Micro Focus shares jump as software firm issues upbeat update
Shares in Micro Focus surged to their highest level since July this morning after the software firm said its full-year earnings margin would come in at the top end of expectations.
The London-listed company, which helps customers maintain and update legacy IT systems, swung to a $1bn (£752m) loss in the first half due to the impact of the pandemic.
But in an update this morning Micro Focus said its revenue decline had slowed in the second half thanks to improved performance in its licensing and consulting divisions.
The Newbury-based group said overall revenue was set to decline 10 per cent to $3bn this year, but it forecast adjusted earnings margin of 39 per cent, which is at the upper end of expectations.
Shares leapt just under 30 per cent following the upbeat announcement.
“We are now nine months into our three year turnaround plan for the group and whilst there remains a great deal to do I am pleased with progress in both overall operational effectiveness and in the delivery of our key strategic objectives,” said chief executive Stephen Murdoch.
“Cash generation and working capital management remain strong, the investments we’ve made are showing encouraging early results and we continue to see a clear, ongoing customer need for our solutions and approach to digital transformation.”
Micro Focus’ available liquidity stood at $1.1bn at the end of October, and the company slashed its net debt by roughly $400,000 to $4.2bn.
But it said the outlook remained uncertain and a decision on whether to pay a final dividend was still under review.