UPDATE 2-UK software firm Sage says H1 revenue up 17 pct

* Says demand for subscription services still strong

* Revenues beats forecasts due to currency

* Second half of 2009 set to be tough

* Shares up 3.8 percent (Adds further details, reaction, share price)

By Kate Holton

LONDON, May 6 (Reuters) - British software company Sage Group Plc (SGE.L) posted a 17 percent rise in first-half revenues on Wednesday, boosted by strong demand for subscription services and currency movements.

Sage, which sells accountancy and business-management software to more than 5 million small to medium-sized companies, said it was well positioned to benefit when markets recover but expects tough conditions to persist this financial year.

It said its strong organic growth in subscription revenue, which includes support packages, had helped to offset a 15 percent contraction in organic software and software-related service revenues.

Subscription revenue, which constituted 64 percent of the business, grew 2 percent organically.