Member Info for Shed13C

Wow, that is quite a drop today - anyone got any info as to why? Looking at the trades, most seem to be auto so I wonder if an algorithm has been triggered? In terms of volume ~141K shares have been sold and 83K bought including one trade for almost 35K shares.

A typical H1 update from SK (seen several of these over the years from him). It is clear the main issue is execution and whether they can fix this before they run out of cash again. They have significant work to do in the next 4 months but the trend seems positive. If they can deliver on their 2024 plan then 2025 could be very positive (geo political headwinds permitting). Definitely a mid to long term investment at present.

Stephen Kelly has a strong track record of building shareholder value. Couple this with the fact that he is a shareholder in the company and I think the future is bright. Mr Kelly is also very well connected and Cirata have a CEO which would normally be out of their league. Stephen has led some of the largest (multi billion) tech companies so for him to commit to Cirata he will see a huge opportunity and have a vision/plan on how to capitalise on it.

Hi Folks, From my experience of working with Mr Kelly (CEO) he will be promoting a message of positive momentum within the company. He likes to report quarterly as this also builds a need to execute with delay or as Stephen says “Flawless execution with laser like focus”.

TT:120 is a financial gamble but could prove to be fortuitous for Hornby. The new TT:120 models are not as detailed (fragile) as the OO range and this no doubt keeps costs lower. Hornby also have the market (if there is one) to themselves (for now). Selling direct and online allows them to better control costs and the marketing for TT:120. So personally I am rather optimistic although the business still faces considerable challenges. I have put my money where my mouth is and increased my own holding last week.

Missed the TS as well. Looks like MF have still not found the bottom of the revenue number. I suspect it might be ~$2 billion. If you could get costs in line with this and maintain margin/FCF you could have a decent wee business. No doubt this is what is going through OpenText's minds when they made the bid. I would love to see an alternative bid come in from a team who see MF as a successful, growing independent entity. Personally, I think it is sad that another UK tech company is being let go so easily by our government.

The OpenText offer is ridiculously cheap and the fact the Board accepted it shows how much they lack in ambition, vision and ability to execute. With a new Leadership team, Micro Focus has everything it needs to power forward and deliver growth and value to its shareholders. The current management team need to be thrown out. #BringBackKellyCEO.

A lot of investors with 1%+ stakes are submitting their 8.3 forms via the MF website. If I am reading this right, several of them have paid in excess of the offer price for their shares. This would seem to suggest they are looking at a significant loss? Do you think this will make them less likely to vote in favor or will they just be glad to get out?

If you look at OpenText's financials, it is basically another Micro Focus but in different software markets. Legacy applications that they are milking to generate FCF that is returned to shareholders. Unlike MF, they do have revenue growth but this is going to be another purchase of revenue, strip out the costs and move on. I really struggle to see the synergy of this deal and have no idea how the MF Board is recommending it. Stephen Kelly's (former CEO of MF) comments in the Telegraph yesterday tells you all you need to know...

Whilst it is great to see someone else see the value in Micro Focus, this bid grossly undervalues the company. The board of MF has been atrocious, unable to stabilise revenue, find growth opportunities or fix the internal plumbing in a timely manner.

In addition, the constant negative reporting has decimated the SP over the last few years. MCRO has tremendous potential and upside and this could be achieved with a new leadership team. The sale of the company will simply end up destroying more value and no doubt many staff at both companies will pay for this with their jobs.

It is infuriating to see these numpties getting rewarded to the tune of millions for what is basically abject failure.

I for one will be voting against this offer although fear it will go through anyway. Many MF shares are owned by VC etc. and no doubt they will vote for the sale. Hopefully, another company Enterprise company out there will swoop in and make an offer which better reflects the opportunities and assets on offer.

With the strength of the USD against the GBP this sort of opportunistic swoop was inevitable.

Hi Folks,

MF is a challenging stock to own but in theory there is long (very!) term value. For me, the most worrying aspect is the never ending decline in revenues. I am not expecting to see MF announce double digit growth (not with the current portfolio) but they really need to find the bottom. It would be a big step forward if they could deliver revenue stability.

I still maintain that at some point there needs to be a change in CEO. I know there is an element of 'be careful what you wish for' but someone new who could inject some energy, positivity and move the company from turnaround to growth.

It is not about “spin” as this suggests an air of subterfuge but rather positive presentation. There is no doubt that the business plan has delivered some material improvements but this message gets drowned out by the constant drops in revenue etc. A new CEO could give a material bounce to the stock and the company. Is that fair on Mr M.? Probably not but that is business and like sport a results based game.

MF is very frustrating. The management team seem to have a plan but it is taking so long and they seem unable to find the hard deck for revenue. Also, where is the positive PR? I am amazed the CEO is still in place. Not because Mr M. is necessarily doing a bad job but because I would have thought the major shareholders would have demanded a change. Needs someone who the market respects and gets predictable results. My vote would be for Stephen Kelly to return as he is basically kicking his heels and available at the right price.

I have to agree that quarterly updates is the way to go, especially if MF believe they are entering a sustained period of positive results.

If you are saying that mainframe digital transformation could be worth $300-500 million then you may be disappointed. That would be a huge chunk of annual revenue in relation to the COBOL business. It may happen with Amazon behind it and as I said before, fingers crossed.

I hope you are right Pandamonia. The mainframe digital transformation opportunity has been around for years (10+) and not really generated a huge uptick. I get that COVID may have changed this landscape but MF had a similar partnership with Microsoft and Azure in prior years... Not wishing to sound negative and I truly hope I am wrong and this proves to be a cash cow for MF.

And to add, I have a terrible feeling that Stephen M. is out of his depth. Prior to MF, I believe he was a senior manager at Dell. That is quite a jump to running a $3 billion company. Needs a more experienced set of hands. I would not be averse to Stephen Kelly returning.

Watched the presentation this afternoon. On the whole, it was not a bad update until one factors in how many years all this has been going on. It looks to me like HP saw MF coming with the sale of their HPES business. I have said my "opinion" is hold but that is only because I am now £500K+ down on MF shares. There is a long road ahead before many shareholders see any tangible improvement. Also, with potential interest rate increases, the BoD should be looking to reduce the debt pile a wee bit more quickly.

I believe it is getting to the point where Stephen Murdoch is coming to the end of the road. Like a football club, a change of Manager might be in order to boost morale and give the business some oomph.