19th Mar 2018 08:01
Hsu - CEO since September 2017 - resigned in order to "spend more time with his family and pursue another opportunity." He will be replaced by current Chief Operating Officer Stephen Murdoch.
"I would like to thank Chris Hsu for his leadership, tireless energy and enthusiasm over the past 15 months and wish him well in his new venture," Micro Focus Chairman Kevin Loosemore said.
"Chris was instrumental in achieving the carve out of the HPE Software business in order that it be merged with Micro Focus. He has led a repositioning of the HPE Software portfolio to the needs of today's market and put in place a plan to increase our effective product investment as we integrate the companies. I look forward to working with Stephen to address the current performance issues and fulfil Micro Focus' potential," Loosemore added.
The FTSE 100-listed software firm also said on Monday that year-on-year revenue decline has been "greater than anticipated" since reporting its interim results in January. As a result, it expects constant-currency revenue for the year ending October to decline more than originally forecast.
Micro Focus now expects pro forma constant-currency revenue to fall between 6% and 9%. This is compared to a 2% to 4% fall originally forecast in January.
The company emphasised, however, that the impact on the steeper fall in revenue on earnings before interest, taxes, depreciation and amortisation should be mitigated by the success of its cost reduction programme. This programme is currently running ahead of schedule.
For the year, Micro Focus expects its adjusted Ebtida margin to be around 37%. Micro Focus also expects net debt for the year to be in line with market expectations.
For the six months ending April, Micro Focus expects constant-currency revenue to fall between 9% and 12%.
Weaker revenue performance was primarily due to "lower than expected" licence income. This is a result of a "number" of factors, Micro Focus explained, including what it described as "largely one-off" transitional effects of the combination with HPE software "rather than underlying issues with the end market or the product portfolios."
Micro Focus completed its
Micro Focus singled out the loss of sales personnel during the integration process, IT system implementation which is hampering sales team efficiency and disruption to former HPE accounts due to the demerger process.
The company has identified steps to address these issues including hiring more sales staff and a focus on top global accounts.
Micro Focus added it still believed the "fundamental thesis of the HPE software acquisition remains intact". It remains committed to its strategy, dividend policy and leverage target.
"We remain confident in Micro Focus' strategy whilst recognising that operational issues have led to a disappointing short term performance and outlook," Loosemore said. "We believe that Micro Focus is well positioned to help our customers with the increasing pace of change across their Hybrid IT environments and to deliver customer centred innovation."
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