Micro Focus shares rally on positive outlook

Micro Focus shares (LON: MCRO) surged over 20% as the group confirmed that earnings margins for FY20 will be “towards the upper end of management expectations”.

In a trading statement, the software group said revenue declined by approximately 9% compared to the second half of the previous year.

This is an improvement in the revenue trajectory of 2% compared to the first half of the financial year. Set against the context of continued challenging market conditions, “this performance is encouraging,” said the group in a statement.

Chief executive Stephen Murdoch said:

“We are in extraordinary times as a result of COVID-19 and I must take this opportunity to express my sincere thanks to our employees for how they have adapted to the challenges presented and ensured we stay focused on delivering for our customers.

“We are now nine months into our three year turnaround plan for the Group and whilst there remains a great deal to do I am pleased with progress in both overall operational effectiveness and in the delivery of our key strategic objectives. Cash generation and working capital management remain strong, the investments we’ve made are showing encouraging early results and we continue to see a clear, ongoing customer need for our solutions and approach to digital transformation.

“I am confident we are making the changes and building the foundations necessary to continue to make progress in the delivery of our plan.”

Micro Focus shares (LON: MCRO) are up 27.46% at 346,30 (1018GMT).