Software firm Sage shares at 7-month high after reassuring on targets

* Post 5 pct rise in full-year revenue, earnings 8 pct up

* New CEO confirms 2015 targets

* To pay final div of 8p per share

* Shares (Frankfurt: DI6.F - news) rise to seven-month high (Adds CEO comments, analyst reaction, shares)

By Paul Sandle

LONDON, Dec 3 (Reuters) - Software (Xetra: 330400 - news) firm Sage said it was on track to accelerate growth in 2015 after posting an underlying 5 percent rise in revenue and 8 percent rise in earnings, in the first set of results presented by new Chief Executive Stephen Kelly.

Shares in the group were up 3.7 percent at 418 pence by 0936 GMT, having risen as high as 423p, their highest since May.

Sage, whose software is used by more than 6 million small businesses, reported revenue of 1.31 billion pounds ($2 billion) and earnings per share of 22.69 pence for the year to end-September, slightly ahead of market expectations.

Kelly, a former executive of Micro Focus Intl (LSE: 132118.L - news) who most recently led a government efficiency drive, said the results were a milestone towards the target of growing revenue by 6 percent, with a 28 percent operating profit margin, in its current financial year.

He said a 28 percent increase in subscription revenue, which is predictable and improves retention rates, underpinned his confidence.

The British group was also seeing strong demand for its Sage One software, a "cloud"-based product designed as an introduction to accounting software for small traders, he said.

"Customers view Sage as indispensable to their businesses and they want our help to transition over time to cloud and mobility," he said in an interview on Wednesday.

Analyst Gareth Evans at Westhouse Securities said that crucially Kelly had re-committed to the targets for 2015. "Validation on both fronts, along with some upbeat commentary from the incoming CEO, is clearly a relief," he said.

Sage said it would pay a final dividend of 8p per share, giving it a yearly total of 12.12p, up 7 percent.

($1 = 0.6393 pounds) (Editing by James Davey and David Holmes)