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Micro Focus HY Adj. Profit Down

Micro Focus International plc (MCRO.L, MFGP) reported that its profit attributable to equity shareholders of the parent for the six months ended 30 April 2018 significantly increased to $619.93 million from $67.27 million last year. Profit Attributable to Equity shareholders of the parent, Before exceptional items, declined to $86.12 million from $117.40 million last year.

Loss before tax was $68.53 million, compared to pre-tax profit of $83.14 million in the prior year.

Revenues for the period rose to $1.97 billion from $695.96 million in the prior year. The impact of the HPE Software acquisition is such that in order to understand the underlying trends within the business a pro-forma constant currency or "CCY revenue metric is also presented. On a pro-forma CCY basis, revenue declined by 8.0% year-on-year as a number of transitory issues directly impacted the Group's sales execution in the Micro Focus Product Portfolio.

The Group acquired HPE Software on 1 September 2017 and as a result the Group's reported results for the six months ended 30 April 2018 include six months post acquisition results for HPE Software, while the Group's reported results for the six months ended 30 April 2017, do not contain any results for HPE Software. As a result, on a reported basis, the Group's revenue and cost base has increased substantially between the periods.

The company reiterated its constant currency revenue guidance for the 12 months to 31 October 2018 of minus 6% to minus 9% compared to the pro-forma 12 months ending 31 October 2017 and an Adjusted EBITDA margin of approximately 37% at the midpoint of that revenue range. As previously stated in the pre-close statement on 16 May 2018, net debt is expected to improve to approximately $4.2 billion by 31 October 2018, in line with market consensus.

The company announced that the second interim dividend will be 58.33 cents, the same as last year's final dividend.

The dividend will be paid in Sterling equivalent to 43.86 pence per share, based on an exchange rate of £1 = $1.33, the rate applicable on 10 July 2018, the date on which the board resolved to pay the dividend. The dividend will be paid on 24 August 2018 to shareholders on the register as at 3 August 2018.

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