Revenues for Sage’s North America division were down 10% as reported by Sage UK today. The breakout included a 2% decline in support, an 8% organic revenue decline and 23% decline in a category only described as software related services.
Here’s the wording from the Sage UK site:
http://www.investors.sage.com/news/regulatory_announcements/?id=55685
North America
Total revenues in North America contracted 10%* to £576.4m (2008: £637.3m*), reflecting the difficult economic conditions. Organic revenue contracted 8%*. Organic subscription revenues declined 2%*, while organic software and software-related services revenues declined 23%*.
Phase 1 of the changes to our North American business has been successfully completed with the new management team in place and an appropriate reduction of the cost base. Operational improvements planned in Phase 2 are underway including reinvigoration of the channel, growth in premium support offers and several product launches. We are making good progress in these areas and have seen increases in customer satisfaction scores across our product lines.
Sage North America is organised into 3 divisions, Sage Business Solutions Division (“SBS”), Sage Payment Solutions Division and Sage Healthcare Division. SBS declined organically 11%*, the downturn particularly impacting our mid-market accounting products, CRM products and Sage Timberline Office which serves the construction industry. Our entry-level accounting products (Peachtree and Simply) delivered resilient performances with continued growth of Peachtree Quantum. Non-Profit Solutions performed well in the challenging market conditions and grew modestly. Sage Payment Solutions Division saw a 15% increase in the number of merchants served but lower volume per merchant leading to a fall in revenue of 4%*. Payments revenue from cross-sell to our existing customers grew, from a small base, by over 100%* in the year and we regard this as a substantial future opportunity for Sage.
Sage Healthcare Division has improved its EBITA† margin in the year to 17% (2008: 8%*). We have improved customer service levels and so reduced customer losses in our Medical Manager base. Although Healthcare revenues declined overall by 5%*, revenue from the Intergy product line, including Electronic Health Records (“EHR”) capability, grew by 13%* to £71.2m. Intergy, with its accredited, market-leading EHR solution, is well positioned to benefit from incentives within the American Recovery and Reinvestment Act for the adoption of EHR.
The EBITA† margin of Sage North America, including restructuring charges of £10.7m incurred in the year, was 18% (2008:18%*). Excluding restructuring charges, it was 20%.
The full results are available on the Sage UK site here.
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