November 2, 2018 / 8:07 AM / 10 months ago

UPDATE 1-Software firm Sage chooses finance chief as new CEO

(Adds details on Hare, company’s challenges, comment)

Nov 2 (Reuters) - UK software firm Sage Group plc plumped for finance chief and interim chief operating officer Steve Hare as its new chief executive on Friday, tasking him with propping up slowing growth after the resignation of his predecessor.

Stephen Kelly stepped down in August as the company struggled with sales execution problems and weak UK subscription sales that have wiped nearly a third off the company’s market value this year.

Shares of the FTSE 100 rose over 3 percent in early trading on the London Stock Exchange.

Analysts say the new chief will need to clean up the company’s cloud strategy as well as battle to retain and attract clients in a fiercely competitive space that includes specialists like NetSuite, Salesforce and Workday .

“He (Hare) has impressed the Board with the momentum, focus and clarity he has brought to the organisation over the last few months as COO but also throughout his tenure as CFO,” Sage said in a statement.

Sage supplies accounting, payroll and human-resources software to millions of small businesses, which it has been trying to migrate to cloud-based subscription services from packaged software, like most of its competitors.

But much of its growth has come through acquisitions in recent years to help offset a difficult multi-year transition to delivering accounting and other software via the cloud.

The company, whose software is used by millions of small businesses worldwide, was forced to downgrade its forecast for full-year organic revenue growth in April.

Sage, which was founded in 1981 and now operates in 23 countries, said it had started a process to find a new CFO and in the meantime, Hare would combine his duties as finance head with those as CEO.

Despite this year’s slide, shares in the company have risen nearly 40 percent in value since Hare took over as CFO in early 2014. (Reporting by Arathy S Nair in Bengaluru; editing by Patrick Graham)

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