Major blip at Micro Focus
£1.6bn wiped off value of firm
MORE than £1.6billion was wiped off the value of Britain’s biggest technology firm yesterday as it warned of falling sales.
Software firm Micro Focus completed a near £7bn takeover of rival Hewlett Packard Enterprise late last year. The deal helped boost the enlarged firm’s half-year revenues by 80%. But if you exclude that, then sales fell 2.7%, with the firm warning revenues would fall between 2% and 4% for the year to October 2018. The downbeat forecast caused Micro Focus’s share price to tumble nearly 17% yesterday.
The takeover of Hewlett Packard Enterprise saw Berkshire-based Micro Focus leapfrog Sage to become the UK’s biggest listed technology firm.
The £11bn group, which employs 5,800 people, specialises in maintaining and updating older IT systems and software used by retailers, banks and others.
New boss Chris Hsu insisted: “We have achieved a great deal over the last 12 months and enter the new financial year with stronger foundations than a year ago.”
Analysts at stockbrokers Numis described the results as “modestly disappointing” but reckon the “building blocks are clearly in place” for the company to grow.
Micro Focus’s half-year profits rose 29% to just over £100million.
Jordan Hiscott, chief trader at Ayondo Markets, said: “It’s been a horrible start to 2018 for Micro Focus, with the company lowering on guidance and, in particular, commenting on disappointing results from its newly acquired software unit for HP.
“Looking at the results, the only positives were the offset of a lower than expected tax rate and an increase in the dividend pay-out.”