@steve Sage Topline is growing at 20%plus, which is pretty good....

@steve Sage Topline is growing at 20%plus, which is pretty good. It's important to remember that they are growing off a much larger base since the acquisition of Conject. Post the acquisition, the European region growth was a whopping 143% in FY17. So growth is relative to the size of the business. In fact, they have been doubling their revenue growth every two years, so watch this space!

S&M is high because the potential is so big. They are selling new products like Connected Cost and they are also trying to increase TAM penetration substantially, and also grow the TAM in a US9.5 trillion dollar industry which has only a 1% uptake of technology, in stark comparison to other industries.

And they are being successful- just look at the size of the wins in the Americas- US64.2bn California High Speed Rail and the US$13.4bn New Mexico City Airport.

It's also important to keep growing the enterprise agreement portfolio, as this ultimately ensures that the ANZ model, which has high EBITDA margins and relatively low S&M costs, and which is now responsible for 65% of revenue in ANZ, is replicated internationally. This requires effort, but the prize is worth it.

R&D cost are not low. They are still at around 20%. They are just lower than FY17, when there were integration costs around Conject and Worksite, and when significant new produc (Connected Cost and Packages) was being rolled out. Great that these costs are now behind us.

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This post is based on my own research and is not investment advice. When making investment decisions, always DYOR.