECD's Pillar Two global tax
reform will apply to the Group from the financial year ended 30
September 2025. The group continues to assess the Pillar Two
framework and it is not expected to materially impact the Group's
effective tax rate in future periods.
5. Dividends
|
Six months ended
31 March 2024
£m
|
Six
months ended
31
March
2023 £m
|
Year
ended
30 September
2023
£m
|
Final dividend paid for the
year ended 30 September 2022 of 12.10p per share
|
-
|
123
|
123
|
|
|
|
|
Interim dividend paid for the
year ended 30 September 2023 of 6.55p per share
|
-
|
-
|
67
|
|
|
|
|
Final dividend paid for the
year ended 30 September 2023 of 12.75p per share
|
129
|
-
|
-
|
|
129
|
123
|
190
|
The interim dividend of 6.95p per share will be paid on 28 June
2024 to shareholders on the register at the close of business on 31
May 2024. The Company's distributable reserves are sufficient to
support the payment of this dividend. This condensed consolidated
half-yearly financial statement does not reflect this proposed
dividend payable.
6. Earnings per
share
Basic earnings per share is
calculated by dividing the profit for the period attributable to
owners of the parent by the weighted average number of ordinary
shares in issue during the period, excluding those held as treasury
shares and held by the Employee Benefit Trust, which are treated as
cancelled, until reissued.
For diluted earnings per share,
the weighted average number of ordinary shares in issue is adjusted
to assume conversion of all potentially dilutive ordinary shares,
exercisable at the end of the period. The Group has one class of
dilutive potential ordinary shares, which are share options granted
to employees where the exercise price is less than the average
market price of the Company's ordinary shares during the period,
where the vesting criteria are achieved at period end.
|
Underlying
Six months ended
31 March
2024
|
Underlying
as reported Six months ended
31 March
2023
|
Underlying
Six months ended
31 March
2023
|
Statutory
Six months ended
31 March
2024
|
Statutory
Six months ended 31 March
2023
|
Earnings attributable to owners of
the parent
|
|
|
|
|
|
Profit for the period
|
186
|
160
|
151
|
156
|
100
|
|
|
|
|
|
|
Number of shares
(millions)
|
|
|
|
|
|
Weighted average number of shares
for basic earnings per share
|
1,016
|
1,018
|
1,018
|
1,016
|
1,018
|
Dilutive effects of
shares
|
19
|
12
|
12
|
19
|
12
|
Weighted average number of shares
for diluted earnings per share
|
1,035
|
1,030
|
1,030
|
1,035
|
1,030
|
|
|
|
|
|
|
Earnings per share attributable to
owners of the parent (pence)
|
|
|
|
|
|
Basic earnings per
share
|
18.22
|
15.68
|
14.79
|
15.31
|
9.78
|
Diluted earnings per
share
|
17.89
|
15.49
|
14.61
|
15.03
|
9.66
|
Reconciliation of
earnings
|
Six months ended
31 March
2024
£m
|
Six months ended
31 March
2023
£m
|
Statutory profit for the period
attributable to owners of the parent
|
156
|
100
|
Adjustments:
|
|
|
· Recurring items
|
43
|
51
|
· Non-recurring items
|
(4)
|
20
|
Taxation on adjustments between
statutory and underlying profit before tax
|
(9)
|
(11)
|
Underlying profit for the period
attributable to owners of the parent (as reported)
|
186
|
160
|
Impact of movement in foreign
currency exchange rates
|
-
|
(9)
|
Underlying profit for the period
(after exchange movement) attributable to owners of the
parent
|
186
|
151
|
7. Non-current assets
|
Goodwill
£m
|
Other
intangible
assets
£m
|
Property,
plant and equipment
£m
|
Total
£m
|
Opening
net book amount at 1 October 2023
|
2,245
|
274
|
104
|
2,623
|
Additions
|
-
|
9
|
21
|
30
|
Transfer
to held for sale*
|
-
|
-
|
(7)
|
(7)
|
Depreciation, amortisation and other movements
|
-
|
(35)
|
(15)
|
(50)
|
Exchange
movement
|
(55)
|
(3)
|
(2)
|
(60)
|
Closing
net book amount at 31 March 2024
|
2,190
|
245
|
101
|
2,536
|
* See
note 11
|
Goodwill
£m
|
Other
intangible
assets
£m
|
Property,
plant and
equipment
£m
|
Total
£m
|
Opening
net book amount at 1 October 2022
|
2,391
|
320
|
152
|
2,863
|
Additions
|
-
|
8
|
12
|
20
|
Acquisition of subsidiary
|
8
|
4
|
-
|
12
|
Impairment
|
-
|
-
|
(13)
|
(13)
|
Depreciation, amortisation and other movements
|
-
|
(33)
|
(22)
|
(55)
|
Exchange
movement
|
(161)
|
(11)
|
(5)
|
(177)
|
Closing
net book amount at 31 March 2023
|
2,238
|
288
|
124
|
2,650
|
8. Equity
Ordinary shares and share premium
|
Number of
shares
|
Ordinary
Shares
£m
|
Share
premium
£m
|
Total
£m
|
At 31 March 2023 and 1 October
2023
|
1,100,789,295
|
12
|
548
|
560
|
Cancellation of shares
|
(25,920,557)
|
(1)
|
-
|
(1)
|
At 31 March 2024
|
1,074,868,738
|
11
|
548
|
559
|
As at 31 March 2024:
·
The Group held 68,732,947 treasury shares (30
September 2023: 73,906,470). During the period the Group
transferred 5,173,523
treasury shares to employees in order to satisfy vested
awards (six months ended 31 March 2023:
4,691,316).
·
The Employee Benefit Trust held 4,286,835
ordinary shares in the Company (30 September 2023: 4,419,478
ordinary shares). During the period, the Employee Benefit Trust
satisfied the vesting of certain share awards utilising 132,643
ordinary shares (six months ended 31 March
2023: 191,397).
The Employee Benefit Trust did not
receive additional funds for the purchase of shares in the market
(six months ended 31 March 2023: £nil).
On 22 November 2023, the Group
entered into a non-discretionary share buyback programme ending no
later than 23 April 2024, to purchase up to £350m of its own
shares. The programme completed in April 2024, for a total
consideration of £345m, plus expected associated taxes,
corresponding to the £351m recognised through retained earnings at
the balance sheet date (see note 13).
During the six months ended 31
March 2024, the Group purchased a total of 26,334,398 ordinary
shares, of which 25,920,557 were cancelled as at 31 March 2024. The
total consideration for those shares purchased in the current
period amounted to £309m, of which £304m had been paid as at 31
March 2024. Of the expected associated taxes plus fees, £2m had
been paid as at 31 March 2024.
Other Reserves
All components of other reserves
are presented on a consolidated basis on the face of the
consolidated statement of changes in equity.
|
|
|
|
|
|
|
Translation reserve
£m
|
Hedging Reserve
£m
|
Merger Reserve
£m
|
Total
£m
|
|
At 1 October 2023
|
124
|
4
|
61
|
189
|
|
Exchange differences on
translating foreign operations and net investment hedges
|
(29)
|
-
|
-
|
(29)
|
|
Cash flow hedges
|
-
|
(1)
|
-
|
(1)
|
|
At 31 March 2024
|
95
|
3
|
61
|
159
|
|
|
|
|
|
|
|
|
Translation reserve
£m
|
Hedging reserve
£m
|
Merger Reserve
£m
|
Total
£m
|
|
At 1 October 2022
|
206
|
-
|
61
|
267
|
|
Exchange differences on
translating foreign operations and net investment hedges
|
(93)
|
-
|
-
|
(93)
|
|
Cash flow hedges
|
-
|
(1)
|
-
|
(1)
|
|
At 31 March 2023
|
113
|
(1)
|
61
|
173
|
|
|
|
|
|
|
|
|
|
|
9. Cash flow and net debt
|
Six months ended
31 March
2024
£m
|
Six months ended
31 March
2023
£m
|
Statutory operating
profit
|
215
|
157
|
Recurring
and non-recurring items
|
39
|
70
|
Underlying operating profit (as
reported)
|
254
|
227
|
Depreciation, amortisation and other non-cash items
|
23
|
27
|
Share-based payments
|
21
|
20
|
Net changes in working
capital
|
35
|
2
|
Net capital expenditure
|
(11)
|
(10)
|
Underlying cash flow from
operations
|
322
|
266
|
Net interest paid
|
(31)
|
(28)
|
Income tax paid
|
(46)
|
(35)
|
Non-recurring items
|
(4)
|
(8)
|
Exchange movement
|
(1)
|
(1)
|
Free cash flow
|
240
|
194
|
Net debt at 1 October
|
(561)
|
(733)
|
Acquisition of subsidiaries or
similar transactions, net of cash acquired and lease liabilities
recognised
|
-
|
(14)
|
Acquisitions and disposals related
items
|
(34)
|
(16)
|
Purchase of equity
investment
|
(2)
|
-
|
Dividends paid to owners of the
parent
|
(129)
|
(123)
|
Proceeds from issuance of treasury
shares
|
2
|
2
|
New leases
|
(17)
|
(9)
|
Share buyback programme
|
(306)
|
-
|
Purchase of shares by Employee
Benefit Trust
|
-
|
(1)
|
Exchange movement
|
(3)
|
9
|
Other
|
(1)
|
-
|
Net debt at 31 March
2024
|
(811)
|
(691)
|
|
Six months ended
31 March
2024
£m
|
Six months ended
31 March
2023
£m
|
Underlying cash flow from operations
|
322
|
266
|
Net
capital expenditure
|
11
|
10
|
Recurring
and non-recurring cash items
|
(35)
|
(24)
|
Other
adjustments including foreign exchange translations
|
(1)
|
(1)
|
Statutory cash flow from
operations
|
297
|
251
|
Analysis of change in net debt
|
At
1 October 2023
£m
|
Cash flow
£m
|
Non-cash movements
£m
|
Exchange movement
£m
|
At
31 March 2024
£m
|
Cash, cash equivalents and bank
overdrafts
|
696
|
(237)
|
-
|
(11)
|
448
|
|
|
|
|
|
|
Liabilities arising from financing
activities
|
|
|
|
|
|
Loans due after more than one
year
|
(1,171)
|
-
|
(1)
|
6
|
(1,166)
|
Lease liabilities due within one
year
|
(14)
|
8
|
(9)
|
-
|
(15)
|
Lease liabilities after more than
one year
|
(72)
|
-
|
(8)
|
2
|
(78)
|
|
(1,257)
|
8
|
(18)
|
8
|
(1,259)
|
|
|
|
|
|
|
Total
|
(561)
|
(229)
|
(18)
|
(3)
|
(811)
|
The Group's debt is sourced from
sterling and euro denominated bond notes, with a syndicated
Revolving Credit Facility (RCF) of £630m also available.
|
|
|
|
|
|
|
|
Interest coupon*
|
2024
£m
|
2023
£m
|
|
Bonds
|
|
|
|
|
|
· GBP
350m bond notes
|
|
1.63%
|
350
|
350
|
|
· GBP
400m bond notes
|
|
2.88%
|
400
|
400
|
|
· EUR
500m bond notes
|
|
3.82%
|
427
|
433
|
|
· Unamortised issue and discount costs
|
|
N/A
|
(9)
|
(10)
|
|
Unamortised RCF loan
costs
|
|
N/A
|
(2)
|
(2)
|
|
Total
|
|
|
1,166
|
1,171
|
|
|
|
|
|
|
|
|
|
* This does not include the
impact of cross currency interest rate swaps entered into in
relation to the GBP 350m bond notes and EUR 500m bond
notes.
In November 2023, a one-year
extension was agreed to the Group's RCF, resulting in a new
maturity in December 2028. An extension option for a further
year remains available subject to specific provisions. At 31 March
2024, £nil of the RCF was drawn down (30 September 2023:
£nil).
10. Financial instruments
The carrying amounts of the
following financial assets and liabilities approximate to their
fair values: trade and other payables excluding tax and social
security, trade and other receivables excluding prepayments and
accrued income, lease liabilities, and short-term bank deposits,
and cash at bank and in hand.
The fair value of the sterling and
euro denominated bond notes are determined by reference to quoted
market prices and therefore can be considered as a level 1 fair
value as defined within IFRS 13.
The fair value of the
cross-currency interest rate swaps held by the Group is determined
using a discounted cash flow valuation technique at market rates
and therefore can be considered as a level 2 fair value as defined
within IFRS 13.
The fair value of the swaps held
by the Group as at 31 March 2024 was a £5m net asset, comprised of
£13m assets offset by £8m liabilities (30 September 2023: a £19m
net liability, comprised of £1m assets offset by £20m
liabilities).
The Group does not hold any
financial liabilities whose fair value would be considered as a
level 3 fair value as defined within IFRS 13.
The respective book and fair
values of bond notes and loan notes are included in the table
below.
|
At 31 March 2024
|
At 31 March 2023
|
At 30 September
2023
|
|
Book Value
£m
|
Fair Value
£m
|
Book Value
£m
|
Fair Value
£m
|
Book Value
£m
|
Fair Value
£m
|
Long term-borrowings (excluding
lease liabilities)
|
(1,166)
|
(1,056)
|
(1,177)
|
(1,033)
|
(1,171)
|
(1,014)
|
11. Acquisitions and
disposals
Disposals and discontinued
operations
Discontinued operations and assets
and liabilities held for sale
The Group had no discontinued
operations during the six-month periods ended 31 March 2024 (31
March 2023: none).
Assets held for sale at 31 March
2024 included the Group's Beaverton property site, part of the
North America operating segment, which was reclassified to assets
held for sale at 31 March 2024. Subsequently the sale of the
property was completed in April 2024. On classification as held for
sale, no adjustment was required to the carrying value of the
Beaverton property site of £7m.
There were no assets held for sale
at 31 March 2023.
12. Related party transactions
The Group's related parties are
its subsidiary undertakings and its key management personnel, which
comprises the Group's Executive Leadership Team members and the
Non-executive Directors. Transactions and
outstanding balances between the parent and its subsidiaries within
the Group, and between those subsidiaries, have been eliminated on
consolidation and are not disclosed in this note.
Key management compensation
|
Six months ended
31 March
2024
£m
|
Six
months ended
31 March
2023
£m
|
Salaries and short-term employee
benefits
|
6
|
5
|
Share-based payments
|
4
|
3
|
|
10
|
8
|
Key management personnel are
deemed to be members of the Executive Leadership Team, as defined
in the Group's Annual Report and Accounts 2023 and the
Non-executive Directors. Since the signing of the Group's Annual
Report and Accounts 2023, the following changes
to the Executive Leadership Team have taken
place:
·
Eduardo Rosini, in his role as Chief Growth
Officer, has been appointed to the Executive Leadership Team,
with effect from 1 March 2024;
·
Derk Bleeker remains on the Executive Leadership
Team, in a new role as Chief Commercial Officer, with effect from 1
March 2024; and
·
Aziz Benmalek has left his role as President -
North America, with effect from 1 March 2024.
There have been no other changes
to the composition of the Executive Leadership
Team.
13. Events after the balance
sheet date
On 11 April 2024, Sage confirmed
that the previously announced share buyback programme had been
completed. A total number of 29,289,778 ordinary shares in Sage
were repurchased as part of the programme and Sage will cancel all
of the purchased shares. The aggregate amount of the consideration
paid by Sage was £345m (excluding expected associated taxes) and
the average price paid per ordinary share was £11.79.
Managing Risk
Through our risk process, Sage is
able to effectively manage our strategic, operational, commercial,
compliance, change and emerging risks. This helps us to deliver our
strategic objectives and goals through risk informed decisions. The
Board's role is to maintain oversight of the key principal and
business risks, together with ensuring that the appropriate
committees are managing the risks effectively. Additionally, the
Board reviews the effectiveness of our risk management approach and
challenges our leaders to articulate their risk management
strategies.
Sage continually assesses its
principal risks to ensure alignment to our strategy and
consideration of where Sage is currently on its journey to building
sustainable growth.
By monitoring risk and performance
indicators related to this strategy, principal risk owners focus on
those metrics that signal current performance, as well as any
emerging risks and issues. The principal risks reflect our five
strategic priorities. The management and mitigation actions
described below reflect the principal risks and build on those
actions previously reported in the Annual Report and Accounts
2023.
KEY
Scale Sage Intacct
|
Expand medium beyond
financials
|
Build the small business engine
|
Scale the network
|
Learn and disrupt
|
PRINCIPAL RISK
|
RISK CONTEXT
|
MANAGEMENT AND MITIGATION
|
Understanding Customer Needs
|
Risk Trend: Stable Risk Environment
|
If Sage fails to anticipate,
understand, and deliver against the capabilities and experiences of
current and future customer needs, then customers will find
alternative solution providers.
Strategic alignment:
|
Understanding of how to attract new
customers while retaining existing customers is essential to
building sustainable growth. This requires a deep and continuous
flow of insights supported by processes and systems.
By understanding the needs of our
customers, Sage will differentiate itself from competitors, build
compelling value propositions and offers, use key drivers to
identify opportunities, influence product and process roadmaps,
decrease churn and support more effective revenue
generation.
|
· Brand-health surveys to provide an understanding of customer
perception of the Sage brand and its products, used to inform and
enhance our market offerings.
· A
Market and Competitive Intelligence team to provide insights that
Sage uses to win in the market.
· Proactive analysis of customer activity and churn data, to
improve customer experience.
· Customer Segmentation Framework and the customer market
analysis by region to help inform product roadmaps.
· Customer Advisory Boards, Customer Design Sessions and
closed-loop feedback to constantly gather information on customer
needs.
|
Execution of Product Strategy
|
Risk Trend Improving Risk Environment
|
If we fail to offer the
capabilities and experiences outlined in our product strategy, we
will not meet the needs of our customers or commercial
goals.
Strategic alignment:
|
We need to execute rapidly, a
prioritised product strategy that continues to simplify our product
portfolio and focuses on our drive to create the Sage Network that
will benefit our customers.
|
· A
robust product organisation supported by a governance model to
enable the way we build products.
· Migration framework in key countries to support our customers
as they move to the cloud.
· Continued expansion of Sage Intacct outside of North America
and for additional product verticals.
· Introduction of Sage Copilot AI assistant.
· Enhancing accessibility of Sage cloud products to WCAG 2.1 AA
standard by the end of 2025.
· A
strong focus on accountants through a tailored Sage for Accountants
proposition.
· A
partnership with Amazon Web Services (AWS) to develop
domain-specific accounting Large Language Model (LLM).
· Acquisition of Bridgetown Software to strengthen Sage's
Construction and Real Estate portfolio.
|
Developing and Exploiting New Business
Models
|
Risk Trend: Stable Risk Environment
|
Sage is unable to develop,
commercialise and scale new business models to diversify from
traditional Software as a Service (SaaS), especially
consumption-based services and those which leverage
data.
Strategic alignment:
|
We must be able to rapidly deploy
new innovations to our customers and partners by introducing
technologies, services, or new ways of working.
Innovation requires us to address
how we change and transform our people, processes and technology,
and how we differentiate our products and increase customer
efficiencies.
|
· A
Business Unit solely focused on scaling the Sage
Network.
· Continued digitalisation and automation of Sage products
through Sage Network and AI services.
· Enhanced, consistent digital experience for all Sage Business
Cloud users through the Sage Design System.
· Venture Studios Team asked to search for new business models
that may align with the Sage vision.
|
Route to Market
|
Risk Trend: Stable Risk Environment
|
If we fail to deliver a globally
consistent blend of route to market channels in each market, Sage
will miss the opportunity to efficiently deliver the right
capabilities and experiences to our current and future
customers.
Strategic alignment:
|
We have a blend of channels to
communicate with our current and potential customers and ensure our
customers receive the right information, on the right products and
services, at the right time. Our sales channels include selling
directly to customers through digital and telephone channels, via
our accountant network, and through partners.
We use these channels to maximise
our marketing and customer engagement activities. This can shorten
our sales cycle and ensure we improve customer
retention.
|
· Chief
Growth Officer and Chief Commercial Officer appointments to
demonstrate Sage's commitment to serve SMBs on a global and
consistent basis.
· Market
data and intelligence supports decision- making regarding the best
routes to market.
· Specified colleagues are in place to support partners, and to
help manage the growth of targeted channels.
· Sale
processes are targeted and configured by region for key customer
segments and verticals.
· A
specific Onboarding Squad enhances user journeys to enable customer
conversion.
· Acceleration of new partnerships to support the Sage
Network.
· Centre
of Excellence to support our indirect sales and third-party
approach.
· Expansion of relationship with AWS to elevate sustainability
for SMBs through the introduction of Sage Earth to the AWS
marketplace.
|
Customer Experience
|
Risk Trend: Stable Risk Environment
|
If we fail to provide ongoing value
to our customers by focusing on their needs over the lifetime of
their customer journey, we will not be able to achieve sustainable
growth through renewal.
Strategic alignment:
|
We must maintain a sharp focus on
the relationship we have with our customers, constantly offering
the products,
services, and experiences they need
for success. If we do not, they are likely to find another provider
who does.
Conversely, if we meet or exceed
their expectations, customers will stay with Sage, increasing their
lifetime value, and becoming our greatest marketing
advocates.
While Sage is known for its
high-quality customer support, this area requires constant,
proactive focus. By helping customers recognise and fully realise
the value of Sage's products, we can help increase the value of
these relationships over time and reduce the likelihood of customer
loss. By aligning our people, processes, and technology with this
focus in mind, all Sage colleagues can help our customers to be
successful and, in turn, improve financial
performance.
|
· Customer-journey mapping to ensure appropriate strategy
alignment and alignment to Target Operating Model.
· Expanded adoption of micromoments, which are customer
experiences broken down into moments that matter most to our
customers. We use micromoments to prioritise
improvements.
· 'Customer for life' roadmaps, detailing how products fit
together, any interdependencies, and migration pathways for current
and potential customers.
· Continuous Net Promoter Score (NPS) surveying allows us to
identify customer challenges rapidly, and respond in a timely
manner to emerging trends.
· Sage
Membership offered to all customers, providing customers with
access to curated resources, tools, and a connected community of
business leaders.
|
Third Party Reliance
|
Risk Trend: Stable Risk Environment
|
If we do not make our partners an
integral and aligned part of Sage's go-to-market strategy, we will
fail to deliver the right capabilities and experiences to our
customers.
Strategic alignment:
|
Sage relies on third-party
providers to support the delivery of our products to our customers
through the provision of cloud-native products.
Sage also has an extensive network
of sales partners critical to our success in the market, and
suppliers it relies on.
Any interruption in these services
or relationships could have a profound impact on Sage's reputation
in the market and could result in significant financial liabilities
and losses.
|
· Centre
of Excellence for our indirect sales and third-party
partners.
· Specified colleagues in place to support partners, and to help
manage the growth of targeted channels.
· Managed growth of the API estate, including enhanced product
development that enables access by third-party API developers and
optimisation of API integrations to improve efficiency.
· Enhanced third-party management framework, to support global
alignment, execution and oversight of third-party
activities.
· A
specialised Procurement function supporting the business with the
selection of strategic third-party suppliers and negotiation of
contracts and the implementation of a Sustainable Supply Chain
Strategy.
|
People and Performance
|
Risk Trend: Stable Risk Environment
|
If we fail to ensure we have
engaged colleagues with
the critical skills, capabilities,
and capacity we need to deliver on our strategy, we will not be
successful.
Strategic alignment:
|
As we evolve our priorities, the
capacity, knowledge and leadership skills we need will continue to
change. Sage will not only need to attract the right talent to
navigate change, but will also need to provide an environment where
colleagues can develop to meet these new expectations.
By empowering colleagues and
leaders to make decisions, be innovative, and be bold in meeting
our commitments, Sage will be able to create an attractive working
environment. By addressing what causes colleague voluntary
attrition, and embracing the values of successful technology
companies, Sage can increase colleague engagement and
create an aligned high-performing
team.
|
· Extensive focus on hiring channels to ensure we are attractive
in the market through our enhanced employee value proposition and
enhanced presence through social media such as Glassdoor,
Comparably, Twitter, LinkedIn, and Facebook.
· Reward
mechanisms designed to incentivise and encourage the right
behaviour, with a focus on ensuring fair and equitable pay in all
markets.
· A
series of Learning Academies and talent programmes to support the
development of internal talent including sponsorship programmes,
new director, graduate and apprentice programmes.
· An OKR
(Objectives and Key Results) framework to define measurable goals
and track outcomes of colleague success.
· Talent
Market Place solution to support identification of capabilities and
gaps; talent pipelines; development and career pathways;
mentoring.
· Strategic Workforce Planning Framework across the
business.
|
Culture
|
Risk Trend: Improving Risk Environment
|
If we do not define, shape and
proactively manage our culture in line with our Value and
Behaviours, we will find it difficult to achieve our strategic
priorities and purpose; we will risk disengaging colleagues,
increasing attrition and affecting our ability to attract and
retain diverse talent.
Strategic alignment:
|
The development of a shared
behavioural competency that encourages colleagues to always do the
right thing, put customers at the heart of business, and improve
innovation, is critical in Sage's success. Devolution of
decision-making, and the acceptance of accountability for those
decisions, will need to go hand in hand as the organisation
develops and sustains its shared Values and Behaviours, and fosters
a culture that provides customers with a rich digital
environment.
Sage will also need to create a
culture of empowered leaders that supports the development of
ideas, and that provides colleagues with a safe environment
allowing for honest disclosures and discussions. Such a trusting
and empowered environment can help sustain innovation, enhance
customer success, and encourage the engagement that results in
increased market share.
|
· Integration of Values and Behaviours into all colleague
priorities including talent attraction, selection, and onboarding
as well as OKRs.
· A DEI
strategy focused on building diverse teams, an equitable culture,
and fostering inclusive leadership. This is supported by measurable
plans and metrics to track progress, ensuring Sage meets its
commitments, including no tolerance of discrimination, equal
chances for everyone, an inclusive culture, removing barriers, and
DEI education.
· Code
of Conduct training for all colleagues (including Anti-Bribery and
Corruption requirements) delivered as snippets, allowing Sage to
signpost relevant training at colleagues' point of need.
· Core
eLearning modules rolled out across Sage, with regular refresher
training.
· Whistleblowing and incident-reporting mechanisms in place to
allow issues to be formally reported and investigated.
|
Cyber Security and Data Privacy
|
Risk Trend: Improving Risk Environment
|
If we fail to collect, process and
store data responsibly, and ensure an appropriate standard of cyber
security across the business, we will not meet our regulatory
obligations and will lose the trust of our stakeholders.
Strategic alignment:
|
Information is the life blood of a
digital company - protecting the confidentiality, integrity and
accessibility of this data is critical for a data-driven business,
and failure to do so can have significant financial and regulatory
consequences in the General Data Protection Regulation (GDPR) era.
In addition, we also need to use our data efficiently and
effectively to improve business performance.
|
· Multi-year cyber security programmes in IT and products to
ensure Sage is continuously improving, and reduce cyber risk across
technology, business processes and culture.
· Accountability within both IT and Product for all internal and
external data being processed by Sage. The Chief Information
Security Officer oversees information security, with a network of
Information Security Officers that directly support the
business.
· Launch
of the Trust and Security Hub and publication of Cyber Security for
SMBs report to support our customers.
· The
Chief Data Protection Officer oversees information
protection.
· Formal
certification schemes maintained across the business, and include
internal and external validation of compliance.
· All
colleagues are required to undertake awareness training for cyber
security, information management and data protection, with a focus
on the GDPR requirements.
· A
Cyber Security Risk Management Methodology is deployed to provide
objective risk information on our assets and systems.
|
Data Strategy
|
Risk Trend: Improving Risk Environment
|
If we fail to recognise the value
of our data assets, create effective data foundations, and
capitalise on their use, we will not be able to realise their full
potential to secure strategically aligned
outcomes.
Strategic alignment:
|
Data is central to the Sage
strategy to deliver sustainable growth by expanding the Sage
Network. The strategy is underpinned by our ability to innovate and
develop solutions to enhance customer propositions, improve insight
and decision-making and create new business models and
ecosystems.
Successful ability to use data will
accelerate our growth and will be a key driver in helping customers
transform how they run and build their businesses.
|
· A
strategy across customer, product, and enterprise data to support
the delivery of customer value and solve customer problems,
including the use of enhanced AI/ML capabilities.
· A
defined set of Data and AI Ethics Principles to ensure we use
customer data responsibly to achieve our strategy.
· A Data
and AI Ethics Council, which includes members from the Executive
Leadership Team and will govern activities relating to Data and AI
Ethics.
· Plan
to increase participation in the Sage Network, which will
contribute to more data to support the delivery of real customer
value and solve real customer problems.
· Governance policies, processes and tooling to enhance and
manage the quality and trust in our data.
· The
implementation of data architecture and associated data models that
facilitate data sharing and utilisation.
· A data
asset register, and associated use case catalogue, to enable
effective prioritisation and value creation.
|
Readiness to Scale
|
Risk Trend: Improving Risk Environment
|
As Sage's ambition grows, if it
fails to ensure its cloud products can build and operate at an
industrial, global scale it will erode its competitive
advantage.
The hosting of products must
achieve economies of scale, aligned to ambition, in parallel with
the ability to accelerate to market with quality. Both must be
achieved with reduced environmental impact and no customer
impact.
If not addressed, Sage's cloud
products would be less resilient and less able to respond to its
customer expectations.
Strategic alignment:
|
As Sage continues to build
sustainable growth, we continue to focus on scaling our current and
future platform-services environment in a rigorous, agile, and
speedy manner to ensure we provide a consistent and healthy cloud
platform and associated network.
Sage must provide the right
infrastructure and operations for all customer products, a hosting
platform together with the governance to ensure optimal service
availability, performance, security protection, and restoration (if
required).
|
· Migration of products to public cloud offerings to improve
scalability, resilience and security.
· Accountability across product owners, underpinned by ongoing
risk assessments and continuous improvement projects.
· Formal
onboarding process through ongoing portfolio management
· Incident and problem management change processes adhered to
for all products and services.
· Service-level objectives including uptime, responsiveness, and
mean time to repair.
· Defined real-time demand-management processes and controls,
and also disaster-recovery capability and operational-resilience
models.
· A
governance framework to optimise operational cost base in line with
key metrics.
· All
new acquisitions are required to adopt Sage cloud operation
standards.
|
Environmental, Social and Governance
|
Risk Trend: Improving Risk Environment
|
If Sage fails to fully, and
continually, respond to the range of opportunities and risks
associated with ESG it will erode its reputation and competitive
advantage.
Sage would also be less resilient
and able to respond to its internal and external expectations and
damage stakeholder trust. Sage may also incur higher cost of
capital and lose credibility unless it can demonstrate strong ESG
credentials to the market.
Strategic alignment:
|
We invest in education,
technology,
and the environment to give
individuals, SMBs, and our planet the opportunity to
thrive.
Internally, it is essential that
Sage understands the potential impact of climate change to its
strategy and operations and considers appropriate
mitigations.
Societal and Governance-related
issues are integral to Sage's purpose and values and to the
achievement of
Sage's strategy.
You can read more about the work we
are doing on ESG in the Sustainability and Society Report
2023.
|
· Sage's
Sustainability and Society strategy, informed by a rigorous
materiality assessment, focusing on 3 pillars: Protect the Planet,
Tech for Good, Human by Design.
· Ensuring adequate executive oversight through the
Sustainability and Society Committee.
· Enabling accountability through integration on ESG measures
within long-term incentive plans.
· A
strict portfolio governance approach to working cross-functionally
to meet sustainability commitments.
· An
integrated framework for the management of ESG-related risk and, in
particular, physical and transitional climate risks, as detailed by
TCFD.
· All
colleagues are encouraged to take up to 5 paid Sage Foundation days
each year, to support charities and provide philanthropic support
to the community.
|
Statement of Directors' Responsibilities
The condensed consolidated
half-yearly financial report for the six months ended 31 March 2024
includes the following responsibility statement.
Each of the Directors confirms
that, to the best of their knowledge:
· the Group
condensed consolidated half-yearly financial statements, which have
been prepared in accordance with IAS34, "Interim Financial
Reporting" as adopted by the UK and as issued by the IASB, give a
true and fair view of the assets, liabilities, financial position
and profit of the Group; and
· the
Half-Yearly Management Report includes a fair review of the
information required by Disclosure Guidance and Transparency
Rules 4.2.7R and 4.2.8R, namely:
o an
indication of important events that have occurred during the six
months ended 31 March 2024 and their impact on the condensed
consolidated half-yearly financial report, and a description of the
principal risks and uncertainties that the Group faces for the
remaining six months of the current financial year; and
o any related party transactions in the six months ended 31
March 2024 that have materially affected the financial position or
performance of the Group during that period and any changes in the
related party transactions described in the last Annual Report that
could have a material effect on the financial position or
performance of the Group in the six months ended 31 March
2024.
The Directors of The Sage Group
plc are consistent with those listed in the Group's Annual Report
and Accounts 2023, except for the following changes:
· Drummond
Hall, has retired as a Non-executive Director and from his role as
Senior Independent Director with effect from 31 December 2023;
and
· Annette
Court, has been appointed as Senior
Independent Director with effect from 1 January
2024.
A list of current directors is
maintained on the Group's website: www.sage.com.
On behalf
of the Board
J
Howell
Chief Financial Officer
15 May 2024
Independent review report to The Sage Group
plc
Conclusion
We have been engaged by the
Company to review the condensed set of financial statements in the
half-yearly financial report for the six months ended 31 March 2024
which comprises the Consolidated income statement, Consolidated
statement of comprehensive income, Consolidated balance sheet,
Consolidated statement of changes in equity, Consolidated statement
of cash flows and the related explanatory notes 1 to 13. We have
read the other information contained in the half yearly financial
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Based on our review, nothing has
come to our attention that causes us to believe that the condensed
set of financial statements in the half-yearly financial report for
the six months ended 31 March 2024 is not prepared, in all material
respects, in accordance with UK adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in
accordance with International Standard on Review Engagements 2410
(UK) "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" (ISRE) issued by the Financial
Reporting Council. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
As disclosed in note 1, the annual
financial statements of the group are prepared in accordance with
UK adopted international accounting standards. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis of Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or
that management have identified material uncertainties relating to
going concern that are not appropriately disclosed.
This conclusion is based on the
review procedures performed in accordance with this ISRE, however
future events or conditions may cause the entity to cease to
continue as a going concern.
Responsibilities of the directors
The directors are responsible for
preparing the half-yearly financial report in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
In preparing the half-yearly
financial report, the directors are responsible for assessing the
company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly
report, we are responsible for expressing to the Company a
conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our
Conclusions Relating to Going Concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for Conclusion paragraph of this report.
Use of our report
This report is made solely to the
company in accordance with guidance contained in International
Standard on Review Engagements 2410 (UK) "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our work, for this report, or
for the conclusions we have formed.
Ernst & Young LLP
London
15 May 2024
Notes: [1]
The maintenance and integrity of the Sage Group
plc web site is the responsibility of the directors; the work
carried out by the auditors does not involve consideration of these
matters and, accordingly, the auditors accept no responsibility for
any changes that may have occurred to the financial information
since it was initially presented on the web
site. [2]
Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.