Shares in Micro Focus, the software and consultancy provider, lost ground on Wednesday as the company released trading figures for the first half.
Investors expecting a profit warning were given a reprieve, although foreign exchange losses and charges on the company’s property portfolio mean that full-year earnings before interest, tax, depreciation and amortisation are unlikely to outstrip last year’s $78m.
The group announced expected revenue of $216m for the six months ending in October, compared with $198m a year earlier. After a disappointing first quarter, revenue has picked up in the last three months, driven by its Cobol Development business.
Micro Focus specialises in modernising ageing information technology platforms, allowing clients to avoid the costs of buying new mainframes. It has been rumoured as a potential takeover target for IBM.
The group’s AMQ business, however, which charges licence fees for access to application-testing software, continues to fall below expectations. It formed the division through acquisitions in 2009 worth £192m ($309m), including Borland and parts of Compuware.
A strategy to reverse its declining income will be announced with the interim results in early December, but AMQ revenue flows are unlikely to rise during its financial year, Micro Focus said.
Debt fell by 61 per cent to $40.4m. Management reiterated that it expected to be debt-free by the end of the financial year.
In June, the company’s share price slumped after it lost its chief financial officer to Sophos, an Oxford-based IT rival. BlackRock, the company’s largest shareholder, has in recent weeks trimmed its stake from 16.8 per cent to less than 14 per cent.
Micro Focus shares closed down 3 per cent at 353p, 35 per cent lower than their June high.
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