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Micro Focus Sees Lower H1 Revenue; Withdraws FY20 Revenue View - Quick Facts

Enterprise software company Micro Focus International plc (MCRO.L, MFGP) Tuesday said it expects to report revenue of approximately $1.45 billion for the first half, a decline of around 11 percent from last year on a constant currency basis.

In its trading update, the company said the outlook reflects the expected disruption to new sales activity which was highlighted in COVID-19 update of March 18.

The company said it identified a slowdown in customer buying behaviour in April 2020 leading to the deferral of some projects involving new licence and services revenues as well as delays to some maintenance renewals. The identifiable impact of this is estimated to be at least 2 percent on revenues in the period.

Adjusted EBITDA margin, after IFRS 16, for the first half would be approximately 38 percent, towards the upper end of expectations. The company said the revenue impact on margin 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.

In total, the company had $1.1 billion of available liquidity as of April 30.

Looking ahead, the company noted that the pandemic's ultimate impact on the global economy, the timing and extent to which that impact flows through into customer spending plans on enterprise software remain unknown.

The company said it is withdrawing formal revenue guidance for the current financial year.

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