23rd Feb 2006 07:03
Micro Focus International plc23 February 2006 Embargoed for 7.00am, 23 February 2006 Trading Statement and Board Change Micro Focus International plc ("Micro Focus", "the Company" or "the Group"; LSE:MCRO.L) announces that following a review of the Company's performance in thethird quarter, its financial results for the full year are anticipated to bebelow management's previous expectations. The Board now believes that it isunlikely that total revenues will exceed US$140m for the year to 30 April 2006,primarily as a result of continuing sales execution issues. The shortfall inrevenue is expected to have a direct impact at the EBITDA level. Since expectations were set at the half year, the business has experienced thefollowing changes in trading: • Delays in customer decisions and failure to close larger opportunities • Downturn in Japan licence sales following a strong first half • Knock-on impact on maintenance revenues due to lower licence sales • Reduction in the rate of closure of smaller deals In particular, in the case of direct licence sales, the flow of larger deals inthe past four months, over approximately US$500k in value, has beensignificantly below that typically achieved. This is the principal factorbehind management's revised expectations for the full year. In the light of these developments, Tony Hill has informed the Board of hisdecision to step down as the Company's Chief Executive Officer, and to step downfrom the Board of Micro Focus, with immediate effect. The Board has initiated asearch for a successor. In the intervening period, Kevin Loosemore, Chairman ofMicro Focus, will act as Chief Executive Officer with immediate effect. He hasa mandate from the Board to address the current issues within the Company'ssales function, with a focus on short-term sales execution. Kevin Loosemore, Chairman of Micro Focus, commented: "This update on trading is very disappointing but we are determined to rebuildmomentum and deliver on our commitment to sales execution. "While meeting our revised expectations on trading for the full year willinevitably depend on a continued satisfactory run rate of business in the fourthquarter, the Board remains convinced that, over the longer term, there continuesto be a large and strong market for Micro Focus' technology which will supportthe future growth of the business. The Company remains profitable and stronglycash generative, which provides a solid base for the future. "The Board would like to thank Tony Hill for his long-standing commitment toMicro Focus and for his valuable contribution to the business." Contacts: Micro Focus International plc +44 (0) 1635 32646Kevin Loosemore, ChairmanNick Bray, Chief Financial OfficerMichael Kearney, Director, Investor Relations Financial Dynamics +44 (0) 20 7831 3113Giles SandersonHarriet Keen (on the day) +44 (0) 20 7269 7280 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MCRO.L