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Micro Focus sees progress as revenue beats guidance

LONDON (Reuters) - British software firm Micro Focus International reported a smaller than expected fall of 5.3 percent in pro-forma revenue for the year to the end of October and said the trajectory, after disposals, would continue to improve.

Shares in the company, which have dropped 26 percent in the last 12 months, jumped more than 7 percent in early trade.

The company, which has struggled to integrate $8.8 billion (6.8 billion pounds) of assets bought from Hewlett-Packard in 2017, said its adjusted earnings increased by 9.2 percent to $1.53 billion, driven by a 4.6 percentage points increase in its margin to 37.7 percent.

Chief Executive Stephen Murdoch said he was confident the company was getting back on track after a challenging year.

The company focuses on maintaining and upgrading legacy software, such as the mainframe software used by banks and major retailers. Murdoch said there was increasing demand to integrate those older systems with cloud and mobile products.

Analysts at Numis, who have a "buy" recommendation of the stock, said the company had beaten year-end guidance both in revenue and cash terms.

"While there remains significant work still to do, we view these results as another significant step in the rehabilitation of Micro Focus," they said.

Shareholders, who have received 151.26 cents a share in dividends over the last 18 months, are set to receive the net proceeds of its $2.535 billion SUSE product disposal after it closes this quarter, the company said.

Micro Focus had forecast its full-year revenue would decline by between 6 and 9 percent, with an adjusted core earnings margin of 37 percent.


(Reporting by Paul Sandle; Editing by James Davey and Edmund Blair)