Thursday, 4 December 2008

Sage might still be Boring afterall

(By Richard Holway) We are pleased to hear that Paul Walker (CEO of Sage), after being questioned on the subject at yesterday’s analyst briefing, says that the Holway Boring Award is very important to him and he has been a supporter of the Boring Awards since inception.

Although “preparing for a tough 2009 after advising the market that its sales will not grow next year, and ruling out further acquisitions until 2010” it looks as if currency will save the Boring Award for Sage next year. I quote from Nick Hyslop’s research note (RBC) yesterday “With over 80% of sales outside the UK, Sage will benefit from the relative decline of Sterling against the US$ and the EUR. Using an average rate of 1.65 US$ to GBP for 2009 gives a 19% boost to the US $ revenues in 2009.” Mainly for this reason, Nick is forecasting EPS will rise from 14.4p (2008) to 15.59p (2009). If so, Sage will retain its Holway Boring Award.

Whatever, this does all show what a difficult market we are in. Sage is undoubtedly a bellwether for the ‘business software to SMEs’ part of the market. That bellwether is signalling really tough times ahead.

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