(Sharecast News) - Micro Focus International reported a 7% constant currency fall in full-year revenue in a trading update on Monday, to $2.5bn, ahead of its acquisition by OpenText.
The FTSE 250 software company said the year-on-year fall excluded Digital Safe from both periods, but included an impact of about 1% from the suspension of operations in Russia in the first quarter.
On a reported basis, including Digital Safe in both periods, revenue declined 13% in the 12 months ended 31 October.
Adjusted EBITDA slipped to $0.9bn from $1bn, as its margin came in at about 35%, compared to 36% in the 2021 financial year.
The group said its cost-saving programmes generated $200m of annualised gross cost savings, partially mitigating the adjusted EBITDA impact of the decline in revenues.
Micro Focus said it generated free cash flow of more than $300m, ahead of expectations, reflecting "tight control" of operating and exceptional costs.
Net debt totalled $3.5bn as at 31 October, with cash in excess of $500m.
On 25 August, the firm reached agreement with the board of OpenText on the terms of a recommended cash acquisition to be made by OpenText of Micro Focus, at a price of 532p per share.
The board said it was expecting the acquisition to complete during the first calendar quarter of 2023, subject to competition and national security clearances following shareholder approval on 18 October.
"In the 2022 financial year we continued to make significant progress against our strategic objectives," said chief executive officer Stephen Murdoch.
"As a result, Micro Focus has become increasingly customer centric, building growth in key portfolios, whilst delivering cost savings and improving cash generation.
"To date, demand has remained robust in the face of an increasingly volatile market backdrop, demonstrating the importance of our solutions to customers."
Murdoch said the company's acquisition by OpenText would create "one of the world's largest" software and cloud businesses, with a "marquee" customer base, global scale and a "comprehensive" go-to-market platform.
"OpenText not only shares our values but will offer new opportunities for both our customers and employees."
Reporting by Josh White for Sharecast.com.
