ACCOUNTANCY software group Sage signalled a 16 per cent hike in half-year profits yesterday.

The Newcastle-based company gave investors a pleasant surprise, announcing pre-tax profits for the six months to March 31 would be about £101m - slightly higher than the £98m expected by the City.

Shares in Sage, the last technology company in the FTSE, rose about three per cent on the back of the trading statement.

Revenues increased by 17 per cent to £381m, after stripping out the impact of currency swings. Analysts believe nearly half this increase was achieved without accounting for its recent acquisitions.

Sage, which employs about 8,000 people worldwide including 1,850 staff in the UK, sells software and other services to small and medium-sized enterprises.