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Micro Focus reiterates guidance after a steady half year

Revenues for the whole year are still expected to decline by between 4% and 6%

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The group's transformation programmes remain on target for completion in 2020

Legacy software giant Micro Focus International PLC (LON:MCRO) maintained full-year revenue guidance after a steady first half perfromances, but its shares still fell as investors expressed some disappointment at the numbers..

Revenue in the six months to 30 April 2019 fell by 7.5% - 5.3% on a constant currency basis - to US$1,657.1mln, up from US$1,791.3mln the year before.

READ Micro Focus trading in line

Licence revenue declined by 11% year-on-year on a constant currency basis, while maintenance revenue fell 1%. Software-as-a-service (SaaS) and other recurring revenue decreased by 8.3% while consulting revenue plunged 18.3%.

The loss before tax was little changed at US$99.6mln, down from US$100.9mln the year before. This time around there were US$161.4mln of one-off costs relating to the integration of the HPE Software business acquired from Hewlett-Packard, while the year before the exceptional costs made a US$195.4mln dent to profits.

The interim dividend was maintained at 58.33 US cents per share (46.66p a share).

"We have made steady progress this half year, delivering against our financial and operational commitments and doing what the company does best: making, selling and supporting infrastructure software solutions that customers value and rely on,” claimed Stephen Murdoch, the chief executive officer of Micro Focus.

“We have continued to make progress on our significant programme of work to fully integrate the HPE Software business through the sustained application of the Micro Focus business model. As a result, we are pleased to reiterate full-year guidance," he added.

In a note to clients, analysts at UBS said: ""We see some disappointment on growth/EBITDA, but FCF may soften the impact."

The Swiss bank repeated a 'buy' rating and 2,050p price target on the FTSE 100-listed firm's shares.

In afternoon trading, shares in Micro Focus had come off earlier lows and were down 0.2% at 2,093p.

 -- Adds analyst comment, share price --

Quick facts: Micro Focus International plc

Price: 312 GBX

LSE:MCRO
Market: LSE
Market Cap: £10.39 m
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