Micro Focus Int plc - Trading Statement
Trading Statement and Management of COVID-19 Impact
The Board of
This is consistent with the guidance given at the time of our preliminary results on
The impact of this revenue reduction on Adjusted EBITDA (after IFRS 16)* has been largely mitigated due to the close management of variable and discretionary costs in addition to a reduction in certain costs as a direct result of COVID-19. As such, our Adjusted EBITDA margin (after IFRS 16)* of approximately 38% in the period was towards the upper end of our expectations.
Our cash flow performance was strong and underpinned by effective working capital management. We ended the period with operating cash balances of
Despite this resilience, the ultimate impact on the global economy remains unknown, as does the timing and extent to which that impact flows through into customer spending plans on enterprise software. As a result and similar to many other listed companies, it is not possible to provide reliable forward guidance in the current environment and we are withdrawing formal revenue guidance for the current financial year. As a minimum, we continue to believe it appropriate to be prepared for a level of disruption to our new sales activity and timing pressure on renewals. As a consequence, we are currently evaluating the potential impact on the carrying value of the Group's intangible assets and goodwill at this point in time.
The company has reacted quickly to ensure a balanced approach to mitigating the immediate risks whilst continuing to make progress on the actions taken as a result of the Strategic and Operational Review. As such, the investments outlined as part of that review are broadly continuing as planned. Outside of these investments, mitigating actions including a hiring freeze in all but exceptional circumstances, as well as reductions in all discretionary spending, are now in place. The Group is prepared to implement further actions in reducing costs, in the event the pandemic has a prolonged impact on trading performance.
Despite the current uncertainty, the Group's diversified and recurring revenue base and our highly cash generative business model represent solid foundations from which to execute any additional actions required. Additionally, our business continuity plans have been thoroughly tested and are proving robust.
We have more than 90% of our people working from home and supporting our customers and partners effectively and we are proud of the commitment and determination of our teams in making this transition as seamless as possible despite the challenges. Our primary focus remains the health and safety of our employees and delivering for our customers and partners.
We focus on helping customers navigate the need to build, operate, secure and analyse the enterprise through the four core pillars of digital transformation: Enterprise DevOps, Hybrid IT Management, Predictive Analytics and Security, Risk & Governance. In helping customers to bridge the gap between existing and emerging technologies our customers are able to balance the need to both run and transform their business to deliver innovation faster with less risk.
This announcement contains information that was previously Inside Information, as that term is defined in the Market Abuse Regulation (Regulation (EU) No 596/2014 of the
*Adjusted EBITDA and Net debt are stated after the impact of IFRS 16 which has been newly adopted from
Stephen Murdoch, CEO [email protected]
Brian McArthur-Muscroft, CFO
Ben Donnelly, Investor relations
Brunswick Tel: +44 (0) 20 7404 5959
Sarah West [email protected]
Notes to Editors:
About Micro Focus
Micro Focus (LSE: MCRO.L, NYSE: MFGP) is a global enterprise software company supporting the technology needs and challenges of the Global 2000. Our solutions help organizations leverage existing IT investments, enterprise applications and emerging technologies to address complex, rapidly evolving business requirements while protecting corporate information at all times. Our product portfolios are Security, IT Operations Management, Application Delivery Management, Information Management & Governance and Application Modernization & Connectivity. For more information, visit: www.microfocus.com
This information is provided by RNS, the news service of the
Quick facts: Micro Focus International plc
Market Cap: £1.08 billion
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