Tariff ‘noise’ makes business customers slow to spend, says UK’s Sage

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LONDON (Reuters) -British software company Sage said its small business customers have cash but are reluctant to spend it because of uncertainty linked to U.S. tariffs, although it on Thursday stuck to its full-year growth forecast.

The group reported a 9% rise in revenue for the six months to end-March and maintained its forecast to grow at the same rate or faster for the full year.

Chief Executive Steve Hare, however, said the volatile economic environment was making the group’s millions of small and medium enterprise customers cautious.

“It’s all about confidence,” he said in an interview on Thursday. “Sometimes when you get noise, people then worry and they delay their decision-making. What we need now is people to have the confidence to spend the money they’ve got and invest.”

Shares in Sage fell 5% in early deals, wiping out the gains they had made this month.

The company, which provides software for accountancy, payroll and other business functions, reported underlying operating profit of 288 million pounds ($382.4 million), up 16%, on underlying total revenue of 1.24 billion pounds for the half.

Its margin increased by 140 points to 23.2%.

Hare said Sage had a strong position in AI and it was continuing to invest to automate routine tasks for its customers and give them more time to focus on their businesses.

Sage Copilot, its generative AI-powered assistant, was available to about 40,000 customers in Britain and was being actively used by more than a quarter of them, he said.

($1 = 0.7531 pounds)

(Reporting by Paul Sandle; editing by Barbara Lewis)