FTSE 250-listed software company Micro Focus’ share price jumped almost 10 per cent yesterday, after it announced a rise in full-year profits.
The firm said pre-tax profits rose 2.8 per cent to $153.4m (£98m) for the year to 30 April and increased its proposed final dividend by 20.1 per cent to 28.1 cents per share. Earnings per share rose 19.7 per cent to 78.72 cents.
However, like-for-like revenues were down 3.2 per cent compared to the previous year and net debt soared 57 per cent to $117.7m.
“Following last year’s stabilisation and focus on product management, the current year has been one of solid progress in a challenging market, with our focus turning to channels to market, marketing effectiveness and sales execution,” said executive chairman Kevin Loosemore. “Having consolidated the business and met market expectations for nine consecutive quarters we are also ready to consider appropriate acquisition opportunities.”
Numis said that Micro’s earnings were ahead of forecasts but revenue growth narrowly missed their expectations.
“We think the shares are too cheap given the strong cash generation and increasingly likely prospects for modest growth which could drive further upgrade momentum,” said the broker.
The firm’s shares closed 9.7 per cent higher at 316.76p.