Micro Focus falls after a weak outlook
TROUBLED Micro Focus dived more than seven per cent yesterday after disappointing investors with a weaker than expected profits forecast for the coming year.
Revenue inched up nearly one per cent to $436.1m (£273m) but adjusted operating profit fell almost nine per cent, in line with forecasts.
The slow forecast comes as another blow for the firm, which was forced to issue a profit warning in February and lost its chief executive two months later.
The company said it expects the current financial year to remain challenging, with a near-term decline in sales.
Last month, Micro Focus, which supports mainframe computer applications for Tesco and Boeing, said it was exploring a number of approaches, including from US-based private equity firms Bain Capital and Advent International.
However, analysts said yesterday’s results will do nothing to help the firm achieve a robust valuation.
Chairman Kevin Loosemore said: “We just need to fix the execution issues in the business. If I had the choice between a business with great product and poor execution or great execution and poor product, I know which I would choose.”
Loosemore added the firm will address self-inflicted sales and marketing troubles at its testing business.