Shares in Sage have increased by almost 20% after the accounting software firm published its full-year results.

In the year to 30 September, the firm’s statutory operating profit increased by 43% to £452m, which it has attributed to "strong growth in underlying operating profit, lower M&A-related expenses and the non-recurrence of prior year restructuring charges".

Its revenue jumped by 7% in the same period to £2.33bn, stating that this reflected the "strength" of its subscription-based recurring revenue model.

Furthermore, Sage’s EBITDA increased by 16% to £622m, with margin increasing by 160 bps to 26.2%.

Chief executive officer at Sage, Steve Hare, said: "Sage has delivered another successful year, achieving strong, broad-based revenue growth together with significantly higher profits and cash flows. We also invested further in our products and continued to execute well against our strategic priorities.

"Our high pace of innovation continues, as we enhance existing products and expand key cloud solutions throughout our markets.

"Small and mid-sized businesses remain resilient, despite the ongoing macroeconomic uncertainty, and they continue to choose Sage to help them become more productive and efficient."

As part of the results, the firm stated that it was launching a £400m share buyback scheme, which it said reflected its "strong cash generation, robust financial position and the board’s confidence" in its future prospects.

Looking ahead to the 2025 financial year, Sage said it expects organic total revenue growth of 9% or above in the full year, with operating margins expected to “trend upwards” in the current financial year and beyond.

Investment director at AJ Bell, Russ Mould, concluded: "Accounting software may not be the most exciting corner of the tech industry but Sage’s results have certainly fired the imagination of investors today. The meaningful increase in full-year profit and revenue announced today has a cherry on top in the form of a large share buyback, underpinned by the group’s strong cash generation.

"The business is performing strongly thanks to greater uptake of its cloud-based products and the market will be encouraged to see the group making progress across all geographies.

"The one concern for the company, whose client pool is largely made up of small and medium-sized businesses, is a downturn in the economy might disproportionately affect them. However, for now Sage says they remain resilient."

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