Shares in mainframe modernisation specialist Micro Focus slipped heavily after chief financial officer Nick Bray revealed that he's leaving to possibly join a rival company. This drama comes just a month after new chief executive Nigel Clifford took the helm.
The trading performance wasn't as robust as the headlines figures suggest. The revenue hike largely reflects last year's acquisitions of Compuware's automated management and quality business and of Borland Software. On a like-for-like basis, group revenue grew 5 per cent, with underlying maintenance revenue climbing a solid 6.9 per cent, but like-for-like licence revenue was up just 0.7 per cent.
However, recurring maintenance revenues account for about half of total revenues. And acquisitions - of which there's been seven since 2006 - are refocusing the group onto higher growth areas. Management believes that Micro Focus is now capable of serving a market that's worth $6.4bn (£4.3m), over 10 times the size of its addressable market four years ago.
Broker Numis Securities expects pre-tax profits for 2011 of $167.5m, giving EPS of 59.4¢ (from $150.2m and 52.4¢ last year).
MICRO FOCUS INTERNATIONAL (MCRO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 460p | MARKET VALUE: | £944m | |
| TOUCH: | 460-461p | 12-MONTH HIGH: | 550p | 301p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 107¢* | NET DEBT: | 31% | |
| Year to 30 Apr | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2006 | 144 | 22.6 | 8.25 | 6.0 |
| 2007 | 172 | 60.0 | 22.0 | 10.0 |
| 2008 | 228 | 76.8 | 27.7 | 13.0 |
| 2009 | 275 | 91.4 | 32.9 | 15.6 |
| 2010 | 433 | 98.3 | 37.5 | 21.8 |
| % change | +57 | +8 | +14 | +40 |
Ex-div: 1 Sep Payment: 28 Sep *Includes intangible assets of $396m, or 193¢ a share £1=$1.49 | ||||
