Whatever Sage hoped to achieve with the reorganisation of its US operations in May, it has clearly failed.

Now, more radical action is required, with the Tyneside software company announcing today that it has dismissed the chief executive and the finance director for that territory.

The problem is that revenues in America — which accounts for 44 per cent of turnover — continue to lag the rest of the group, up 4 per cent in the year to September 30 against 7 per cent for the whole.

Given that management has previously stated that it believes growth of 10 per cent in the US is achievable, the scale of that shortfall is significant.

The stock market took this latest setback from across the Atlantic badly, sending shares in Sage down 7 per cent.

It has long been feared that the likes of Microsoft and Intuit are too potent for Sage on their home turf, and today’s announcement did nothing to assuage that.

Paul Walker, the chief executive of Sage, who is assuming direct responsibility for the US until replacements are found, should be applauded for taking decisive action.

But with any turnaround likely to be slow, the shares, at 14 times 2008 earnings, look no more than fair value for now.

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