# Sage Group (SGE.LSE)

Canonical: https://gigainvestors.com/s/SGE.LSE

Analysis as of: 2026-10-16T07:35:21.146Z. Financial observations: FY1996–FY2025.

Listing currency: GBX. Reporting currency: GBP.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: GBX 1,133.50 per share; close as of 2026-10-15.

Estimated value: low GBX 528.03 per share, central GBX 593.67 per share, high GBX 681.05 per share. Buy at or below the central value GBX 593.67 per share. Valuation as of 2026-10-16T07:35:21.146Z; scenarios are not confidence intervals.

Expected annual return: 6.4% at the stated quote. About 6.4% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; GB 10-year bond 5.4% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.18×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.27×

- FY2017: 0.26×

- FY2018: 0.25×

- FY2019: 0.22×

- FY2020: 0.20×

- FY2021: 0.18×

- FY2022: 0.17×

- FY2023: 0.14×

- FY2024: 0.21×

- FY2025: 0.22×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 14.5%

- ROIC, second-lowest year: 9.9%

- Typical minus recent gross margin: -0.1 pp

- Typical gross margin (annual median): 89.0%

- Recent gross margin (lower of latest and 3-year median): 89.1%

- Years with nonpositive capital: 10

- Capital spending / revenue: 1.6%

- ROIC including acquisitions, ten-year median: 16.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 18.2%

- FY2017: 15.5%

- FY2018: 15.1%

- FY2019: 13.5%

- FY2020: 11.9%

- FY2021: 14.0%

- FY2022: 9.9%

- FY2023: 8.8%

- FY2024: 15.6%

- FY2025: 18.6%

### economics: pass

- Owner earnings / net income, 5-yr: 1.12×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: GBP 1.6B

- Net income, five-year total: GBP 1.4B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -2.4 pp

- Working capital / revenue, change between three-year averages: -17.0 pp

- Working capital / revenue, final three-year average: 5.7%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.04×

- FY2022: 1.10×

- FY2023: 1.33×

- FY2024: 1.13×

- FY2025: 1.08×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2025 (8 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 15.5% vs 15.6%

- Per-share earnings: 0.19 to 0.32 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.0%

- Ordinary dilution, 5-year annual growth: -2.4%

- Market cap gain: GBP 3.2B

- Cumulative retained earnings: GBP 114M

- Diluted shares, 10-year annual growth: -1.0%

- Diluted shares, 5-year annual growth: -2.4%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 6.5%

- Per-share value change: GBP 0.13

- Per-share value, starting three-year median: GBP 0.19

- Per-share value, ending three-year median: GBP 0.32

- Buybacks concentrated in cheaper years (correlation): 0.11

- Average buyback yield: 2.5%

- Buyback history: 7 years

- Debt-funded buybacks: Yes

- Acquisition spending: GBP 2.7B

- Cumulative net income, 10 years: GBP 2.8B

- ROIC, first three-year median: 15.5%

- ROIC, last three-year median: 15.6%

Chart: Earnings per share; fiscal year observations.

- FY2016: GBP 0.19

- FY2017: GBP 0.25

- FY2018: GBP 0.27

- FY2019: GBP 0.24

- FY2020: GBP 0.28

- FY2021: GBP 0.26

- FY2022: GBP 0.25

- FY2023: GBP 0.20

- FY2024: GBP 0.32

- FY2025: GBP 0.38

### accounting: pass

- Sloan accruals: -4.3%

- Receivables to sales index (DSRI): 0.94×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 9.7%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.43×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 3.37×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -2.9%

- FY2017: -0.8%

- FY2018: -3.0%

- FY2019: -6.1%

- FY2020: -2.6%

- FY2021: -2.7%

- FY2022: -0.6%

- FY2023: -4.5%

- FY2024: -4.6%

- FY2025: -4.3%

## Holders

## Price story

Price needs cash profits to grow 9.6% a year for ten years · sales +7.8%

Story as of 2026-10-16T10:00:04.576Z; price observation 2026-10-15.

Price needs cash profits to grow 9.6% a year for ten years

### Sales · FY2024–2025

sales +7.8%; source https://filings.xbrl.org/2138005RN5XYLTF8G138/2025-09-30/ESEF/GB/0/2138005RN5XYLTF8G138-2025-09-30/reports/2138005RN5XYLTF8G138-2025-09-30-T01.xhtml; observed 2025-12-03.

- FY2016: GBP 1.4B 

- FY2017: GBP 1.7B 

- FY2018: GBP 1.8B 

- FY2019: GBP 1.9B 

- FY2020: GBP 1.9B 

- FY2021: GBP 1.8B 

- FY2022: GBP 1.9B 

- FY2023: GBP 2.2B 

- FY2024: GBP 2.3B 

- FY2025: GBP 2.5B 

### Gross margin · FY2025

gross margin 89.1%; source https://filings.xbrl.org/2138005RN5XYLTF8G138/2025-09-30/ESEF/GB/0/2138005RN5XYLTF8G138-2025-09-30/reports/2138005RN5XYLTF8G138-2025-09-30-T01.xhtml; observed 2025-12-03.

- FY2016: 90.2% 

- FY2017: 90.0% 

- FY2018: 89.3% 

- FY2019: 88.8% 

- FY2020: 86.9% 

- FY2021: 88.2% 

- FY2022: 87.9% 

- FY2023: 92.9% 

- FY2024: 88.7% 

- FY2025: 89.1% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software application; annual sales are GBP 2.5 billion.

- Source: https://filings.xbrl.org/2138005RN5XYLTF8G138/2025-09-30/ESEF/GB/0/2138005RN5XYLTF8G138-2025-09-30/reports/2138005RN5XYLTF8G138-2025-09-30-T01.xhtml (filed 2025-12-03); FY2025: revenue 2513000000; grossProfit 2240000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SGE.LSE: The Sage Group plc, together with its subsidiaries, offers technology solutions and services for small and medium businesses in North America, Europe, the United Kingdom, Ireland, Africa and Asia-Pacific. It offers Sage Intacct, cloud accounting and financial management software for mid-sized and growing businesses; Sage People, an integrated HR and Payroll solution; Sage 200, a scalable management solution; Sage X3, a flexible, intuitive, and tailored business solution; Sage Accounting, a cloud software for managing invoicing, cash flow, tax, and more, from anywhere. Ideal for small businesses; Sage Payroll for start-ups and small businesses manage their payroll; and Sage HR for small and mid-sized businesses for record management, leave management, staff scheduling, and expenses services. The company also provides Sage 50 accounts, that manages accounting, inventory, and payments, as well as Sage 50 payroll. The Sage Group plc was formerly known as Ployfinal Public Limited Company and changed its name to The Sage Group plc in September 1988. The company was founded in 1981 and is based in Newcastle upon Tyne, United Kingdom.

### Why customers stay

Margins ranged from 88.7% to 92.9% during 2023–25; it earns 14.5% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); FY2023: grossProfit / revenue = 92.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); FY2024: grossProfit / revenue = 88.7%.

- Source: https://filings.xbrl.org/2138005RN5XYLTF8G138/2025-09-30/ESEF/GB/0/2138005RN5XYLTF8G138-2025-09-30/reports/2138005RN5XYLTF8G138-2025-09-30-T01.xhtml (filed 2025-12-03); FY2025: grossProfit / revenue = 89.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); 10-year return on capital observations [[2016,0.18194992678020377],[2017,0.15472310475142778],[2018,0.1510108371036678],[2019,0.1354178747883371],[2020,0.1189082119525179],[2021,0.1395186945619222],[2022,0.09868536590063709],[2023,0.08847278129193023],[2024,0.15592213678250205],[2025,0.1857077637061029]]; median 0.14526476583279502. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back GBP 605 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); FY2016: growth capex 0; upkeep 23000000; owner earnings 235000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); FY2017: growth capex 0; upkeep 30000000; owner earnings 303000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); FY2018: growth capex 0; upkeep 20000000; owner earnings 343000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); FY2019: growth capex 0; upkeep 27000000; owner earnings 320000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); FY2020: growth capex 0; upkeep 40000000; owner earnings 371400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); FY2021: growth capex 0; upkeep 56000000; owner earnings 296000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); FY2022: growth capex 0; upkeep 52000000; owner earnings 286000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); FY2023: growth capex 0; upkeep 22000000; owner earnings 279800000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); FY2024: growth capex 0; upkeep 37000000; owner earnings 364000000. Growth capex / owner earnings = 0.

- Source: https://filings.xbrl.org/2138005RN5XYLTF8G138/2025-09-30/ESEF/GB/0/2138005RN5XYLTF8G138-2025-09-30/reports/2138005RN5XYLTF8G138-2025-09-30-T01.xhtml (filed 2025-12-03); FY2025: growth capex 0; upkeep 41000000; owner earnings 397400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); Dividend observations: [[2016,144800000],[2017,157000000],[2018,171000000],[2019,181000000],[2020,186000000],[2021,189000000],[2022,183000000],[2023,190000000],[2024,199000000],[2025,207000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://filings.xbrl.org/2138005RN5XYLTF8G138/2025-09-30/ESEF/GB/0/2138005RN5XYLTF8G138-2025-09-30/reports/2138005RN5XYLTF8G138-2025-09-30-T01.xhtml (filed 2025-12-03); FY2025: cash repurchases 605000000 GBP.

### Are managers owners

Insiders own 0.9% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SGE.LSE SharesStats.PercentInsiders = 0.8710000000000001 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 9.6% yearly over ten years; actual growth was 6.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-12-03); Ten-year compound average after fade. Initial solved rate 0.12491076382243135. Price 1133.5; FX 100; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.207519351271655 → FY2025 0.4062453423368369. Closing-price date 2026-10-15.

## Monthly share-price history (GBX per share)

- 2016-10: GBX 721.50 per share

- 2016-11: GBX 657.50 per share

- 2016-12: GBX 655.00 per share

- 2017-01: GBX 613.00 per share

- 2017-02: GBX 646.00 per share

- 2017-03: GBX 630.50 per share

- 2017-04: GBX 670.00 per share

- 2017-05: GBX 720.50 per share

- 2017-06: GBX 688.00 per share

- 2017-07: GBX 674.00 per share

- 2017-08: GBX 692.50 per share

- 2017-09: GBX 698.50 per share

- 2017-10: GBX 745.50 per share

- 2017-11: GBX 774.50 per share

- 2017-12: GBX 798.00 per share

- 2018-01: GBX 749.20 per share

- 2018-02: GBX 692.60 per share

- 2018-03: GBX 639.20 per share

- 2018-04: GBX 635.20 per share

- 2018-05: GBX 662.40 per share

- 2018-06: GBX 628.60 per share

- 2018-07: GBX 622.00 per share

- 2018-08: GBX 595.40 per share

- 2018-09: GBX 586.40 per share

- 2018-10: GBX 544.40 per share

- 2018-11: GBX 581.40 per share

- 2018-12: GBX 601.40 per share

- 2019-01: GBX 626.00 per share

- 2019-02: GBX 661.00 per share

- 2019-03: GBX 701.20 per share

- 2019-04: GBX 725.40 per share

- 2019-05: GBX 747.00 per share

- 2019-06: GBX 802.40 per share

- 2019-07: GBX 720.00 per share

- 2019-08: GBX 700.60 per share

- 2019-09: GBX 691.40 per share

- 2019-10: GBX 719.80 per share

- 2019-11: GBX 753.80 per share

- 2019-12: GBX 749.00 per share

- 2020-01: GBX 738.40 per share

- 2020-02: GBX 681.80 per share

- 2020-03: GBX 591.80 per share

- 2020-04: GBX 640.00 per share

- 2020-05: GBX 691.00 per share

- 2020-06: GBX 671.80 per share

- 2020-07: GBX 729.40 per share

- 2020-08: GBX 740.60 per share

- 2020-09: GBX 720.80 per share

- 2020-10: GBX 635.60 per share

- 2020-11: GBX 605.00 per share

- 2020-12: GBX 582.00 per share

- 2021-01: GBX 589.80 per share

- 2021-02: GBX 558.60 per share

- 2021-03: GBX 612.80 per share

- 2021-04: GBX 638.00 per share

- 2021-05: GBX 656.60 per share

- 2021-06: GBX 684.20 per share

- 2021-07: GBX 701.60 per share

- 2021-08: GBX 742.20 per share

- 2021-09: GBX 709.60 per share

- 2021-10: GBX 710.80 per share

- 2021-11: GBX 771.80 per share

- 2021-12: GBX 852.60 per share

- 2022-01: GBX 720.80 per share

- 2022-02: GBX 702.80 per share

- 2022-03: GBX 701.20 per share

- 2022-04: GBX 737.40 per share

- 2022-05: GBX 656.60 per share

- 2022-06: GBX 634.80 per share

- 2022-07: GBX 704.40 per share

- 2022-08: GBX 715.20 per share

- 2022-09: GBX 697.20 per share

- 2022-10: GBX 726.80 per share

- 2022-11: GBX 796.60 per share

- 2022-12: GBX 745.60 per share

- 2023-01: GBX 776.80 per share

- 2023-02: GBX 748.60 per share

- 2023-03: GBX 775.00 per share

- 2023-04: GBX 818.60 per share

- 2023-05: GBX 871.00 per share

- 2023-06: GBX 924.80 per share

- 2023-07: GBX 936.60 per share

- 2023-08: GBX 971.00 per share

- 2023-09: GBX 989.00 per share

- 2023-10: GBX 970.60 per share

- 2023-11: GBX 1,130.50 per share

- 2023-12: GBX 1,172.50 per share

- 2024-01: GBX 1,178.00 per share

- 2024-02: GBX 1,244.50 per share

- 2024-03: GBX 1,265.50 per share

- 2024-04: GBX 1,166.00 per share

- 2024-05: GBX 1,022.50 per share

- 2024-06: GBX 1,088.50 per share

- 2024-07: GBX 1,086.00 per share

- 2024-08: GBX 1,011.00 per share

- 2024-09: GBX 1,024.50 per share

- 2024-10: GBX 969.40 per share

- 2024-11: GBX 1,312.00 per share

- 2024-12: GBX 1,273.00 per share

- 2025-01: GBX 1,348.00 per share

- 2025-02: GBX 1,265.00 per share

- 2025-03: GBX 1,207.00 per share

- 2025-04: GBX 1,237.50 per share

- 2025-05: GBX 1,219.00 per share

- 2025-06: GBX 1,250.50 per share

- 2025-07: GBX 1,220.00 per share

- 2025-08: GBX 1,086.50 per share

- 2025-09: GBX 1,100.00 per share

- 2025-10: GBX 1,149.50 per share

- 2025-11: GBX 1,074.50 per share

- 2025-12: GBX 1,083.00 per share

- 2026-01: GBX 957.40 per share

- 2026-02: GBX 821.80 per share

- 2026-03: GBX 837.80 per share

- 2026-04: GBX 876.80 per share

- 2026-05: GBX 842.40 per share

- 2026-06: GBX 816.00 per share

- 2026-07: GBX 973.20 per share

- 2026-08: GBX 1,092.00 per share

- 2026-09: GBX 971.40 per share

- 2026-10: GBX 1,089.50 per share

## Annual estimated value (GBX per share)

- FY2016: low GBX 256.86 per share, central GBX 298.63 per share, high GBX 343.90 per share

- FY2017: low GBX 289.43 per share, central GBX 326.84 per share, high GBX 376.63 per share

- FY2018: low GBX 322.69 per share, central GBX 364.21 per share, high GBX 419.50 per share

- FY2019: low GBX 348.00 per share, central GBX 391.82 per share, high GBX 450.16 per share

- FY2020: low GBX 404.24 per share, central GBX 450.09 per share, high GBX 511.11 per share

- FY2021: low GBX 378.68 per share, central GBX 424.29 per share, high GBX 485.00 per share

- FY2022: low GBX 385.33 per share, central GBX 432.44 per share, high GBX 495.15 per share

- FY2023: low GBX 430.17 per share, central GBX 480.84 per share, high GBX 548.30 per share

- FY2024: low GBX 437.08 per share, central GBX 491.08 per share, high GBX 562.97 per share

- FY2025: low GBX 473.01 per share, central GBX 533.44 per share, high GBX 613.89 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:41:10.199Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original ESEF filing](https://filings.xbrl.org/2138005RN5XYLTF8G138/2025-09-30/ESEF/GB/0/2138005RN5XYLTF8G138-2025-09-30/reports/2138005RN5XYLTF8G138-2025-09-30-T01.xhtml); period 2025-09-30, filed 2025-12-03.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations