Sage H1 Results – good cross-selling but slower growth

Sage Pay’s half year results demonstrate that it continues to prosper although there may be signs that momentum is slowing.

Revenue grew 11% to £17m, continuing the positive long term trend that has seen the business grow strongly alongside the e-commerce explosion over the past five years. Management pointed out that the £17m figure was flattered by c.£1m in one-off hardware sales and that organic growth was closer to 5%. This compares to annualised increases of up to 25% reported in previous years. Clearly, growth rates diminish as businesses get larger but Sage Pay remains focused on SME clients at a time when the major market expansion is in enterprise and in-app payments.

Sage Pay revenue (£m)
Sage Pay revenue (£m) – Barraclough & Co derived from Sage Pay accounts

Sage’s new management is reportedly keen to bring the sometimes disparate family of Sage businesses together so it’s interesting to watch the only Sage Pay KPI that makes it into the group results pack. This is the number of customers that take integrated payments – defined as having a core accounting package from Sage integrated with the Sage Pay gateway.

There is real value for customers in taking the integration – the gateway automatically loads e-commerce transactions into Sage and creates and updates customer records. The number of customers taking integrated payments grew by 9% to 16,600 – a very respectable performance – and a rare example of a genuinely useful integration of payments-derived data into a business process.

Number of Sage accounting customers with integration to Sage Pay
Number of Sage accounting customers with integration to Sage Pay. Barraclough & Co derived from Sage Pay accounts.
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