Sage boss says London listing ‘is not holding us back’, despite North America making up almost half of revenue

Steve Hare, boss of Sage, said firms are optimistic for the future (Sage / PA)
Steve Hare, boss of Sage, said firms are optimistic for the future (Sage / PA)

The boss of accounting software firm Sage said he is “very proud” to be listed in London, even as its North American arm grows to bring in almost half of the company’s  revenue.

The comments came as Sage’s shares rose today after it revealed its revenue for the year is set to be higher than it had previously expected.

Sage now sees organic revenue for the year to 30 September as being 11% higher than the past year, having previously expected growth just  ahead of last year’s 9%.

The fastest rise came in North America, at 28%, though CEO Steve Hare said the main reason for the upgrade was that growth elsewhere had outperformed expectations.

He noted that a strong level of optimism from small businesses in the UK and elsewhere played a major role in that overperformance. UK and Ireland revenue was up by 10%.

“We serve SMEs and although they obviously are facing a number of challenges, they are very much feeling confident about the future,” he said.

With a market capitalisation of more than £8 billion, Sage is among the biggest London-listed tech companies. As a number of cutting-edge firms choose New York over London, amid concerns that UK-listed shares tend to be undervalued, Hare said he did not see any reason to abandon the City.

“We’re proud of our roots,” he said. “We were born in Newcastle and were very proud of that.

“What I ask is, ‘What do we need to do to continue to grow the business?’ And we have no problem getting access to capital.

“We are very proud to be listed in the UK. It is not holding us back.”

Hare also said he saw AI as a major opportunity, creating a new kind of ‘virtual assistant’ for small businesses.

“We’ve had AI built into our products for many years but we are very excited about the next generation of AI,” he said. “What’s very exciting about generative AI is that it can reach more conclusions and provide more insight.

“So what we’re able to do is we can deploy that type of technology not just to be compliant, not just to be more productive but to provide insights. Think of it like a virtual assistant rather than just giving us better productivity.”

Sage shares are up 3.9% to 853p, approaching the record levels they reached in early 2000.

AJ Bell investment director Russ Mould said “the company is doing a good job of navigating a decidedly mixed economic environment”.

Dan Ridsdale, head of technology at Edison Group, said the company is now a “bona fide” software-as-a-service company, and noted that peers in that space tend to trade at higher multiples.