Micro Focus International losses narrow

Published by

Stephen Emerson

Micro Focus International has seen losses narrow

Micro Focus International says it expects revenues to steady after seeing losses narrow.

The Newbury-based firm announced its results for the year ending October 31 and said losses before tax had narrowed at USD517.8 million compared to USD2.94 billion in 2020.

Micro Focus said this was driven primarily by a USD2.80 billion impairment charge against goodwill in financial 2020, which didn't repeat in 2021.

The software company has encountered headwinds since acquiring part of Hewlett Packard Enterprise Co.'s software assets in an $8.8 billion deal in 2017.

Revenues for 2021 decreased to US$2.9bn compared to US$3.0bn the year, a five per cent decline, which was an improvedment on 2020's ten per cent fall.

The company said it was on track to deliver a "a flat or better revenue trajectory" in 2023 and planned to reduce its cost base.

Adjusted underlying earnings (EBITDA) eased to US$1.04bn from US$1.10bn the previous year, with margin sliding to 36% from 39%.

Stephen Murdoch, Chief Executive Officer of Micro Focus International, said:

"We made good progress in FY21 as we continued to reposition the product portfolio to focus on growth opportunities, restructured the go-to-market organisation and implemented a single platform across the group.

"These customer-centric investments started to deliver meaningful improvements in sales and operating performance, and the sale of the Digital Safe business demonstrated the underlying value of our assets. In addition we announced the refinancing of $1.6bn of our debt on attractive terms as we continue to reposition and invest in the portfolio.

"These results provide a good foundation from which to deliver the strategic priorities that we announced at the end of last year. We remain focused on achieving our previously announced financial objectives as we exit FY23: a flat or better revenue trajectory, which combined with significant cost efficiencies should deliver $500m of run rate Adjusted free cash flow."

Net debt increased US$4.20bn from US$4.15bn at the end of the previous financial year with the company increasing its final dividend to 20.3 cents from 15.5 cents the previous year, taking the full-year payout up to 29.1 cents.

Micro Focus also announced today that Karen Slatford was stepping down as a director after eleven years following the company's AGM in March.

Stephen Emerson

Stephen Emerson is the Managing Editor of The Business Magazine and is responsible for the publication's print publications and online properties including the newly launched Biz News websites in Hampshire and Dorset. Stephen has been a journalist for 20 years and has worked at local, regional and national publications and led a team which made The Scotsman website one of the fastest growing news sites in the UK with over eight million monthly users. He has a keen interest in technology, property and corporate finance and telling the stories of the people behind the successful firms in these sectors.