By Paul Sandle
LONDON (Reuters) -Software company Sage said its profit margin would increase again this year as its AI-driven products help small businesses, after an 18% rise in operating profit sent its shares to an all-time high on Wednesday.
The British company increased its underlying operating profit margin by 140 basis points to 20.9% in the year to end-September, resulting in profit of 456 million pounds ($568 million).
Chief Executive Steve Hare said the margin would continue to trend upwards. He did not give a specific target, but said "typically 50 to 100 basis points is what people can expect".
Shares in Sage jumped more than 10% to a high of 1,105 pence in early deals.
The company, which provides accountancy and payroll software to small businesses, said its underlying recurring revenue grew 12% in the year to end-September, driven by demand for its cloud-based products. It forecast similar growth this year.
Hare said small businesses were seeing strong growth in productivity by automating processes, helped by the AI that underpinned Sage's software.
AI was being deployed across its products, he said, citing examples such as flagging anomalies in its customers' general ledgers and optimising time management for professionals who billed by the hour.
"We're on a mission to eliminate admin," he said in an interview.
"Small business owners spend typically eight hours a week doing admin and we want to get all of that automated."
Sage also said it would start a 350 million pound share buy-back programme which would run until next April.
($1 = 0.8025 pounds)