Micro Focus (LON:MCRO) is running about a year behind its original plan for the integration of the HPE Software assets, the blue-chip group has disclosed. The update came as the company posted its half-year results, which showed an eight-percent dip in pro-forma constant currency revenue.
Micro Focus’ share price has reacted negatively to the update, having given up 8.90 percent to 1,187.50p as of 10:32 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 1.41 percent lower at 7,583.73 points.
Micro Focus posts half-year results
Micro Focus announced in a statement this morning that its pro-forma constant currency revenue had declined eight percent for the six months ended April 30. The group meanwhile reported an improvement in pro-forma Adjusted EBITDA margin from 31.8 percent to 36 percent, up 4.2 percentage points on the comparable period, expected to increase to approximately 37 percent for the full year at the midpoint of the company’s revenue guidance.
The company further reiterate its constant currency revenue guidance of minus six percent to minus nine percent for the 12 months ended October 31, 2018.
HPE Software integration update
“I am pleased to report that since March there has been an improved momentum in the HPE Software integration process and a slowdown in the rate of revenue decline,” Micro Focus’ executive chairman Kevin Loosemore commented in the statement, adding, however, that due to initial challenges in the integration of the HPE Software assets, the group believed that it was now running about one year behind its original plan.
The company expects that on exiting the current financial year revenues will be substantially lower than anticipated at the time of the transaction.