29th Aug 2019 08:28
(Alliance News) - Micro Focus International PLC on Thursday warned that it doesn't expect to meet its annual guidance and will now record a steeper-than-expected drop in revenue.
London-listed shares in the enterprise software developer were down 30% at 1,088.80 pence each in morning trade, the worst performer in the FTSE 100 index.
The company blamed weak sales execution and delays in customer contracts as a result of a deteriorating market environment for not meeting its previous constant-currency revenue guidance of a 4% to 6% year-on-year drop for the financial year to October 31.
Micro Focus said it continues to pursue a significant pipeline of business opportunities but to meet the current constant-currency guidance range a significant amount of contract pipeline needs to close before end of the financial year.
It now expects revenue to fall by around 6% to 8% year-on-year. For the 12 months to October 31, 2018, Micro Focus recorded revenue of USD4.06 billion.
Against this backdrop, Micro Focus said it has decided to accelerate a strategic review of its operations. The review will focus on a range of strategic, operational and financial alternatives available to the company.
"Following the recent disappointing trading performance, we have determined that it is appropriate to accelerate the undertaking of a strategic review of the group's operations with a view to determining where performance can be improved and how the business can be better positioned to optimise shareholder value," said Chief Executive Officer Stephen Murdoch.
"Whilst the review is taking place management will continue to drive previously targeted improvements in business performance and execute the operational initiatives already in place," Murdoch added.
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