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Micro Focus shares tumble as it writes off US$922mln

Published: 09:57 07 Jul 2020 BST

Micro Focus International plc - Micro Focus shares tumble as it writes off US$922mln

Micro Focus International plc (LON:MCRO) shares tumbled as interim results included US$922mln of impairment due to increased economic uncertainty resulting from the coronavirus (COVID-19) pandemic.

The company, in a statement, said that the pandemic is expected to disrupt new sales activity and timing pressure on renewals.

It meanwhile told investors that its revenue performance is consistent with guidance, with coronavirus (COVID-19) creating delays in buying behaviours with customers in April.

READ: Micro Focus's penny-watching protects margins

Revenue reduced by at least 2% period-on-period, the company said. It added that the impact has been largely mitigated at adjusted earnings level following close management of costs.

The company reported a US$906.7mln statutory operating loss from continuing operations, versus an operating profit of US$32.6mln in the same period last year.

“Micro Focus' business continuity plans have been highly effective and we continue to adapt our working practices to continue supporting our customers and partners,” said Stephen Murdoch, chief executive.

“Going forward, we see significant opportunities to improve our business and we will continue to progress initiatives to strengthen and simplify our business operations, and stand ready to take further actions if required in these uncertain times."

It described a strong cash performance, generating US$560.4mln from operating activities in the six months. At the end of the half, it had US$808.1mln of cash and cash equivalents. Available liquidity totalled US$1.1bn at the end of April.

In London, Micro Focus shares fell 36p or 8.23% changing hands at 401.7p.

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