Micro Focus lost half of its valuation after posting a sales warning .
The Newbury-based vendor said in a trading update that the rate of revenue decline has been “greater than anticipated” since posting interim results in January, with the firm now set to miss its revised revenue guidelines in its current financial year, which ends in October.
The big issue was problems caused by buying Hewlett Packard Enterprise’s (HPE) software unit. These were problems implementing a new IT system, a greater-than-expected reduction in sales staff, disruption in global HPE customer accounts, and difficulties with sales in North America.
The vendor also announced the resignation of its CEO Chris Hsu, who will leave immediately to spend more time with his family and pursue another opportunity. COO Stephen Murdoch will take over.
Micro Focus saw its share price tank over 55 percent following the announcement.
Kevin Loosemore, executive chairman at Micro Focus said: “We remain confident in Micro Focus’ strategy while recognising that operational issues have led to a disappointing short-term performance and outlook.
“Chris was instrumental in achieving the carve-out of the HPE software business in order that it be merged with Micro Focus. He has led a repositioning of the HPE Software portfolio to the needs of today’s market and put in place a plan to increase our effective product investment as we integrate the companies.”
Micro Focus said it expects revenue to decline between six and nine per cent this year, in constant currency, compared with 2017. EBITDA will however remain flat as a result of cost cutting.
