LONDON (dpa-AFX) - Micro Focus International plc (MCRO.L, MFGP) reported that its profit before tax for the six months ended 31 October 2017 was $145.7 million compared to $113.2 million in the prior year.
Profit after tax increased by 17.7% to $106.6 million from $90.6 million in the previous year. EPS in the period decreased by 9.1% to 34.64 cents from 38.12 cents last year. Adjusted Diluted EPS in the period increased by 16.4% to 103.87 cents from 89.20 cents in the previous year.
Adjusted profit before tax was $451.8 million compared to $276.2 million prior year.
'The board is confident that medium-term low single digit revenue growth, industry leading margins and strong cash conversion will ensure that Micro Focus can deliver on its strategy. These returns can be further enhanced by appropriate deployment of capital in value enhancing acquisitions,' the company said.
Reported revenues in the six months to 31 October 2017 were $1.23 billion, 80.3% higher than the prior period reported revenues, with HPE Software contributing $569.8 million and $664.7 million coming from existing Micro Focus and SUSE Product Portfolios, a decrease of 2.9%.
The directors declared an interim dividend of 34.60 cents per share (31 October 2016: interim dividend 29.73 cents per share), which represents a payout ratio of approximately 33.3% of the Adjusted Profit after tax for the six-month period of $451.8m and a 16.4% increase on the 31 October 2016 interim dividend. The board anticipates that the weighting of the next interim dividend and the final dividend will be in line with our usual phasing of approximately 1:2, based on the 12-month period ending 31 October 2018.
The dividend will be paid on 9 February 2018 to shareholders on the register at 19 January 2018.
Our focus continues to be delivering annual returns to investors in the range of 15% to 20% per annum. We believe we have a strong operational and financial model that can continue to scale and provide excellent returns to our shareholders.
The company anticipates revenues for the Group for the twelve months ending 31 October 2018 will decline by 2% to 4% when compared to the pro-forma revenues for the 12 months ended 31 October 2017 of $4.22 billion. As a result of the change in year-end it anticipates a shift in Licence revenue towards the new year-end of 31 October which will lead to second half revenues being higher than those in the six months to 30 April. It will seek to re-balance this revenue weighting in future years.
On 1 September 2017 the Company announced the completion of the merger of its wholly owned subsidiary with Seattle SpinCo, Inc., which holds the software business segment of Hewlett Packard Enterprise Company ('HPE'), in accordance with the terms of the previously announced Merger Agreement. Trading results of HPE Software from completion are included in the results for the six months ended 31 October 2017.
Micro Focus International plc said that Mike Phillips, currently CFO, will be moving to the new role of Director of M&A. Micro Focus also announces the appointments of Chris Kennedy as CFO and Ian Fraser as Chief Human Resources Officer. These appointments are with immediate effect.
Mike Phillips, Chris Kennedy and Ian Fraser will report to Chris Hsu, CEO. Mike Phillips will step down from the Board on 31st January 2018.
Chris Kennedy was Chief Financial Officer of ARM Holdings plc from September 2015 to April 2017. Prior to that, Chris was Group Finance Director of easyJet plc for five years. He currently serves as a non-executive director on the board of Whitbread plc and as a trustee of the EMI Group Archive Trust and the Great Ormond Street Hospital Trust.
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