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Sage Group PLC on Wednesday reported strong annual revenue growth, lifting its share price, though the accounting software firm saw profit slip.
Sage hiked its annual dividend by 4.1%.
Sage shares were up 5.8% at 799.40 pence each on Wednesday morning in London, making them the best performer in the FTSE 100 in early trade. The index itself was up just 0.2%.
In the financial year that ended September 30, the enterprise software company posted a pretax profit of £337 million, down 2.9% from £347 million the previous year.
Underlying operating profit amounted to £383 million compared to £353 million the year before, representing a margin of 19.4%, down from 19.6%.
Revenue, however, rose 5.4% to £1.95 billion from £1.85 billion. The growth was underpinned by its Sage Business Cloud arm, which reported 24% revenue growth on an organic recurring basis.
Chief Executive Officer Steve Hare said: "We significantly accelerated revenue across all key products and regions, expanded our organic operating margin and delivered strong cash flow. ARR growth of 12%, underpinned by increasing levels of new customer acquisition, is particularly encouraging and positions us well for the year ahead."
Sage declared a full year dividend of 18.40 pence per share, up 4.1% from 17.58p a year prior. This was on a final dividend of 12.1p per share, also up 4.1% from 11.63p.
Net debt amounted to £733 million on September 30, up from £247 million a year before. The increase in debt was mostly due to £315 million spent on acquisitions.
Looking ahead, Sage said it entered its new financial year with "strong momentum" and said it expects organic recurring revenue growth to be ahead of last year thanks to the strength of Sage Business Cloud, as well as expecting operating margins to trend upwards in financial 2023.
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