Sage identifies pent-up SME demand for software


Sage identifies pent-up SME demand for software

Simon Quicke
Pent-up demand in the SME community, caused by the recession, should start to filter through and improve the market for Sage as it looks to continue to build on the recovery.

The software vendor issued unaudited half yearly results that showed a marked improvement on last year but comments made by chief executive Paul Walker (pictured) indicated there were more orders waiting out there. paul-walker.jpg

"Following a period where SMEs have delayed upgrading and investing in software solutions, we believe there is pent up demand which will be realised as markets recover," he said.

"In the longer term, we have a significant opportunity to provide connected business solutions to our customers. In the short term, while the recovery remains tentative, we will continue to manage our cost base prudently whilst investing and preparing for future profitable growth," he added.

For the half year ended 31 March Sage delivered a 11% increase in pre-tax profits to £177.5m and kept revenue almost stable at £705.3m.

Contributing to the improvement were increases in software subscription revenue and services with 127,000 customers added in the first fiscal half.

The vendor, which has been taking steps to control costs with measures such as a voluntary redundancy programme, highlighted its measures as a factor in its improved profitability.

One of the tasks that Sage faces internally in the second half is to find a replacement for Walker who announced he was stepping down last month.

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