Micro Focus chairman quits after shares plunge again
THE boss of micro Focus is to leave the software company after a brutal year squeezed sales and wiped out profits.
Kevin Loosemore, 60, will stand down on Valentine’s Day after 15 years as chairman and executive chairman.
He is being succeeded as chairman by Greg Lock, who previously headed Computacenter’s board, while Stephen murdoch is expected to remain chief executive. Loosemore, who has been paid £43m since 2011, said: ‘The board and I have decided now is the right time for me to leave.’
He has also given up 1.1m share options worth £8.4m at yesterday’s prices, according to a regulatory filing.
micro Focus specialises in wringing profit out of old computer systems it acquires by selling software and maintenance services to banks and retailers which use them.
Loosemore, who joined when the business floated in 2005, had been credited with growing it from a minnow with annual revenues of just £77m to a giant bringing in £2.6bn.
He took over as executive chairman in 2011, and oversaw a share price surge of more than 350pc until the stock peaked in 2017, the year it bought Hp Enterprise’s software business.
But since then shares have plunged by 72pc and Loosemore ( pictured) has faced anger over his pay, and disquiet over performance.
The Hp Enterprise deal caused particular problems, with early setbacks including the departure of former boss Chris Hsu, six months after he joined micro Focus, cultural differences with American staff, and problems merging computer systems. The turmoil prompted micro Focus to review its businesses last year, prompting speculation of a sale. Loosemore also upset investors by selling £12m worth of shares last year, leaving him with a stake worth £4.9m. His departure was announced as sales fell 9.1pc to £2.6bn in the 12 months to October 31. It went £13.9m into the red from a £477m profit the previous year. The shares fell 22.3pc, or 219.7p, to 766.8p.
Chief executive murdoch said: ‘This has been a challenging year and our overall financial performance fell short of expectations.’
Lock, who will be a non-executive chairman, said he joined the company ‘well aware of the previous successes and the present challenges’. ‘I am looking forward to rolling my sleeves,’ he added.
micro Focus aims to split itself into two units – security and ‘big data’ – under the same group.
Analysts at Citi welcomed the review findings but said they hoped for more concrete actions on what to sell and more detail on how long the turnaround would take.
They also questioned the company’s financial forecasts and added: ‘We believe the departure of the chairman will likely elicit a mixed investor response.’
micro Focus expects revenue in its current financial year to fall by 6pc to 8pc before the benefits of additional investment start to come through in the next year.