- Software company Sage Group booked a 9.3% fall in annual profit as rising revenue was offset by higher expenses, including staff pay.

Pre-tax profit for the year through September fell to £361m, down from £398m on-year.

Revenue rose 4.9% to £1.94bn and underlying operating profit fell 12% to £448m amid a 4.0 percentage point fall in the company's underlying operating margin to 23.1%.

Sage said the decline in margins reflected increased investment to accelerate strategic execution, combined with 'increased colleague variable compensation'.

The company said it would return £250m following the disposal of Sage Pay, with more details to be announced at the completion of that deal.

For the 2020 financial year, Sage said it expected recurring revenue growth of 8-9%. Other revenue -- including SSRS and processing -- was expected to decline by high single-digits.

The company' sorganic operating margin was expected to be around 23%, as Sage continued to invest in a transition to software-as-a-service (SaaS).

'We're very encouraged by the acceleration in recurring revenue in the 2019 financial year,' chief executive Steve Hare said.

'We will continue to prioritise high quality recurring revenue growth over SSRS, and whilst we do not expect a linear progression in financial performance during this multi-year transition, our recent strong performance and continued progress towards becoming a great SaaS company means that we look forward with confidence.'

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