Shares plummeted 19 per cent on Friday morning before recovering to trade down 13 per cen
Shares in Sage are on track for their biggest one-day fall in 25 years after the accountancy software group warned that sales were lower than expected.
Shares plummeted 19 per cent on Friday morning before recovering to trade down 13 per cent.
Subscription growth for the company's software packages slowed to 25.3 per cent from 30.6 per cent and organic revenue rose 6.3 per cent in the six months to 31 March, down from 7.4 per cent in the same period in 2017.
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Sage – one of the UK's biggest technology firms – said recurring revenue growth slipped to 6.4 per cent while software and software related services (SSRS) grew 7.1 per cent.
The company performed worse than forecast in the Northern Europe and Africa and Middle East regions but registered double-digit growth in North America, while central Europe and Australia “performed well”.
“Growth in [the first half of 2018] was lower than our expectations as the pace of execution has been slower than we planned,” said Stephen Kelly, chief executive.
Sage will announce its full-year results on 2 May.
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Russ Mould, investment director at AJ Bell said Sage was now in the "unenviable" position of relying on a stronger second half of the year to meet its profit guidance.
"Often in this scenario a company fails to make up the shortfall, raising the sceptre of another warning down the line.," he said.
“The company is blaming the weaker than anticipated growth in recurring revenue and software subscriptions on operational issues.
“While in theory this means the company remains in control of its own destiny there is minimal detail on how these problems will be fixed, investors will be hoping for greater clarity when the company posts its first half results in May.”