A trading update from Micro Focus for the first three months of the year (to 31 July 2011) was full of positive vibes even if hard figures were lacking. There was a sense of relief on the accompanying conference call that the company was now heading in the right direction but the honest acknowledgement that there was a lot more to do to get operations back into shape.
Last year was a real disappointment for the company (see Micro Focus: flat revenues, discussions ongoing), and ended in a major restructuring operation during Q4. The start of the current year has been “pleasing”, revenue is ahead of plan, and the pipeline looks healthy. The revenue figure was not revealed but it is similar to the year ago period on a constant currency basis – however that period itself was below expectations (see Micro Focus misses expectations, brings in new management).
Adjusted EBITDA was better than the Board's expectations. A net debt position of $14.9m has been converted into net cash of $0.8m despite hefty restructuring costs and the purchase of property - its headquarters in Newbury.
As to the approaches to acquire the company - in May Micro Focus confirmed it had received approaches from Bain Capital and Advent Capital - discussions are ongoing. That leaves a sense of uncertainty hanging over the business so it would be good to see a resolution.