Sage dividend: history and cash coverage
Sage's dividend has increased in each of the last five years, and its base forecast rises from £0.236 to £0.276 per share. Sage's shareholder distributions exceeded free cash flow in four of the five years shown, so cash coverage has not been consistent.
How much does Sage pay per share?
The base dividend begins at £0.236 per share and rises to £0.255. It ends at £0.276. The bear case holds growth near 1%, while the bull case compounds from £0.240 to £0.290. Sage raised its interim dividend by 8%, and its full-year dividend has increased in each of the last five years. Leverage and competing investment needs justify moderation in the base case.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Free cash flow after stock pay | 468 (392 / 495) | 505 (412 / 554) | 540 (433 / 620) |
| Shares (millions) | 902 (915 / 888) | 898 (924 / 874) | 896 (933 / 860) |
| Dividends per share | 0.24 (0.23 / 0.24) | 0.26 (0.23 / 0.26) | 0.28 (0.23 / 0.29) |
| Net debt | 1,635 (1,659 / 1,733) | 1,609 (1,662 / 1,785) | 1,566 (1,649 / 1,789) |
Is Sage's dividend covered by its cash?
Free cash flow is the money left after operations and the investment deductions included in Sage’s calculation. Dividends transfer cash directly to shareholders. A buyback purchases shares and usually cancels them, increasing each remaining share’s fraction of ownership. Across FY2021–FY2025, Sage paid shareholders more than its free cash flow generated, so reserves and borrowing helped fund the difference.
The cash bridge gives a more demanding view. In FY2025, cash from operations was £528m. Capital spending was £41m, and lease payments were £17m. That leaves £470m of free cash flow before the analytical deduction for £51m of share-based pay. Including £18m of intangible purchases gives £452m before stock pay and £401m after it.
| Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | |
|---|---|---|---|---|---|
| Free cash flow | 470 | 456 | 364 | 254 | 315 |
| − Dividends paid | 207 | 199 | 190 | 183 | 189 |
| − Share buybacks | 605 | 348 | 0 | 249 | 353 |
| = Free cash flow not paid out | 174 | ||||
| Paid to shareholders | 812 | 547 | 190 | 432 | 542 |
| Paid out, % of free cash flow | 172.8% | 120.0% | 52.2% | 170.1% | 172.1% |
What this means. The company's own net debt is higher because it includes lease payments it still owes, while our count leaves those out.
What could change Sage's dividend?
The weighted forecast is 1049.57 GBp in October 2027 (-5% including dividends) and 1067.21 GBp in October 2029 (+1% including dividends). It assigns 25% probability to the bear case, 60% to base and 15% to bull. The decisive evidence will be regional Intacct customer growth, implementation quality, retention and profitable adoption. FY26 results on 19 November 2026 will test delivery against guidance and set the next FY27 outlook. Operating cash must also rebuild room for investment and shareholder returns before the February 2028 bond maturity.
A current ratio of 0.62 also needs context because deferred income was £962m. Customers may pay before Sage delivers the contracted service, so this liability represents future work as well as a financial obligation. The final judgement is whether Sage can fund investment, dividends and buybacks while keeping leverage manageable. The price assumes that it can.
What is Sage's dividend yield at today's share price?
| Today (Oct 19, 2026) | |
|---|---|
| Share price | 1128.00 |
| Free cash flow yield (calculated) | 4.6% |
| Real free cash flow yield (calculated) | 4.1% |
| Dividend yield (calculated) | 1.9% |
What this means. These “today” figures use different dates—some use March or September numbers, while the dividend uses last year’s payout—so they do not all describe the company exactly today.