Micro Focus share price rises ahead of half-year results

UBS expects April 2018 to have been worse than previous period

Micro Focus share price rises ahead of half-year results

Shares in Micro Focus (LON:MCRO) have gained ground in today’s session, ahead of the company’s second interim results announcement tomorrow. The update will come after the blue-chip group recently announced that it expects to report revenues better than the management guidance of minus nine percent to minus 12 percent on a constant currency basis for the six months ended April 30. 

As of 10:27 BST, Micro Focus’ share price had added 1.17 percent to 1,298.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.09 percent higher at 7,695.02 points. The group’s shares have lost more than 41 percent of their value over the past year, as compared with about a 4.4-percent gain in the Footsie.

Micro Focus to post results

Proactive Investors reports that analysts at UBS expect the FTSE 100 group’s interim results to focus on progress made in resolving the group’s IT and sales attrition which caused the revenue miss as well as cash flow and debt issues and the rate of decline in the business.

“Notwithstanding the weak guidance for the balance of the year, we note the licence comparatives are now getting very easy – in the October 2017 semester HPE Software reported a 20% licence fall, while Micro Focus was -17%,” the analysts pointed out, as quoted by the newswire, adding that the April 2018 period is likely to have been ‘even worse’.

“In the six months to October 2017, both businesses saw around a 3% fall – it may well be worse in this reporting period,” the broker pointed out.

Analysts on blue-chip group

Barclays reiterated its ‘overweight’ rating on Micro Focus today, without specifying a price target on the shares, while Citigroup, which sees the company as a ‘neutral,’ lowered its valuation on the stock from 2,200p to 1,285p yesterday. According to MarketBeat, the tech company currently has a consensus ‘hold’ rating and an average price target of 1,271.67p.

As of 10:43 BST, Tuesday, 10 July, Micro Focus International plc share price is 1,301.50p.

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