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The dialog in international markets typically circles again to US tech. The Magnificent Seven nonetheless dominate headlines and investor portfolios, with names like Apple, Microsoft and Nvidia setting the tempo. However whereas American shares seize the limelight, a couple of homegrown FTSE shares are quietly proving that British expertise corporations can maintain their very own.
Two that stand out to me are Sage Group (LSE: SGE) and Computacenter (LSE: CCC). They could lack the trillion-dollar valuations of their Silicon Valley counterparts, however each have carved out worthwhile niches and proceed to ship for shareholders.
Sage Group: Britain’s software program stalwart
Sage has been round since 1981, lengthy earlier than cloud computing was even a time period. It specialises in accounting, payroll and fee software program, serving small and medium-sized enterprises (SMEs) world wide.
The corporate’s shift from on-premises software program to subscription-based cloud providers has remodeled its monetary profile. Recurring income now makes up over 70% of gross sales, offering a steady base for development that’s boosted the share worth 47% up to now three years.
In its newest outcomes, it reported an 11% improve in annual recurring income (ARR), with working revenue margins holding regular at round 21%.
In comparison with US rivals like Intuit (proprietor of QuickBooks), Sage trades at a much more modest valuation — a ahead price-to-earnings (P/E) ratio of 24 versus Intuit’s 35. That decrease a number of might supply higher worth for long-term buyers, particularly if subscription development continues at its present tempo.
Computacenter: the infrastructure spine
If Sage is about software program, Computacenter is all about IT infrastructure. It gives expertise sourcing, integration and managed providers to company and authorities shoppers.
In an business the place scale and reliability matter, it has constructed an enviable popularity. Income grew 3% in 2024 and earnings nearly doubled within the second half, with the enterprise benefitting from long-term contracts that present visibility on future earnings.
Sure, working margins are slimmer than US {hardware} and repair giants like Dell or Hewlett-Packard. However the firm’s give attention to effectivity and buyer retention ends in a return on fairness (ROE) of just about 20%.
Buying and selling at a ahead P/E ratio of simply 14 and providing a 3% dividend yield, Computacenter appears attractively priced in comparison with many US friends — significantly given its fee observe document and 40% dividend development since 2020.
How they evaluate to US tech
The largest distinction between these British tech shares and their US counterparts lies in scale and valuation. American tech corporations typically command hefty premiums, reflecting increased development expectations. That may work in a bull market but it surely additionally means larger worth fall threat if sentiment turns.
Sage and Computacenter supply a extra measured mixture of development, earnings and stability. Their valuations are decrease, dividend yields increased, and income streams extra predictable. For buyers preferring much less volatility with out giving up publicity to the tech sector, these are two shares price contemplating.
Whereas they might by no means match the explosive share worth positive aspects of a surging Nvidia or Tesla, Sage Group and Computacenter present that FTSE shares within the tech sector can ship regular returns and aggressive earnings.
In an index typically criticised for missing innovation, these two stand out as examples of how British corporations can thrive on the worldwide stage — without having a Silicon Valley postcode.
