The Sage earnings are out. Overall I think they're looking pretty good. Dumping Healthcare seems to have helped North America although the total software sales number is still falling (and I think this is compared to last year which was down 8%).
I spotted in the Sage slide deck that total customers on plan had fallen about 65,000 from 2010. I'm guessing that is partly attributable to the disposition of Healthcare. I'm asking Sage whether this is so -- and if it is whether they can provide detail on what portion of (a) total customers on plan and (b) customer 2011 additions on plan -- were removed due to Healthcare. This will give us a better picture of the overall growth of customers on maintenance (Sage admits that selling more to existing customers is basically their short term plan --- so these growth numbers are important since if you're losing existing customers that would signal some type of possible problem).
Also interesting that Sage Payments is growing like a weed. I believe they were up 15% and 40% of their revenues are from cross selling. Amazing what can happen when you actually have a product that integrates well (at least the integration to MAS).
Here's Sage's Narrative:
Total revenues from continuing operations in North America grew by 3%* to 390.9m (2010: 381.2m*), with organic revenue growth of 3%* (2010: 3%* contraction). Organic subscription revenues grew 4%* (2010: 1%* contraction), while organic software and software-related services revenues contracted by 3%* (2010: 8%* contraction).
The trading environment for SMEs in North America remains challenging, although we saw a good performance from certain leading products such as Simply and Accpac ERP and our payments business showed good growth of 15%*, helped by growth in volumes and over 40%* growth in the cross-sell of integrated payment solutions into our accounting base. Cross-sell now represents approximately a quarter of North American payments revenue. The market for certain other products, such as construction and CRM, remained challenging in the year.
From a strategic perspective, there have been significant developments in the year. In June 2011, we announced the adoption of one Sage brand in North America with our accounting and ERP product brands being replaced during 2012 and 2013. This will help us leverage the scale of our business and maximise the impact of our marketing. We have launched several connected services in the year, for example online tax filing, and we have a strong pipeline of online solutions to be launched in 2012. At the same time we have released major upgrades to our leading products, including Sage ERP MAS90 SQL and Sage HRMS with employee self-service.
In early 2011, following a strategic review, we evaluated that our Sage Healthcare business in North America was no longer core to our strategy. Consequently, in September 2011 we announced its disposal. This will allow us to focus on the substantial opportunity we have within our core North American business. The sale of Sage Healthcare completed in November 2011.
The EBITA margin for North America increased to 26% (2010: 24%*), with tight cost control in the year.
You can access the detailed reports on Sage's site:
http://www.investors.sage.com/reports_presentations/results_presentations/?year=2011