Micro Focus shares drop as says running about "one year behind" its original plan since HPE Software acquisition
Micro Focus International PLC (LON:MCRO) saw its shares slump on Wednesday after the blue-chip software firm’s boss revealed it is running about “one year behind” and its current financial year revenues will be substantially lower than anticipated at the time of its transformational takeover of HPE Software.
The comment came as the FTSE 100-listed firm posted results for the six months to the end of April, in which it said that on a constant currency basis revenue drop by 8.0% year-on-year, which was a little better than the guidance for a fall of 9%-12% which the company issued before it announced a licensing deal in May.
READ: Micro Focus to sell SUSE business to private equity firm EQTVIII for US$2.5bn
The group, which issued a profit warning back in March, reiterated guidance for a year-on-year decline in revenue of 6%-9% for the 12 months ended 31 October 2018 on a pro-forma basis.
Micro Focus said its half-year adjusted underlying earnings (EBITDA) rose by 6.4% to US$710.5mln, up from US$667.8mln a year earlier, while the adjusted EBITDA margin improved to 36.0% from 31.8% the year before.
The group’s net debt had ballooned to US$4.34bn as at the end of April, up from US$1.41bn the before, but earlier this month Micro Focus agreed to sell its Linux business, SUSE, for US$2.54bn in cash which will be used to cut borrowings. The firm held its interim dividend at 58.33 US cents.
HPE software acquisition set the group back
Kevin Loosemore, Micro Focus‘s executive chairman said:”I am pleased to report that since March there has been an improved momentum in the HPE Software integration process and a slowdown in the rate of revenue decline. This has led to revenues for the period being at the better end of management guidance.”
But, he added: “Due to initial challenges in the integration of the HPE Software assets, we believe that we are running approximately one year behind our original plan and as communicated in March, we expect that on exiting the current financial year revenues will be substantially lower than anticipated at the time of the transaction.
“By the year ending 31 October 2020, we expect the business (excluding SUSE) to have stabilised revenue declines and be delivering adjusted EBITDA margins in the mid-40′s%.”
In early afternoon trading, Micro Focus shares were down 12.7% at 1,238p.
– Releads, updates share price –
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/200557/micro-focus-shares-drop-as-says-running-about-one-year-behind-its-original-plan-since-hpe-software-acquisition-200557.html
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Please Help Support BeforeitsNews by trying our Natural Health Products below!
Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST
Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!
HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.
Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.
MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).