Accounting software firm Sage Group plc has launched a share buyback programme for a consideration of up to £400 million.
The Newcastle-headquartered firm has entered into an arrangement with brokers J.P. Morgan Securities plc and Morgan Stanley & Co. International plc, which will conduct the first and second halves of the programme respectively.
The programme will run from 20th November 2024 and is expected to end no later than 3rd June 2025.
Meanwhile Sage reported a 21% increase in underlying operating profit to £529m, which it attributed to disciplined cost management and ongoing investment.
Underlying total revenue increased by 9% to more than £2.3 billion, which it said reflected the strength of its subscription-based recurring revenue model.
EBITDA grew by 16% to £622m, with margin increasing by 160 basis points to 26.6%.
“The share buyback programme is consistent with the group’s disciplined capital allocation policy, and reflects the board’s confidence in Sage’s future prospects, together with Sage’s strong cash generation and robust financial position,” it said in a notice to the London Stock Exchange.
“Sage continues to have considerable financial flexibility to drive the execution of its growth strategy.”
The purpose of the share buyback programme is to reduce the share capital of Sage, it said.
“Sage has delivered another successful year, achieving strong, broad-based revenue growth together with significantly higher profits and cash flows,” said CEO Steve Hare.
“We also invested further in our products and continued to execute well against our strategic priorities.
“Our high pace of innovation continues, as we enhance existing products and expand key cloud solutions throughout our markets. The Sage Network platform is enabling us to accelerate the delivery of new services, and we’ve made good progress with Sage Copilot, our generative AI-based digital assistant, now available with selected products across our portfolio.
“Small and mid-sized businesses remain resilient, despite the ongoing macroeconomic uncertainty, and they continue to choose Sage to help them become more productive and efficient. Building on our progress to date, we look forward to delivering further sustainable growth in the year ahead.”