Thursday, 11 October 2007

Sage - "Shooting the top dogs"

Sage has announced that the CEO and CFO of its US operations - Ron Verni and Jim Eckstaedt respectively- have left the company with immediate effect. "Following a review of its North American business, the board has concluded that a change in leadership is required to realise the full potential of this business." This is, of course, hot on the heels of similar management changes at Sage's US healthcare operations.

Elsewhere in the today's statement, expectations for FY07 seem to be at (or marginally below) expectations with revenues of £1158m. Outside the US, things seem to be progressing satisfactorily. But, as others point out, what happens in the US is critically important for Sage as it represents c44% of total sales.

The market really didn't like all this and Sage shares are down 5% today as I write. Indeed, Sage has been an underpreformer this year. Down 12% in 2007 to date against a tech market which has experienced double digit rises (NASDAQ up 15%, Techmark up 14%)

As readers know, Sage is one of only two Holway Boring Award holders. But maybe that's the problem. Maybe Sage has just got tired. Maybe it needs a bigger 'kick up the backside'. Maybe it would be better to court a bid or partnership - particularly one that would sort out the all-important US operations? Sage has such potential. It is the one and only flagbearer of software in the FTSE100. The country and Sage deserves better!

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