Peachtree 2012 Annual Report Download - page 5

Chairman’s statement
have been clear that it will take time for the strategy to bear
fruit fully, it is also clear that the foundations are in place and that
momentum has been established. It is not easy to make
changes of this magnitude at a time of economic uncertainty,
and I recognise the courage and commitment of everyone
involved in driving the business forward on this important journey.
Elsewhere in this Report, the Chief Executive will set out progress
against the strategy. A focus on shareholder returns is at the heart
of the strategy and the work of the Board. The Board believes
that high-quality and sustainable long-term revenue and earnings
growth, combined with a disciplined approach to capital allocation,
should drive superior returns for shareholders. Sage has a sound
reputation for capital allocation discipline and the Board will
continue to ensure such discipline is maintained.
Expectations about the value added by Boards are rightly high.
There is much debate about corporate governance; good
corporate governance is about helping to run the Company well
and the exercise of a mindset to do what is right. A successful
Board requires the right interaction between individuals and a
mixture of skills and outlooks that brings balanced judgements
and the ability to rise above the day-to-day detail. The Board sets
the tone for the Company.
As to our Board itself, the past year has seen some important
changes. In September 2012, Tony Hobson retired from the Board.
Tony joined the Board in 2004, acting as Chairman since 2007. He
made a considerable contribution to Sage, particularly as Chairman
and in helping Guy to transition to the CEO role and to cement his
senior team. David Clayton, formerly Group Director of Strategy
and Corporate Development, retired from the Board at the Annual
General Meeting in February 2012. David had been on the Board
of Sage in both non-executive and executive roles since 2004,
providing great authority and experience and making a signicant
contribution to the success of Sage in recent years. We wish both
Tony and David well.
Sage remains in a strong position to weather any economic storms
and to take advantage of the compelling opportunities to deliver
accelerated growth from our core business. Whilst much remains
to be done, a continued focus on disciplined execution means we
can look forward to the future challenges and opportunities with
increased condence and optimism.
On behalf of the Board, I would like to thank Guy and all of our
people for their dedication and focus on our commitment to
performance improvement and value creation for shareholders.
This is my rst report as your Chairman and I am pleased to report
that the Group performed creditably in the past year in the face of
an economic backdrop which remained difcult and uncertain in
many of our major markets. I have been impressed by the strong
fundamentals of Sage’s business: our unmatched footprint with
small to medium sized companies, the recurring nature of our
revenues and strong cash generation. Above all, it is the strength
of our relationship with our customers and partners, and our ability
to meet their needs, which differentiates us in the market and
provides us with signicant opportunities to grow.
A feature of the year has been continued good progress in driving
recurring revenue and I am encouraged by the progress made with
our initiatives to develop more active relationships with our
customers. Embedding more valuable support contracts or
integrating a payment solution with the core accounting function
are important examples but there is considerable opportunity to
continue to improve the value of our relationship with our customers.
A key characteristic of this relationship is giving our customers the
condence to achieve their business ambitions. The importance
of this is amplied in a climate that makes such condence fragile.
The resilience of our performance demonstrates the value we add
to customers through the products, services and support we
provide to them. It is also testament to the quality of our people
and the quality of what they do and it is important to recognise the
excellence of our employees who help to support our customers.
We know how our business performs in the face of challenging
markets and we will make business decisions appropriately. We are
condent in our ability to grow recurring revenue strongly in all but
the most severe of economic headwinds whilst we recognise that
growth in licence revenue remains more closely linked to GDP
growth. In the current environment, this means we can continue
to invest in our strategic initiatives with condence. I am pleased
to report that we have done so during the year, not least with our
signicant investment in Brazil and in our technology priorities
such as Sage One, hybrid cloud and Sage ERP X3. Importantly,
we have made this investment whilst maintaining margins,
demonstrating our relentless focus on the judicious use of capital
and disciplinedexecution.
I believe this is an exciting time in the corporate evolution of Sage.
The leadership team at Sage, ably led by Guy Berruyer, is focused
on delivering a step-change in the level of growth and in the quality
of revenue driving growth. Since joining the Board, I have been
struck by the determination and focus across the business to
execute the plans to deliver the full potential of Sage. Whilst we
The Sage Group has again delivered
a solid performance in the face of an
economic backdrop which remained
dicult and uncertain in many of our
major markets
Overview
Performance
GovernanceFinancial statements
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The Sage Group plc | Annual Report & Accounts 2012