Software specialist Micro Focus (MCRO) fulfilled its promise to return more cash to shareholders by announcing another big dividend hike. The intention to return cash had been well-flagged and, to some extent, compensates for what was a lacklustre performance: like-for-like sales at constant currency declined by 3.2 per cent, although this had been flagged well in advance. The bright spot is that the rate of sales decline slowed down as the year progressed and guidance is for modest growth this year.
The slowdown last year affected all business segments: licence fees declined by 2.4 per cent to $168m (£107m), maintenance fees were flat at $226m, and the planned withdrawal from the consultancy sector resulted in a $10m fall in revenues to $15.7m. A poor start to the financial year was seen in a 10 per cent first-half revenue slump in Micro Focus' key North American market (45 per cent of the group total), although the business recovered strongly and sales in the region were up over 7 per cent in the second half. Overall profitability edged ahead mainly as a result of a $22m fall in underlying operating costs.
Broker Peel Hunt forecasts flat current year adjusted EPS of 88.7¢ and a dividend of 44.1¢.
MICRO FOCUS INTERNATIONAL (MCRO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 673p | MARKET VALUE: | £1.01bn | |
| TOUCH: | 673-678p | 12-MONTH HIGH: | 712p | LOW: 439p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 40¢* | NET DEBT: | 297% | |
| Year to 30 Apr | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 275 | 91 | 32.9 | 15.6 |
| 2010 | 433 | 98 | 37.5 | 21.8 |
| 2011 | 436 | 115 | 47.0 | 23.4 |
| 2012 | 435 | 149 | 65.7 | 31.6 |
| 2013 | 414 | 153 | 78.7 | 40.0 |
| % change | -5 | +3 | +20 | +27 |
Ex-div: 4 Sep Payment: 2 Oct *Includes intangible assets of $378m, or 253¢ a share £1=$1.56 | ||||
