Type | Public (LSE: SGE) |
---|---|
Industry | Computer software |
Founded | Newcastle upon Tyne, England, UK (1981) |
Headquarters | Newcastle upon Tyne, England, UK |
Key people | Tony Hobson, Chairman Paul Walker, CEO |
Products | Accounting, CRM, Varying according to country, MRP |
Revenue | £1,439.3 million (2009)[1] |
Operating income | £280.6 million (2009)[1] |
Net income | £189.5 million (2009)[1] |
Employees | 13,400 (2010)[2] |
Website | www.sage.com |
The Sage Group plc (abbreviated Sage, LSE: SGE) is engaged in the development, distribution and support of business management software and related products and services for medium-sized and smaller businesses.[3] The company has 6.1 million customers and 13,400 employees.
The Company is listed on the London Stock Exchange and from time to time has been the only UK software company listed in the FTSE 100 Index.
The Company is also involved in a number of educational and charity initiatives such as funding of a Tyneside music venue The Sage Gateshead and partnership with Durham University Business School.
Contents |
History
Early history
The Company was founded by David Goldman together with Paul Muller and Graham Wylie in 1981 in Newcastle upon Tyne to develop estimating and accounting software for small businesses.[4]
While a student at Newcastle University Graham Wylie took a summer job with an accountancy firm funded by a government small business grant to write software to help their record keeping. This became the basis for Sage Line 50. Next, hired by David Goldman to write some estimating software for his printing company, Campbell Graphics, Graham used the same accounting software to produce the first version of Sage Accounts. David was so impressed he hired Graham and academic Paul Muller to form Sage, selling first to printing companies but then to the wider market through a network of resellers.[5]
In 1984 the Company launched Sage software, a product for the Amstrad PCW word processor,[4] which used the CP/M operating system. Sage software sales escalated in that year from 30 copies a month to over 300.[4] The Company was first listed on the London Stock Exchange in 1989.[4]
Appointment of Paul Walker as CEO
In 1994 Paul Walker was appointed Chief Executive. In 1998 Sage’s Professional Accountants Division was established. In 1999 Sage entered FTSE 100[4] and launched a dedicated Irish division, based in Dublin as well as its e-business strategy. In that same year the UK acquisition of Tetra saw Sage enter the mid-range business software market.[6]
In 2000 Sage shares were named ‘best performing share of the 90s’ in the UK business press.[7] In 2001 Sage acquired Interact Commerce Inc.[8] and entered the CRM/contact management market and in 2002 Sage won 'Business of The Year' in National Business Awards.[9] Also that year Sage sponsored the new Music Centre in Gateshead for £6m - now known as The Sage Gateshead - the largest ever UK arts/business sponsorship.[10] By 2003 Sage was the only remaining technology stock in the FTSE 100 Index. In 2003 at age 43 Graham Wylie retired with 108.5 million shares in Sage worth £146m. He was rated Britain's 109th richest person in the 2002 Sunday Times' rich list.[5]
Search for a new CEO
On 19 April 2010, Sage announced that its CEO, Paul Walker, had indicated an interest in stepping down from his position, which he had held for 16 years.[11] The Financial Times reported that his departure would lead to speculation over Sage’s mergers and acquisitions, which have been a key component to the group’s growth in the past 20 years. In an interview with the Times, the CEO of Sage's UK business stated that: "Acquisitions are part of our DNA".[12]
Walker is one of the longest serving CEOs of a FTSE100 company, only exceeded by Sir Martin Sorrell at WPP and Tullow Oil's Aidan Heavey.[13] According to the Daily Mail, Walker is likely to leave Sage with as much as £21 million given his shares, bonus plan and salary.[14]
Operations
Founded and headquartered in Newcastle upon Tyne, United Kingdom, the company initially grew organically, but more recently has grown primarily through acquisitions. It now operates worldwide. The company's US headquarters are in Irvine, California, the Canadian headquarters are in Richmond, Canada and the French and Continental European headquarters are in Paris, France.
Sage has 6.1 million customers and 13,400 employees across the world. Key industry focus includes: Healthcare; HR & Payroll; Construction/ Real-Estate; Transport/ Distribution; Payment Processing; Accountancy; Not-for-Profit; Manufacturing; Retail; Automotive Distribution.[15]
Financial Information
In the year to September 2009, Sage reported revenues of £1,439 million, an 11% increase in reported revenues and 4% decline in organic revenues (adjusting for currency moves and acquisitions). The company's profit margin (defines as EBITA, earnings before interest, tax and amortisation) fell 1% to 22% for the 2009 year & adjusted pre-tax profit was £308 million.[16] Sage reported that 55% of its revenue came from the Accounting sector with 26% from Industry-specific customers, 10% from HR & payroll, 5% from payment processing and 4% from CRM. Net debt stood at £439m at the end of September 2009 with an net debt to EBITDA ratio of 1.3 times.
Sept year-end, £ millions | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
---|---|---|---|---|---|---|---|---|
Revenue | 552 | 560 | 688 | 760 | 936 | 1,158 | 1,295 | 1,439 |
Reported growth | n/a | n/a | n/a | n/a | +12% | +30% | +7% | +11% |
Underlying growth | n/a | n/a | n/a | n/a | +7% | +7% | +3% | -4% |
EBITA | n/a | n/a | n/a | 202 | 249 | 283 | 300 | 321 |
Pre-Tax Profit | 129 | 151 | 181 | 194 | 221 | 223 | 241 | 267 |
In the year to September 2009, Europe represented the largest region by revenues generating £763 million and an EBITA profit of £192 million. This compares with the North American divisions revenues of £576 million and EBITA profit of £105 million with the rest of the world generating revenues of £100 million and EBITA profit of £24 million. Within Europe, the Mainland European division run by Guy Berruyer dominates on a revenues and profit basis generating circa 70% of all European revenues and circa 60% of profits.[17]
Board of Directors
Sage's board of directors consists of 11 individuals with 6 non-executive independent directors including the chairman.
Name (Alphabetically) | Title | Executive/Non-Executive |
---|---|---|
Guy Berruyer | CEO, Mainland Europe and Asia | Executive |
David Clayton | Group Strategy Director | Executive |
Paul Harrison | Group Finance Director | Executive |
Tony Hobson | Chairman | Non-executive Director |
Tim Ingram | Senior Independent | Non-executive Director |
Tamara Ingram | Independent | Non-executive Director |
Ruth Markland | Independent | Non-executive Director |
Ian Mason | Independent | Non-executive Director |
Mark Rolfe | Independent | Non-executive Director |
Paul Stobart | CEO, UK and Ireland | Executive |
Paul Walker | Chief Executive | Executive |
The Chairman, Tony Hobson is the Chairman of Northern Foods plc[18] and a non-executive director of Glas Cymru (Welsh Water) and eSure. He is also Chairman of the Trustees of Changing Faces, the leading UK disfigurement charity. He is a Chartered Accountant and an MBA and was previously Group Finance Director of Legal & General Group plc for 14 years retiring in 2001. He joined the Board in June, 2004 and became Chairman in May, 2007.[19]
Products
The company's product set can be divided into: Accounting; Payroll; Customer Relationship Management (CRM); Financial forecasting; Payment processing; Job costing; Human Resources; Business intelligence; Taxation and other products for accountants; Business stationery; Development platforms; E-business; Enterprise Resource Planning (ERP).
Sage's products include:
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Competitors
According to the June 2009 Worldwide ERP survey by the Gartner Group, Sage had a 9% market share of total global ERP software revenues in 2008. With SAP, Oracle, Microsoft and Infor representing the major competition.[20][21] In the Gartner article, the ERP market was estimates to be worth $23.8 billion in revenues in 2008 and $24.5 billion in 2009. However, an analysis by IDC in October 2006 of the small business market estimated Sage's market share at 21% versus Microsoft's 12%, Oracle's 9%, Intuit's 6% and SAP's 3%. A major part of the small business ERP market, 49%, is served by other providers.
Sage is increasingly seeing competition from web-based or cloud solutions from companies including Intacct, NetSuite and SAP[22][23].
Sponsorship
The Sage Group is a patron of The Sage Gateshead, a new Tyneside music venue designed by Sir Norman Foster.[10]
See also
References and footnotes
- ^ a b c Annual Report 2009
- ^ Sage: About us
- ^ "Sage Group PLC: Full Description". Reuters. http://stocks.us.reuters.com/stocks/fullDescription.asp?symbol=SGE.L&WTmodLOC=C5-Profile-1. Retrieved 2008-01-12.
- ^ a b c d e Sage History
- ^ a b Vaughan-Adams, Liz (2003-04-12). "Sage founder retires at 43 to get married and enjoy his £146m fortune". The Independent on Sunday. http://www.independent.co.uk/news/business/news/sage-founder-retires-at-43-to-get-married-and-enjoy-his-acircpound146m-fortune-594205.html. Retrieved 2009-03-15.
- ^ Sage buys Tetra
- ^ Sage looks risky in an uncertain business climate
- ^ Sage buys Interact Commerce
- ^ Business of the year 2002
- ^ a b Software sages of Newcastle
- ^ Walker to step down as Sage chief executive
- ^ Business big shot: Paul Stobart
- ^ Sage boss announces departure plan
- ^ Sage chief Paul Walker is set to exit with £21m
- ^ Reuters profile of Sage
- ^ Annual Report 2009
- ^ Performance Summary 2009
- ^ The Board of Northern Foods
- ^ Directors' Biographies
- ^ Business Software and Services
- ^ Magic Quadrant for Midmarket and Tier 2-Oriented ERP for Product-Centric Companies
- ^ SaaS 2.0 - "More Sage Insights" - http://intacct.blogspot.com/2009/06/more-sage-insight.html
- ^ Press Release - "NetSuite's Sage Switch Program Offers Sage Customers Major Discount to Embrace NetSuite Cloud" - http://www.netsuite.com/portal/press/releases/nlpr03-04-09.shtml