Micro Focus lowers revenue expectations

Software group Micro Focus said economic woes in Spain, Italy and Japan meant it was lowering its full year revenue guidance.

Software group Micro Focus said economic woes in Spain, Italy and Japan meant it was lowering its full year revenue guidance.

The firm forecast second half revenues would be similar to the first half and said it now expected full year numbers to be down 2% - 4%, compared to its previous estimate of somewhere between growth of 1% and a fall of 3%.

However, it added that it was increasing the target range for underlying adjusted earnings before interest, tax, depreciation and amortisation to 40% to 45%, from its previous range of 37% to 42%.

The company's results for the six months to the end of October showed revenues at constant currency were down 2.1% to $207.3m, in line with market expectations.

Licence fees were $85.3m and maintenance fees were $113.4m, both of which were virtuality unchanged on the year before.

The firm now expects maintenance revenues to be stronger than originally expected and that year-on-year decline will be nearer to 1% than its original guidance of down 2.3%.

Consultancy revenues dropped significantly from $13.4m to $8.6m as the firm worked to eliminate lower margin contracts.

But the company's dividend rocketed by 45.1% to 11.9c per share, reflecting a policy move move to two times dividend cover on pre-exceptional earnings basis.

Executive Chairman Kevin Loosemore said Micro Focus was "well on track to deliver ... our planned financial model and significant shareholder returns over a sustained period".

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