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MARKET REPORT: Sage predicting a bumper 2021

MARKET REPORT: British software giant Sage predicting a bumper 2021 as companies emerging from pandemic invest in technology again

British software giant Sage is predicting a bumper 2021 as companies emerging from the pandemic invest in technology again. 

The FTSE100 firm, which specialises in accountancy systems, said small and medium-sized customers are beginning to spend as the economy bounces back. 

Many pressed pause on big spending decisions during the Covid-19 crisis in an effort to conserve cash. 

But Sage boss Steve Hare said customers were now opening their wallets again. 

‘There is definitely a sense of optimism,’ he said. ‘Customers have the confidence to invest in technology again. 

‘We believe that small and medium-sized businesses will lead the recovery.’ 

Sage is now predicting that full-year sales growth will be at the top end of its 3-5 per cent forecast, following a strong first half. 

The upbeat announcement sent shares surging almost 4 per cent higher in early trading. The stock finished up 3.8 per cent, or 23.8p, at 647.4p. It came as Sage said revenues fell 4 per cent to £937m in the six months to March 31. Profits tumbled by 31 per cent to £190m, but this was largely due to the company benefitting from the one-off sale of its Sage Pay division last year. 

Sage said annualised recurring revenues – a key measure it wants to grow by selling software subscriptions – rose 4 per cent to £1.6billion. 

Analysts at Morgan Stanley said the results showed ‘the business is re-accelerating’. 

Elsewhere, fellow Footsie constituent M&G was one of the day’s top risers again as reports continued to swirl that rival Schroders had mulled taking it over. 

Schroders was reportedly put off by M&G’s resurgent share price, which made a deal too pricey. 

Yet the asset manager’s shares climbed 3 per cent, or 6.9p, to 236.1p – presumably putting it even further out of reach. 

Fellow money manager Standard Life Aberdeen, which is due to rebranded as ‘Abrdn’, was also up 3.2 per cent, or 8.4p, at 271.4p. 

It was a good day for the FTSE100 on the whole. The blue-chip index rose 1.2 per cent, or 80.28 points, to 7043.61, although that was still lower than last Friday’s close after a week in which stocks have been battered by inflation fears. 

The FTSE250 index of mid-sized companies rose 1.2 per cent, or 266.79 points, to 22,336.1, which was also down on last week. 

Mining giant Rio Tinto fell 2.7 per cent, or 169p, to 6135p amid falling copper prices, while rival Antofagasta fell 2.2 per cent, or 39.5p, to 1778.5p. 

Stationery retailer The Works was down 3.6 per cent, or 2.6p, at 70.1p after its sales were hit by the coronavirus crisis. In a trading update, the firm said total sales fell 19 per cent to £206.2m in the 53 weeks to May 2, blaming government restrictions and the resultant drops in visitor numbers. 

The company said this had been partly cushioned by surging sales online and strong demand when shops reopened but this was not enough to compensate fully for weeks of closures. 

Since shops reopened in April, The Works said sales had been ‘very encouraging’ but that it was too early to judge whether they would continue at current levels. 

The Works said it had slashed costs and used government Covid support schemes so its finances were in a strong position, with £30m of headroom. 

Property developer Crest Nicholson rose 1.6 per cent, or 6.6p, to 427.8p after announcing the sale of its interest in a Surrey film studio. 

Longcross Studios, a former Ministry of Defence site, has been used to make films such as Thor: The Dark World, Fast & Furious 6 and World War Z. 

Crest said it was selling its 50 per cent share in the studios to asset manager Aviva for £45m.

Read more at DailyMail.co.uk