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Prices & Quotes - UK Markets - Micro Focus International (MCRO)

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Share Price:
Down 534.20p
Change Today:
-7.40p
Market Cap:
1,791.68m
Sector:
Software & Computer Services

Micro Focus reinstates dividend on strong cash generation

By Abigail Townsend

Date: Tuesday 09 Feb 2021

LONDON (ShareCast) - (Sharecast News) - British software firm Micro Focus International has reinstated its dividend, despite a near $3bn impairment charge pushing it deep into the red.

The firm, which is one year into a three-year turnaround plan, said revenues from continuing operations in the year to 31 October 2020 were $3.0bn, a 10.4% decline on the previous year. However, the rate of decline moderated through the year, from 11% in the first half to 9% in the second.

Adjusted core earnings were $1.2bn compared to $1.4bn a year previously. Micro Focus said the margin of 39.1% was towards the upper end of expectations.

But the operating loss came in at $2.66bn, a 1,300% plunge on 2019's profit of $221.7m, following a $2.8bn goodwill impairment charge.

Micro Focus said the one-off charge related to "changes in the group's trading performance and overall environment when compared to the original projections production at the time of the HPE Software acquisition". It sad this impairment charge does not impact the group's cash generation in the period, which has remained strong.

Cash generated from operating activities was $1.1bn, in line with 2019's figure.

Micro Focus said: "Given the group's continued the strong cash performance, the board has elected to reinstate the dividend and recommend a final dividend of 15.5 cents per share." No final dividend was paid in 2019.

Stephen Murdoch, chief executive, said: "We are now 12 months into our three-year turnaround plan and while there remains a great deal to do, we have made solid progress in delivery of our key strategic objectives and improvements in operational effectiveness."

Looking ahead, he added: "The majority of our revenues are contracted and recurring in nature, and management is targeting initiatives to increase this mix. The resilience this high level of recurring revenue affords can be seen in the company's ability to generate cash and manage costs as required, even within a challenging macro environment.

"The second half of the 2020 full year saw a sequential improvement in revenue performance, and we have continued this momentum into the first quarter of the 2021 full year."

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MCRO Market Data

Currency UK Pounds
Price 534.20p
Change Today -7.40p
52 Week High 587.60p
52 Week Low 211.80p
Volume 491,394
Shares Issued 335.40m
Market Cap 1,791.68m
Beta 0.02

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What The Brokers Say

Strong Buy 3
Buy 0
Neutral 5
Sell 0
Strong Sell 1
Total 9
neutral
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

MCRO Dividends

  Latest Previous
  Final Final
Ex-Div 11-Mar-21 n/a
Paid 15-Apr-21 n/a
Amount 15.50¢ 0.000¢

Trades for 16-Apr-2021

Time Volume / Share Price
16:35 195,939 @ 534.20p
16:29 6 @ 536.00p
16:29 9 @ 536.00p
16:29 9 @ 536.00p
16:29 300 @ 535.40p

MCRO Key Personnel

CEO Stephen Murdoch
CFO Brian McArthur-Muscroft