Sage has warned that it is yet to see signs of recovery as it unveiled results that were helped by a weak pound and a programme of corporate cost-cutting.
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The software supplier was able to produce a renewal rate of 81%, but its services revenue contracted by 16% as a direct result of weaker demand.
On preliminary results for the year ended 30 September, revenue dropped by 4% to £1.4bn and pre-tax profits dropped by 2% to £307.5m.
Sage chief executive Paul Walker said that although conditions in the SME market had stabilised, the upturn had not yet filtered through.
"We are not yet seeing a general recovery in our markets. Therefore, we will continue to manage our cost base prudently, while ensuring the business is well positioned to take advantage of the future economic upturn," he said.
He said that revenues from subscriptions had covered the impact of the drop-off in the services business and that tough decisions made in terms of trimming the cloth taken earlier this year had also had a positive impact.
Earlier this year, Sage gave staff the option of taking voluntary redundancy.
"We have managed our cost base to reflect the current market conditions and at the same time invested for future growth," Walker added.
A version of this story appeared on MicroScope.