In full year results, the company also reported EBITA margin increase to 27.4% (2010: 26.4%) at the same time as investing for growth.

Underlying earnings per share increased by 16% to 20.81p (2010: 17.88p), reflecting 8% growth in pre-tax profit, and favourable tax settlements in the year.

Sage revealed a strong operating cash flow of £405.1m (2010: £394.5m), representing 111% of EBITA, with net debt reducing to £24.9m at 30 September 2011 (30 September 2010: £219.8m)

The company announced a 25% increase in total dividend for the year to 9.75p per share (2010: 7.80p per share). This results in a proposed final dividend of 7.07p per share (2010: 5.22p per share)

A share buyback programme of £200m continues, following the sale of Sage Healthcare. Guy Berruyer, Chief Executive, commented: "These good results reflect the strong fundamentals of Sage's business including our leading market positions, a large and loyal customer base, a culture of innovation and robust financial position.

"In the past year we have continued to build on these foundations to deliver higher revenue and profit growth in the future. With our strong cash flows, confidence in our business and our focus on shareholder returns, we are evolving our approach to the use of capital, and as part of the process, the Board has rebased the dividend, resulting in a proposed 25% increase for 2011."

At 9:23am: (LON:SGE) Sage Group (The) share price was +4p at 279p

Story provided by StockMarketWire.com