News that Stephen Kelly has stood down as Sage (SGE) chief executive (CEO) really is a bolt out of the blue.
No reasons for the unexpected departure have been given but the announcement’s wording that the board and Kelly have ‘come to an agreement’ is bound to spark speculation of a falling out behind the scenes. Chief financial officer Stephen Hare will stand in as interim chief operating officer, effectively running the show until a new boss can be recruited.
Kelly joined Sage four years ago and has overseen major change at the FTSE 100 accounting and enterprise software company, including building a far more substantial cloud business.
A CHALLENGE TOO FAR?
But things have gone off the rails a bit this year. Ambitions to accelerate growth beyond its typical 6% organic revenue torpor has proved harder to execute that management hoped. A slow start to this year culminated in a revenue warning in April.
With the share price down 6%-plus today to 606p (the biggest FTSE 100 faller today) it means that the stock has lost more than 26% of its value since 23 January.
While trading most recently does appear to show more promising signs investors must be wondering if the company’s growth hopes are now little more than a pipe dream even in the face of apparent reassurance on targets today.
‘The group continues to trade in line with previous full year full year 2018 guidance of around 7% organic revenue growth and around 27.5% organic operating margin,’ says the statement today.
