|
Micro Focus, which specializes in maintaining and upgrading
older software systems, said revenues at HPE's software business
fell around 10 percent in the last quarter, which it said was
disappointing but not unusual given the degree of change in the
business.
Its shares dropped as much as 13 percent, and were last down 7.6
percent, the biggest faller on the blue chip FTSE 100.
They had hit a record high on Monday, after rallying 35 percent
since the British company struck a $8.8 billion deal in
September to buy HPE's software business, catapulting it into
the top tier of European tech companies. [nL1N1BJ18F]
"Whilst the short-term decline in license is disappointing it is
not unusual given the level of change being undertaken," Micro
Focus's Executive Chairman Kevin Loosemore said in a statement.
He said he was encouraged by the early progress that HPE
Software's management was making on implementing operational
efficiencies.
Analysts at Citi said that HPE Software's quarterly performance
was disappointing, although it expected Micro Focus to change
the emphasis of the business.
"Whilst we are still waiting for finer details on the mix
between Licence and Professional Services we believe this does
pose questions on the end market dynamics and rate of decline
for the acquired HPE Software business," the analysts said in a
note.
"We expect the decline in HPE Software revenues will introduce
some uncertainty around medium term revenue growth."
Micro Focus said it would convene a general meeting to request
approval of the transaction shortly, and shareholders will also
be asked to approve a $500 million return of value,
approximately $2.09 per share.
Micro Focus said its revenue for the year to end-April was
expected to be within its guidance of flat to down 2 percent on
a pro-forma constant currency basis.
(Reporting by Alistair Smout and Paul Sandle; Editing by Susan
Fenton)
[© 2017 Thomson Reuters. All rights
reserved.] Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
|
