Small business IT spend still low: Sage

CIOL Bureau
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LONDON, UK: British accountancy software firm Sage Group said it was seeing no signs of an upturn in the small-business market, but growth in subscriptions, which include support and maintenance, was keeping trading on track.


Chief Executive Paul Walker said, "We have seen no change to the environment over the period and our first-quarter results were in line with our expectations."

The Newcastle-based company, which sells business management software to more than 6 million small and medium-businesses, said trading was in line across all of its regions, with the market for software and services remaining "subdued."

Sage, however, said strong cash generation helped it to reduce net debt to 392 million pounds at December 31, from 439 million pounds at September 30.


Shares in the group were 1.2 percent lower at 234.8 pence by 1206 GMT (7:06 a.m. EST), underperforming a 0.3 percent weaker European technology index.

Analysts at Deutsche Bank said the quarter appeared to be "solid" in relation to its forecasts of 1.40 billion pounds in revenue and 328 million pounds ($529.3 million) in pretax profit for the year.

But it said Sage was still likely to be experiencing mild organic slowdown and it suspected the United States remained the softer region.


Deutsche's forecasts are slightly beneath their peers, who see revenue for the year broadly unchanged on 2009 at 1.41 billion pounds and adjusted pretax profit at 336 million pounds, up from 308 million pounds, according to a company-supplied consensus.