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By Samuel Indyk
Investing.com – Shares in Micro Focus were trading higher by as much as 9% in early trade after the company delivered a positive trading update for the six months ending 30th April 2021.
The FTSE 250 company expects to report revenue of approximately $1.4bln in for H1, which is above market expectations and represents a decline of around 5% on a constant currency basis when compared to H1 of FY2020.
The software company also expects to report an adjusted EBITDA margin of 36%, again ahead of market expectations, reflecting strong licence revenue performance and cost savings from back office simplification, partially offset by planned product investment.
“We are pleased with a period of further solid progress in most areas of our business,” said Micro Focus (LON:MCRO) CEO Stephen Murdoch. “The product investments and operational changes we are making are beginning to deliver performance improvements, and our value propositions are resonating with customers and partners, as demonstrated by the signing of the significant, long term commercial agreement with AWS.”
Micro Focus said they continue to target meaningful improvement in the rate of constant currency revenue decline in FY 2021 compared with FY 2020, in line with current revenue consensus.
“Whilst there is a great deal to do, we are encouraged by our progress and remain committed to delivering revenue stabilisation and sustainable cash flow generation for our shareholders,” Murdoch added.
At 09:08BST, shares in Micro Focus were trading higher by 8% at 508.54 pence per share.