Wednesday, 3 December 2008

Sage and its Boring Award

(By Richard Holway) As you will read below, Sage has just managed to retain its coveted Holway Boring Award with a pretty tight margin 3% growth in adjusted EPS in the year just ended. This was in a reasonably good year. But the outlook looks much more problematic. Indeed, George O’Connor of Panmure Gordon has just released a research note suggesting that Sage’s EPS could fall from 14.4p to just 12.5p next year. Of course there are a lot of things that could affect that – not least an acquisition, favourable currency exchange rates (highly likely unfortunately!) or (possibly if I was a cynic) a change in accounting policy. But there does now look like a possibility that Sage could lose its Holway Boring Award next year. I would be mighty sad if that happened.

The Holway Boring Award is given only to UK quoted SITS companies with unbroken EPS growth records over at least a 10 year period. Sage hasn’t had an EPS reversal since its 1989 IPO.

The only other current holder of the Boring Award is Capita (which likewise hasn’t had an EPS reversal since its 1989 IPO). Coincidently we visited Paul Pindar CEO of Capita yesterday in the run up to our new MarketViews report out in early 2009. We discussed both current trading and the 2009 outlook. Capita really is going great guns. I have absolutely no doubt that Capita will retain its Holway Boring Award for both 2008 and 2009. Indeed, Anthony and I will publicly “eat our hats” if I we are wrong.

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