Software firm Sage has posted lower operating profits for the past year on the back of investment into cloud services and a £17 million bad debt provision for Covid-19.
Shares in the company dived after it reported operating profits slipped by 3.7% to £391 million for the year to September 30.
The Newcastle-based company also revealed revenues jumped by 8.5% to £1.6 billion, as it was boosted by a 20% increase in its subscriptions business.
Sage said it was buoyed by strong sales in its North America and Northern Europe operations over the period.
The company said it expects revenues to increase by between 3% and 5% next year, weighted towards the second half of the year as it rebounds from the impact of the virus.
Steve Hare, chief executive of the group, said: “We’ve delivered a strong performance in full-year 2020, achieving recurring revenue growth in line with the guidance we gave at the beginning of the year, despite the Covid-19 pandemic.
“I would like to thank all of our colleagues and partners for their continuing commitment to our customers, communities and each other during this period.
“We’ve also made good strategic progress, delivering against our customer, colleague and innovation commitments.
“While the near term remains uncertain, these foundations position us well to support customers as they adopt digital business models, and I am confident that our additional investment in Sage Business Cloud, and in particular cloud native solutions, will deliver stronger growth and drive the future success of the group.”
Shares in the company fell by 10.4% to 608.8p in early trading on Friday.