Could the UK stock market lose one of its remaining top software companies?

According to analyst George O’Connor at Panmure Gordon, there are whispers that Sage – the specialist in accounting software for small and medium sized companies – could be contemplating moving its listing to Nasdaq. O’Connor said:

It would be a bitter blow for the London Stock Exchange. However a source hints that Sage might be contemplating a move to Nasdaq. This would leave LSE without its banner software company. The upper reaches of the tech index have been decimated; Autonomy, Logica, Misys, Xansa, Sema, CMG – all gone.

The LSE is now characterised by so-called ‘long tail’ companies and Sage chief executive Guy Berruyer is unlikely to be happy about a tail wagging pony – this may have prompted the mooted move. We remind investors that Guy Berruyer has visited the US many times. Sage chief executive North American Pascal Houillon already lives there. Indeed, Sage’s former chief financial officer, Paul Harrison, also recently moved to the US. Unlike recent example, Kofax, Sage could well get de-rated as it moves to the US. Its shares trade on a lofty PE of 17.8 times compared to Microsoft on a PE of 14.9 times (source Datastream).