As well as being a computer software specialist, Micro Focus (MCRO) likes to see itself as a moderate growth company, generating high investment returns, with a big focus on returning funds to shareholders. And with these half-year figures, the group lived up to that by announcing a chunky dividend hike along with a $129.3m (£80.7m) return of capital, through a 'B' and 'C' share scheme - worth 78.8¢ (50p) a share.
Yet, despite such a hefty return of cash to investors, net debt actually fell by $17m in the half. That's because Micro Focus's business model throws off considerable amounts of cash - cash generated from operations represents 92.8 per cent of adjusted cash profits. And management reckons that it can make similar special dividend payments in November next year and again in 2014. "Since flotation [in 2005], shareholders have received a 150 per cent return in dividends," points out executive chairman Kevin Loosemore.
On the trading front, revenue from licence fees was flat at $85.3m, while maintenance fee income was also little changed in the period at $113.4m. Consultancy fee income did fall from $13.4m to $8.6m, but this was in line with a management plan to exit low-margin contracts.
Broker Numis Securities expects full-year adjusted pre-tax profit of $170m and EPS of 82.3¢ (from $168.6 and 71.2¢ in 2012).
| MICRO FOCUS INTERNATIONAL (MCRO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 571p | MARKET VALUE: | £852m | |
| TOUCH: | 571-573p | 12-MONTH HIGH: | 598p | LOW: 365p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 6¢* | NET DEBT: | $96.2m | |
| Half-year to 31 Oct | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 219 | 75.8 | 32.1 | 8.20 |
| 2012 | 207 | 76.4 | 37.0 | 11.9 |
| % change | -5 | +1 | +15 | +45 |
Ex-div: 2 Jan Payment: 25 Jan *Includes intangible assets of $366m, or 245¢ a share £1=$1.61 | ||||
