Micro Focus International Plc shares fell the most in 12 years after it warned that its year-on-year revenue decline will be greater than expected as it grapples with its latest $8.8 billion deal, and said Chief Executive Officer Chris Hsu has stepped down.
Credit Agricole S A acquired a new stake in shares of Micro Focus International PLC - (NYSE:MFGP) in the 4th quarter, according to the company in its most recent filing with the Securities and Exchange Commission (SEC).
The company said it now expects constant currency revenue for the twelve months ending October 31 to be minus 6% to minus 9% compared to last year's proforma revenues. But on Monday it was forced to say that issues relating to a new IT system had affected the sales team while HP's global customer accounts had been disrupted by its demerger.
The impact of this on adjusted EBITDA margin percentage for the period is expected to be mitigated by the progress made in the cost reduction programme which is now tracking ahead of schedule.
It expects its net debt position at year-end to be broadly in line with market forecasts. "(We have) no regrets at all (on the deal but) the returns clearly may be delayed slightly".
'As a result our new forecasts are set at the bottom of the guidance range'. The company previously expected revenue of minus 2% to minus 4%.
Numis downgraded the stock to "hold" from "buy", saying it does not think the company's cost cutting efforts will be enough to compensate for the challenges it faces with HPE and its sales execution.
'Large acquisitions are inherently risky as they come with integration challenges.
United Kingdom software giant Micro Focus has seen half of its valuation wiped off the London Stock Exchange after posting a sales warning this morning.