£1.6bn wiped off value of firm

MORE than £1.6billion was wiped off the value of Britain’s biggest technology firm yesterday as they warned of falling sales. Software firm Micro Focus completed a near £7billion takeover of rivals Hewlett Packard Enterprise late last year. The deal helped boost the firm’s half-year revenues by 80 per cent. But if you exclude that, sales fell 2.7 per cent, with the firm warning revenues would fall between two per cent and four per cent for the year to October 2018. The downbeat forecast caused Micro Focus’s share price to tumble nearly 17 per cent yesterday.

The takeover of Hewlett Packard Enterprise saw Berkshire-based Micro Focus leapfrog Sage to become the UK’s biggest listed technology firm.

The £11billion group, who employ 5800 people, specialise in maintaining and updating older IT systems and software.

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 per cent 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 their newly acquired software unit for HP.

“The only positives were the offset of a lower than expected tax rate and an increase in the dividend payout.”