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Micro Focus accelerates strategic review as it cuts revenue guidance

The IT group said weak sales execution has been compounded by a deteriorating macro environment, which has led customers to delay buying decisions.

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Micro Focus International PLC (LON:MCRO) announced plans to accelerate a strategic review of the business as it slashed its revenue guidance for the year.

The IT group said weak sales execution has been compounded by a deteriorating macro environment, which has led customers to delay buying decisions.

“There remains a significant pipeline of business opportunity being pursued but to be within the current guidance range a highly challenging percentage of this pipeline would need to close prior to year-end,” the company said.

It now expects a revenue decline of 6% to 8% for the year to 30 October, down from a previous forecast for a drop of 4% to 6%.

Micro Focus said its strategic review would focus on making improvements to “optimise the value of our broad portfolio of products” and will look at “strategic, operational and financial alternatives” available to the company.

Chief executive Stephen Murdoch said: "Following the recent disappointing trading performance, we have determined that it is appropriate to accelerate the undertaking of a strategic review of the group's operations with a view to determining where performance can be improved and how the business can be better positioned to optimise shareholder value.

“We are fully committed to meeting the needs of our customers through the ongoing delivery of innovation within our exceptional product portfolio. 

“Whilst the review is taking place management will continue to drive previously targeted improvements in business performance and execute the operational initiatives already in place."

Quick facts: Micro Focus International plc

Price: 1052.6 GBX

LSE:MCRO
Market: LSE
Market Cap: £3.51 billion
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