Half-year performance at software group Micro Focus International (MCRO) was better than the reported numbers suggest. Buoyed by a decent contributions from recent acquisitions, and adjusted cash profit rose 1.6 per cent to $89.9m (£55m).
Consultancy revenues fell to $5.1m from $8.4m last year, but maintenance fees rose 6 per cent to $118.7m and licence fees grew 2 per cent to £83.7m. Group turnover, on a constant currency basis, rose 2.4 per cent year on year, and management now expects full-year underlying revenue growth of 3 to 6 per cent (up from pervious zero to 5 per cent guidance). The group acquired assets from Progress Software in February, too - which contributed $11m of revenue in the period. Deal-doing has since continued - including the acquisition of assets from Prism Tech and of life-cycle solution company AccuRev.
Income prospects look especially tasty. Along with the hefty half-year dividend hike, Micro Focus paid a 28.1¢ final dividend in October and a 60p special dividend through a 'D' share issue last month. Management is also committed to a "further similar return of value in November 2014" and thinks the full-year dividend payout could be double the half-year payout.
Broker Citi expects full-year pre-tax profit of $173.9m, giving adjusted EPS of 91.7¢ (from £169.5m and 85.7¢ in 2013).
MICRO FOCUS INTERNATIONAL (MCRO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 838p | MARKET VALUE: | £1.16bn | |
| TOUCH: | 822-838p | 12-MONTH HIGH: | 851p | LOW: 493p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 17 | |
| NET ASSET VALUE: | * | NET DEBT: | £164.5m | |
| Half-year to 31 Oct | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 207 | 75.8 | 36.7 | 11.9 |
| 2013 | 208 | 70.5 | 38.9 | 14.0 |
| % change | +0 | -7 | +6 | +18 |
Ex-div: 31 Dec Payment: 24 Jan *Negative equity shareholders' funds £1=$1.63 | ||||
