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There was nothing alarming in today’s pre close trading up date from Micro Focus, just signs that reflect the ongoing switch to a greater software emphasis and away from loss making consultancy.
Licence and maintenance revenues for H1 (to October 31 2012) are at the same level as last year (on a constant currency basis) but in line with market expectations. At the end of its last fiscal year, licence revenues had started to rise against lower maintenance revenue and planned lower consultancy revenue as part of a strategy to hone in on software, and the company was looking for additional licence sales in the current year (see Micro Focus: software focus starting to pay off). Consultancy revenue was expected to drop off but even so it missed market expectations. However the company does have costs under control and adjusted EBITDA is ahead of expectations. Net debt has also dropped from $113.2m as of April 30 to $96.2m.
