For investors desperate for positive signs on Britain’s economic performance, today’s update from software giant Sage would have made cheerful breakfast reading.
The FTSE 100 company’s lifeblood is providing accounting software for small and medium-sized firms, many of which will have been dented as the Covid lockdown shuttered entire industries.
But Sage said it had experienced a lower-than-expected churn among such customers and, coupled with cost- cutting measures, it is in good shape, with access to £1.2 billion of funds.
Revenues in the nine months to June 30 rose 4.1% to £1.4 billion, aided by growth in North America and Northern Europe, where cloud contracts boosted recurring revenues.
The shares rose 4% to 736p, recovering to near pre-UK lockdown levels.
A discounted fundraising by housebuilder Countryside Properties was met with a share price fall, down 26.4p, or 7%, to 332.8p. It priced the placing, which raised £250 million, at 335p, a 6.7% discount to last night’s close.
The company, which was advised on the placing by Barclays and Numis, will use part of the funds to invest in its partnerships arm that creates affordable homes for housing associations, councils and the private rented sector.
Chief executive Iain McPherson said the proceeds will also be used on speeding up the completion of projects, including on a number of London sites.
Outsourcer G4S was also making gains — up 6% to 145p. The company has put its dividend on hold and earlier this month revealed it plans to cut 1,100 jobs. But it struck a more upbeat tone today, posting a 4.6% fall in first-half profits to £187 million, outstripping analysts’ expectations. G4S is moving away from cash handling — amid weak demand for physical money — to focus on its security arm.
Shares in kitchens supplier Howden Joinery were off 2% at 544p as it swung to a first-half loss and said it was cautious on its financial outlook.
Small-cap spotlight
Oil tiddler Mosman is following the trend set by the majors, hanging on to cash and cutting back exploration. Chairman John Barr told the market today: “The current pandemic and the oil price fluctuations have all resulted in Mosman focusing their attention and operations on cashflow and costs rather than maximising production.” The company’s production levels are down sharply in the half year. The shares edged up slightly on AIM to stand at 0.11p.
