BRITISH IT firm Micro Focus International lost some large deals in the US in its third quarter and said it would not be able to make up the shortfall, sending its shares plunging.
The group said US government departments and major corporations on the east coast had scrapped deals to update applications running on mainframe computers.
“We found Federal to be very hard going, principally around the budget debates which are going on,” chief executive Nigel Clifford said in a call with analysts yesterday.
Some modernisation and upgrade projects for major US financial institutions had also fallen victim to changed spending priorities, he added. The warning sent shares in the company, which also has a software testing business, down as much as 38 per cent to a two-year low of 246p in morning trading, before recovering slightly to close at 291p.
Micro Focus, which supports applications for Tesco and Boeing, downgraded its full-year forecasts after the third-quarter miss, with revenue for the year to the end of April now expected in the range $432m-442m and core earnings of between $159-$167, before a $14m-18m restructuring charge. The firm also warned in December it expected a flat second-half.
City A.M. Reporter