Shares in Micro Focus (LON:MCRO) have surged in London in today’s session, as the company posted a smaller-than-expected fall in revenue. The tech group further announced that it was extending its share buyback programme.
As of 12:37 GMT, Micro Focus’ share price had added 12.97 percent to 1,710.00p, lending support to the benchmark FTSE 100 index which currently stands 0.44 percent higher at 7,222.26 points. The group’s shares have lost about 16 percent of their value over the past year, as compared with about a 0.1-percent dip in the Footsie.
Micro Focus updates on performance
Micro Focus announced in a statement today that its pro-forma revenue had declined 5.3 percent for the 12 months ended October 31, 2018, as compared with its previous guidance for a decline of between six percent and nine-percent. The group’s pro-forma adjusted EBITDA meanwhile rose 9.2 percent.
The company further said that it had completed the current $400 million share buy-back programme, which it was now extending by up to $110 million.
“We report a solid financial performance for our year ended 31 October 2018,” Micro Focus’ chief executive Stephen Murdoch commented in the statement, adding that looking forward, the company expects “further moderation of revenue decline”.
Analysts weigh in on group’s update
Proactive Investors quoted Russ Mould, investment director at AJ Bell, as commenting that today’s results showed some signs that the company could “regain its credibility with investors” in regard to its cash flow, debt and revenue.
“Micro Focus had a well-earned reputation as a stock market cash machine in the first part of this decade. It returned some 600p per share in ordinary and special dividends between 2011 and 2017, prior to the HPE deal”, he pointed out, that following “a very damaging profit warning and a change of chief executive, the company is at last showing signs of putting the whole sorry episode behind it”.