Micro Focus expects weaker performance as platform migration ongoing

(Alliance News) - Micro Focus International PLC on Thursday said it expects to report a decline in earnings and revenue for its recently ended financial year, as it continues to transition to a single enterprise-wide platform.

For the year ended October 31, the Newbury, England-based software and information technology firm expects adjusted earnings before interest, tax, depreciation and amortisation to be around USD1.0 billion, reflecting a 14% drop from USD1.17 billion the year before.

The company's profit performance was partly hurt by targeted investments, and the continue towards running a single IT platform.

In addition, revenue is set to be near USD2.9 billion, down 5% year-on-year on a constant currency basis, driven by weaker performance from all Micro Focus segments aside from Licence, where sales were up 6%.

Micro Focus did note that the revenue decline is slower compared to the 10% drop to GBP3.00 billion reported for the year before, and looking ahead expects to achieve its goal of revenue stabilisation by the end of the 2023 financial year.

"We continue to deliver on our strategic objectives and the pace of change in our business is accelerating. Our customer-centric investments are delivering meaningful improvements in both sales and our operating performance with the transition to a single enterprise-wide platform creating the foundation for further simplification and productivity improvements," said Chief Executive Officer Stephen Murdoch.

"We remain committed to delivering revenue stabilisation and sustainable free cashflow and I look forward to setting out our strategic priorities in more detail on 30 November," Murdoch added.

Shares in Micro Focus were down 2.0% at 404.60 pence on Thursday in London.

By Dayo Laniyan; dayolaniyan@alliancenews.com

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