Sage posts 10% drop in operating profit after investing in cloud

LONDON (Reuters) - British software company Sage Group reported a 10% drop in full-year organic operating profit to 343 million pounds ($461 million) on Wednesday as investment in its cloud offer squeezed its margin to 19.3% from 22% a year ago.

The company said its organic recurring revenue grew 5.4%, slightly ahead of a market consensus of 5.2%, driven by growth in Sage Business Cloud of 19%.

Chief Executive Steve Hare said Sage, which provides accounting and payroll software to small and medium-sized businesses, had ended the year with momentum.

"Having reshaped and invested significantly in the group over the last three years, we are now focused on growing the business in absolute terms, both organically and through acquisitions," he said.

Sage said it expected to achieve organic recurring revenue growth in the region of 8% to 9% in its 2022 financial year, with its operating margin trending upwards.

($1 = 0.7433 pounds)

(Reporting by Paul Sandle; Editing by Kate Holton)