Sage year profit up 14 per cent

Britain's biggest software company Sage Group Plc said today its adjusted full-year pretax profit rose 14 per cent to £251

Britain's biggest software company Sage Group Plc said today its adjusted full-year pretax profit rose 14 per cent to £251.3 million, and it almost doubled its dividend.

The Newcastle-based company, which provides accountancy software to 5.5 million mainly small business customers worldwide, said trading in the new year had started well, though margins in North America would be hit by a recent restructuring.

Shares in the company, which are down nearly a third in the year to date due to problems at its North America business, were up 5 per cent at 204 pence by 9:09am , valuing the business at £2.67 billion.

"Pretax profit is a touch ahead of our forecasts, (but) a key change is the rebasing of the dividend," Landbanki analyst Kevin Ashton said in a note.

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The company increased its dividend by 95 per cent to 7 pence.

Sage launched a restructuring and management shake-up of its North American division earlier this year, and Chief Executive Paul Walker said margins would drop slightly from the 20 per cent recorded in the 12 months to end September 2007.

But he added that revenue growth in the region, just 4 percent in 2006/07, compared with an overall group figure of 7 per cent, would increase to around 5-6 per cent.

"North America investment will impact margins in 2008, but we will see a modest improvement in organic growth," Walker told reporters.

Sage said overall revenues came in 30 per cent higher at £1.15 billion, as reported in a trading update last month.