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TOP NEWS: Micro Focus Revenue Beats Guidance, Enlarges Share Buy Back

LONDON (Alliance News) - Micro Focus International PLC on Thursday increased the size of its ...

Alliance News 14 February, 2019 | 8:52AM
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LONDON (Alliance News) - Micro Focus International PLC on Thursday increased the size of its share repurchase programme and said its decline in pro-forma annual revenue was not as bad as it had expected.

The company software company also said that the most disruptive issues experienced since completion of the USD8.80 billion reverse takeover of Hewlett Packard Enterprise Software business were behind it.

Shares in Micro Focus were trading 11% higher at 1,684.50 pence each on Thursday morning.

"The path to our current position has been a complex and difficult one over the last year as we worked to integrate the Hewlett Packard Enterprise Software business. Integrations of this scale are always challenging and significant programmes of work are still in progress but we believe the most disruptive issues experienced since completion are now behind us," Chief Executive Stephen Murdoch said.

As a result of the acquisition, Micro Focus changed its accounting year and is reporting statutory figures for the 18 months to the end of October 2018. The pro-forma results for the 12 months to October-end include the discontinued SUSE business and 12 months results for the acquired Hewlett Packard software business.

For the 12 months to October, Micro Focus recorded 5.3% drop in pro-forma revenue to USD4.06 billion from USD4.29 billion in the same period a year ago. The revenue drop came in better than guidance of a 6% to 9% fall in pro-forma revenue.

Micro Focus posted a pretax loss of USD78.5 million for the 12 months compared with USD131.5 million pretax profit in the same period a year ago. Adjusted earnings before interest, taxes, depreciation and amortisation increased 8.6% year-on-year to USD1.41 billion.

On a statutory basis, the FTSE 100 company made pretax profit of USD34.1 million for the 18 months to October-end, on a revenue of USD4.75 billion.

Micro Focus said it has decided to extend its share buy-back programme by a further USD110 million. In August 2018, the company announced a USD200 million buy-back programme which was extended in November 2018 to USD400 million.

It declared a final dividend of 58.33 cents per share, taking total dividend per share to 151.26 cents for the 18 month period.

"Looking forward, we expect further moderation of revenue decline and consequently we are guiding constant currency revenue for the continuing Micro Focus Product Portfolio business for the 12 months to October 31 2019 to be between minus 4% to minus 6% compared to a decline of 7.1% for the 12 months ending October 31, 2018. We continue to target a net debt to adjusted Ebitda multiple of 2.7 times and maintain a dividend policy that is twice covered by adjusted earnings," CEO Murdoch said.

The company said its business performance in first quarter of 2019 financial year was in line with the guidance.

By Tapan Panchal; tapanpanchal@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Micro Focus International PLC 1,136.20 GBX 0.76 -

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Alliance News

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