Micro Focus scraps dividend to help deal with potential Covid-19 impact

"As a minimum we believe it appropriate to be prepared for a level of disruption to our new sales activity even though the majority of our revenues are contractual and recurring in nature," it said. "As a result, we think it is right to approach the next twelve months with a reduced risk appetite and heightened sense of caution."

Micro Focus said it will consider paying a second interim dividend for the year to the end of October 2019, in lieu of the final one, when there is some visibility on the impact of the virus outbreak on the business.

It insisted that the decision not to pay a final dividend "in no way" alters the board’s view that it remains appropriately capitalised, with "robust" profits and recurring "strong" cash flows. Micro Focus said it had cash on hand in excess of $600m as at 29 February.

"However, in the current extraordinary climate the board believes it is prudent to use every tool at its disposal to maximise the group's resilience in the face of exogenous shocks and to minimise any real or perceived financial risks arising from the current crisis."