Micro Focus FY losses narrow but revenues dip

In the year to the end of October 2021, pre-tax losses narrowed to $517.8m from $2.9bn the year before. Meanwhile, operating losses narrowed to $265.6m from $2.7bn. Micro Focus said the improvement from the prior year was due to an impairment charge of $2.8bn against the group's goodwill in FY20.

However, this benefit was partially offset by the fact that revenue fell to $2.9bn from £3.1bn. This was a 5% drop on the year at constant currency but marked an improvement on the 10% decline seen the year before.

The company said it was on track to deliver goals of FY23 exit with a flat or better revenue trajectory, reducing the cost base from $1.9bn to around.$1.5bn-$1.6bn - allowing for cost inflation - and a run rate adjusted free cash flow of approximately $500m.

Chief executive officer Stephen Murdoch said: "We made good progress in FY21 as we continued to reposition the product portfolio to focus on growth opportunities, restructured the go-to-market organisation and implemented a single platform across the group. These customer-centric investments started to deliver meaningful improvements in sales and operating performance, and the sale of the Digital Safe business demonstrated the underlying value of our assets.

"In addition we announced the refinancing of $1.6bn of our debt on attractive terms as we continue to reposition and invest in the portfolio.

"These results provide a good foundation from which to deliver the strategic priorities that we announced at the end of last year."

At 0815 GMT, the shares were down 9.7% at 412.74p.