Peachtree 2007 Annual Report Download

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Results for the year ended
30 September 2007

Table of contents

  • Page 1
    Results for the year ended 30 September 2007

  • Page 2
    Results to 30 September 2007 Overview of the year Financial and regional review Business review and outlook Questions 2

  • Page 3
    ... year • • • • Successful year - Good growth driving strong cash flow Solid growth across the Group - UK, Mainland Europe and Rest of World reported excellent results - North America mixed performance, but profitable and still growing Six principal acquisitions made to November 2007 Customer...

  • Page 4
    Financial highlights Full year to 30 September 2007 Revenue EBITA†Operating cash flow/EBITA Adjusted earnings per share^ Dividend per share £1,157.6m £283.2m 112% 13.34p 7.00p 30%* 20%* 13% 95% *At constant exchange rates †Earnings before interest, tax, amortisation of intangible fixed ...

  • Page 5
    Double digit growth in adjusted earnings per share *EPS after neutralisation of foreign 14.00 exchange movements EPS 1994-2004 under UK GAAP EPS 2005-2007 under IFRS +13%* +20% 12.00 +13% +21% 10.00 EPS (pence) +11% 8.00 6.00 4.00 2.00 0.00 2003 2004 2005 2006 2007 5

  • Page 6
    ... strategy Company Protx Snowdrop KCS* XRT Pro-Concept Creative Industry specialism Payment processing services HR and payroll HR and payroll Treasury and cash management Accounting: mid-market HR and payroll Country UK UK UK France, Spain, South America Switzerland Singapore, Malaysia Enterprise...

  • Page 7
    Financial review

  • Page 8
    Total revenue 30% increase in total revenues 7% organic growth Organic Non-core Acquisitions / disposals £1,200m 26% contribution from 2006/2007 acquisitions Non-core 2% of revenues £1,100m £1,000m £900m £800m £700m £600m £500m £400m £300m £200m £100m £0m +30% 302 92 27 27 ...

  • Page 9
    ... related services Other services Organic revenue growth 9% £1,200m £1,100m £1,000m £900m £800m £700m £600m £500m £400m £300m £200m £100m £0m 29 102 +7% 3% 712 555 62% 61% Software related services +9% Software +4% 308 35% 344 30% 2006 £m at constant exchange rates 2007 9

  • Page 10
    ... acquisition 30% 0% -3% 0% 25% 20% 15% 27% 10% 27% 24% 5% 0% FY06 excl FY07 excl acqn acqn Verus Emdeon Adonix FY07 actual †Earnings before interest, tax, amortisation of intangible fixed assets and prior year gain on disposal of £2.7m in North America At constant exchange rates 10

  • Page 11
    ... disposal Stock compensation 1.8 8.8 Tax Net capex (66.1) (37.9) (95.3) (49.0) Working capital change (13.0) Forex 33.3 Deferred income change 16.4 Share issues 15.0 Exchange differences Cash flow from operations Cash:profit conversion (1.9) 317.1 112% Free cash flow Interest cover 182...

  • Page 12
    Regional review

  • Page 13
    Organic revenue growth trends % growth on prior year at constant exchange rates 2006 2007 20% 15% 10% 5% 7% 7% 0% 5% 10% 6% 4% 17% 17% 7% 7% UK Mainland Europe North America Rest of World Total 13

  • Page 14
    ... - Successful launch of 1st integrated - product suites Strong growth in HR and payroll products Excellent growth in CRM products £204m £224m • • • - 3 acquisitions completed - Protx - Snowdrop - KCS (completed after the year-end) EBITA margin 37% (2006: 37%) Strong, sustainable business...

  • Page 15
    ... acquisitions completed - Pro-Concept - XRT EBITA margin 23% (2006: 22%) - Strong contribution from Spain and Germany/Switzerland £296m £349m • • • 22% margin 2006 Revenue EBITA 23% margin 2007 One-off tax change stimulus contributed to 2007 results At constant exchange rates 15

  • Page 16
    ...by Peachtree upgrade and ACT! corporate licences £329m £508m Mid-Market Division +4% - Improvement in H2 to 5% - Good H2 performances from Timberline, Nonprofit , ACCPAC and in CRM Reorganisation of operating divisions initiated to improve customer focus Change in North American head office team...

  • Page 17
    North American relative organic revenue growth % growth on prior year at constant exchange rates H1 FY07 H2 FY07 FY07 5% 5% 0% 0% 3% 3% 5% 4% 4% 3% 4% Small Business Division Mid-Market Division Total North America 17

  • Page 18
    ... in Healthcare margins to 7% Investment required in 2008 to drive sustained organic growth in North America 20% 15% 23% 10% 23% 20% 5% 0% FY06 excl acqn FY07 excl acqn Verus Emdeon FY07 actual †Earnings before interest, tax, amortisation of intangible fixed assets and prior year gain...

  • Page 19
    ... in both licence and support contracts £63m £76m - Expansion of HR and payroll offering • • • Acquisition of Creative - Leading HR and payroll supplier in Singapore and Malaysia 26% margin 2006 Revenue EBITA 26% margin 2007 EBITA margin 26% (2006: 26%) Growth sustainable through...

  • Page 20
    Business review and outlook

  • Page 21
    Sage's guiding principles drive performance Simplicity Agility Innovation Integrity Trust 21

  • Page 22
    North America's growth Historic revenue and EBITA 500 Revenue £m 400 EBITA £m 300 200 100 0 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 22

  • Page 23
    ... growth Improve the customer experience in sales and service support - - "Help our customers manage their businesses better" Sell more effectively to our 2.8m customer base • Launch and support product suite solutions - - Proven demand in our other markets Competitive advantage is our broader...

  • Page 24
    ...Improve network services (insurance claims service) Improve quality of support service Refocus on re-engaging with our 20,000 customers and Medical Manager customers Improve efficiency of professional services (installation & hardware) • Still convinced of the strong potential of this market At...

  • Page 25
    Sage Payment Solutions Division (formerly Verus) • • • Strong performance over the year - Revenue growth +14% - Margins improved to 42% Integration into Sage products well advanced - Sage Healthcare and Peachtree completed - MAS integration completed by Q1 FY08 - Simply, ACCPAC, Timberline ...

  • Page 26
    ...growth Taking the lead in product suites solutions Successful expansion of product offering into HR and payroll, CRM Continual innovation in service offering Mainland Europe +10% organic growth • • • France: mid-market reorganisation/Sage 100 driving growth Germany/Switzerland: benefit...

  • Page 27
    Competitive landscape Entry-level Mid-market Enterprise Customer base* Sage Intuit Microsoft SAP Oracle Exact MYOB NetSuite SF.com 5,500,000 3,800,000 270,000 33,400 275,000 180,000 500,000 5,400 38,100 * Mixture of Sage Forecasts and market statistics 27

  • Page 28
    Support contracts thousands 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Sept 03 UK Sept 04 Mainland Europe Sept 05 North America Sept 06 Rest of World 28 Sept 07

  • Page 29
    Continued growth in annual combined contracts 2000 2007 Combined support contract revenue 20% Combined support contract revenue 59% Standard support contract revenue 80% Standard support contract revenue 41% At constant exchange rates 29

  • Page 30
    Hybrid technology model evolving Web Future Software as a Service Current desktop solutions Greater functionality Customisation Secure, on-premise Transitional hybrid model Sage 50 Accounts Professional Online Accpac ERP SageCRM.com 30

  • Page 31
    Changing shape of our customer base 2000 4% 4% 6% 2007 4% 12% 48% 30% 92% Accounting Industry-specific HR and Payroll CRM Payment processing 31

  • Page 32
    Outlook Another successful year - scale of our business substantially increased All our regions well-positioned for further growth - Three regions reported excellent and sustainable results - Clear strategy and objectives set for improving North America Financial strength and stable cash flows ...

  • Page 33
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  • Page 34
    Supplementary information

  • Page 35
    ..., Pro-Concept, Snowdrop, Creative, XRT) less 2007 disposals (Hardware division Logic Control) less 2006 acquisitions (Adonix, Verus, UBS, Master Builder, Elit, Bäurer, Emdeon) less 2006 disposal (CPASoftware) less contribution of non-core products 2007 £m 1,157.6 1,157.6 (11.8) Growth % 24% 935...

  • Page 36
    Operating profit by region £m 2007 EBITA pre share-based payment Share-based payment Earnings before interest, tax and net amortisation (EBITA) Amortisation of acquired intangible assets Capitalisation of software development UK 85.4 (2.8) 82.6 (1.5) - Mainland Europe 82.6 (2.0) 80.6 (9.1) - ...

  • Page 37
    UK Revenues Software Software related services Other services Total Profit EBITA EBITA margin £82.6m 37% £91.7m £128.8m £3.6m £224.1m Support contracts New support contracts Total support contracts 12,000 363,000 Total customers 741,000 Customers* New customers 40,000 * Excluding ACT! 37

  • Page 38
    Mainland Europe Revenues Software Software related services Total £101.1m £248.0m £349.1m Total customers 1,502,000 Customers* New customers 87,000 Profit EBITA EBITA margin £80.6m 23% Support contracts New support contracts Total support contracts 53,000 569,000 * Excluding ACT! 38

  • Page 39
    North America Revenues Software Software related services Other Total Profit EBITA EBITA margin £100.0m 20% £121.6m £288.3m £98.2m £508.1m Support contracts New support contracts Total support contracts (2,000) 598,000 Total customers 2,871,000 Customers* New customers 147,000 * Excluding ACT!...

  • Page 40
    ... new operating divisions Small Business and MidMarket accounting, ERP, CRM Business Management Division 45% FY07 revenue Industry-specific solutions and human resource management Industry and Specialised Solutions Division 15% FY07 revenue Emdeon Practice Services Sage Healthcare Division...

  • Page 41
    Rest of World Revenues Software Software related services Total £29.2m £47.1m £76.3m Total customers 442,000 Customers* New customers 45,000 Profit EBITA EBITA margin £20.0m 26% Support contracts New support contracts Total support contracts 27,000 119,000 * Excluding ACT! 41