Micro Focus stocks fall by a quarter due to profit warning

ACTIONS IN MICRO FOCUSBlighty's largest software developer plunged a quarter on Thursday after investors scared off the company's latest profit warning.

The Newbury-based company, which had already told shareholders in March that the year was not going very well, admitted that revenues could fall by 8% in the current fiscal year, which will end at the end of the year. end of October. He promised to "speed up the strategic review of the group's operations".

In addition to promising "performance improvements" (that is, getting the end result), the company also claimed that "the deteriorating macro-economic environment" – Brexit, trade war between the United States and China, the growing expectations of the global recession – etc. not help.

However, the main problem is the chronic indigestion that the company suffers as a result of its merger with HPE Software, an operation described by HPE as a "merger". As a result, HPE shareholders received the great gift of Micro Focus shares, representing 50.1% of the company's shares. At the time, HPE described it as "worth $ 8.8 billion". This is now worth much less than that.

The agreement has helped to promote Micro Focus to the FTSE-100 and bring the company revenue of only $ 1.38 billion in 2017, before the completion of the transaction in September 2017, to $ 3.2 billion for the end of March 2018. Yes, Micro Focus deposits in a non-patriotic way its accounts in US dollars (ugh!).

To make things more confusing, the company has chosen to postpone its end of the year from March to October 2018, making it more difficult to make direct comparisons from one year to the next.

The new CEO, Stephen Murdoch, was appointed in March 2018 to put the company back in shape after the first of its latest series of profit warnings. Murdoch promised to continue to flog the company up to improve its performance – and morale of its staff -.

"We determined that it was appropriate to accelerate the completion of a strategic review of the group's activities to determine where performance could be improved and how the company could be better positioned to maximize shareholder value, "added Murdoch.

Already, the company has transferred SUSE Linux to a Swedish private equity firm for $ 2.535 billion in cash, four years after it ransacked with Attachmate in a $ 1.2 billion deal – so it should only you do not have to wait a lap or two. Atalla, in November 2018, was also unloaded. Μ

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