Announcement • Jan 28
Micro Focus International Provides Delisting Update On 25 August 2022, the boards of Micro Focus International plc and OpenText announced that they had reached agreement on the terms and conditions of a recommended all cash acquisition of the entire issued, and to be issued, share capital of Micro Focus (the "Acquisition"), to be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (the "Scheme"). The circular in relation to the Scheme was published on 20 September 2022 (the "Scheme Document"). Micro Focus and OpenText are pleased to announce that the High Court of Justice in England and Wales has made an order sanctioning the Scheme under section 899 of the Companies Act pursuant to which the Acquisition is being implemented. It is anticipated that the Effective Date will be 31 January 2023, which is when a copy of the Scheme Court Order is expected to be delivered to the Registrar of Companies. There has been no material change to the expected timetable of principal events for the Acquisition set out in the announcement made by Micro Focus and OpenText in relation to the Acquisition on 22 December 2022. Applications have been made for the suspension of trading in Micro Focus Shares on the London Stock Exchange's main market for listed securities and the listing of Micro Focus Shares on the premium listing segment of the Official List of the Financial Conduct Authority and such suspensions are expected to take effect by 7:30 a.m. on 31 January 2023. Applications will be made for the suspension of trading in Micro Focus ADSs on the New York Stock Exchange (the "NYSE") and such suspensions are expected to take effect immediately before market opens at 9.30 a.m. (New York time) on 31 January 2023. The last day of dealings in, and for the registration and transfer of, Micro Focus Shares and Micro Focus ADSs is therefore expected to be 30 January 2023. The Scheme Record Time will be 6:00 p.m. on 30 January 2023. Scheme Shareholders on Micro Focus' register at the Scheme Record Time will, upon the Scheme becoming effective in accordance with its terms, be entitled to receive 532 pence in cash for each Scheme Share held. The de-listing of Micro Focus Shares from the premium listing segment of the Official List of the Financial Conduct Authority and the cancellation of the admission to trading of Micro Focus Shares on the London Stock Exchange's main market for listed securities have also been applied for and, subject to the Scheme becoming Effective, are expected to take effect by 8:00 a.m. on 1 February 2023. The cancellation of the listing of the Micro Focus ADSs on the NYSE is expected to be applied for on 31 January 2023 and, subject to the Scheme becoming effective, is expected to take effect on 10 February 2023. In addition, there has been made or will be made an application to terminate Micro Focus's registration with the SEC. Board Change • Nov 16
High number of new directors There are 6 new directors who have joined the board in the last 3 years. Independent Non-Executive Director Debbie Polishook was the last director to join the board, commencing their role in 2022. The company’s lack of board continuity is considered a risk according to the Simply Wall St Risk Model. Board Change • Aug 02
High number of new directors There are 6 new directors who have joined the board in the last 3 years. Independent Non-Executive Director Debbie Polishook was the last director to join the board, commencing their role in 2022. The company’s lack of board continuity is considered a risk according to the Simply Wall St Risk Model. Upcoming Dividend • Jul 14
Upcoming dividend of US$0.08 per share Eligible shareholders must have bought the stock before 21 July 2022. Payment date: 05 August 2022. The company is not currently making a profit but it is cash flow positive. Trailing yield: 9.1%. Within top quartile of British dividend payers (5.3%). Higher than average of industry peers (2.2%). Major Estimate Revision • Jun 29
Consensus forecasts updated The consensus outlook for 2022 has been updated. 2022 revenue forecast fell from US$2.67b to US$2.59b. 2022 losses expected to reduce from -US$1.54 to -US$0.64 per share. Software industry in the United Kingdom expected to see average net income decline 12% next year. Consensus price target down from UK£5.34 to UK£4.76. Share price fell 2.7% to UK£2.91 over the past week. Reported Earnings • Jun 22
First half 2022 earnings: EPS exceeds analyst expectations while revenues lag behind First half 2022 results: US$0.085 loss per share (up from US$0.65 loss in 1H 2021). Revenue: US$1.27b (down 11% from 1H 2021). Net loss: US$27.9m (loss narrowed 87% from 1H 2021). Revenue missed analyst estimates by 3.5%. Earnings per share (EPS) exceeded analyst estimates by 85%. Over the next year, revenue is expected to shrink by 4.4% compared to a 22% growth forecast for the industry in the United Kingdom. Over the last 3 years on average, earnings per share has fallen by 8% per year but the company’s share price has fallen by 47% per year, which means it is performing significantly worse than earnings. Major Estimate Revision • Mar 04
Consensus forecasts updated The consensus outlook for 2022 has been updated. 2022 losses forecast to reduce from -US$1.54 to -US$1.35 per share. Revenue forecast steady at US$2.70b. Software industry in the United Kingdom expected to see average net income decline 9.0% next year. Consensus price target down from UK£5.85 to UK£5.61. Share price fell 12% to UK£3.42 over the past week. Upcoming Dividend • Mar 03
Upcoming dividend of US$0.20 per share Eligible shareholders must have bought the stock before 10 March 2022. Payment date: 21 April 2022. The company is not currently making a profit but it is cash flow positive. Trailing yield: 6.1%. Within top quartile of British dividend payers (4.6%). Higher than average of industry peers (1.9%). Breakeven Date Change • Feb 15
No longer forecast to breakeven The 8 analysts covering Micro Focus International no longer expect the company to break even during the foreseeable future. The company was expected to make a profit of US$153.5m in 2024. New consensus forecast suggests the company will make a loss of US$192.8m in 2024. Breakeven Date Change • Feb 09
Forecast to breakeven in 2024 The 8 analysts covering Micro Focus International expect the company to break even for the first time. New consensus forecast suggests losses will reduce by 24% per year to 2023. The company is expected to make a profit of US$18.9m in 2024. Average annual earnings growth of 66% is required to achieve expected profit on schedule. Recent Insider Transactions • Dec 24
Non-Executive Chairman recently bought UK£1.0m worth of stock On the 17th of December, Gregory Lock bought around 300k shares on-market at roughly UK£3.48 per share. This was the largest purchase by an insider in the last 3 months. This was Gregory's only on-market trade for the last 12 months. Board Change • Nov 02
High number of new directors There are 5 new directors who have joined the board in the last 3 years. Independent Non-Executive Director Pauline Campbell was the last director to join the board, commencing their role in 2021. The company’s lack of board continuity is considered a risk according to the Simply Wall St Risk Model. Upcoming Dividend • Jul 15
Upcoming dividend of US$0.088 per share Eligible shareholders must have bought the stock before 22 July 2021. Payment date: 06 August 2021. Trailing yield: 3.1%. Lower than top quartile of British dividend payers (4.0%). Higher than average of industry peers (1.5%). Executive Departure • Jul 13
CFO & Director Brian McArthur-Muscroft has left the company On the 30th of June, Brian McArthur-Muscroft's tenure as CFO & Director ended after 2.4 years in the role. We don't have any record of a personal shareholding under Brian's name. Brian is the only executive to leave the company over the last 12 months. The current median tenure of the management team is 1.63 years, which is considered inexperienced in the Simply Wall St Risk Model. Major Estimate Revision • Jul 08
Consensus forecasts updated The consensus outlook for 2021 has been updated. 2021 expected loss increased from -US$0.50 to -US$0.73 per share. Revenue forecast unchanged at US$2.85b. Software industry in the United Kingdom expected to see average net income decline 1.0% next year. Consensus price target down from UK£7.01 to UK£6.79. Share price fell 8.2% to UK£4.28 over the past week. Reported Earnings • Jul 04
First half 2021 earnings released: US$0.65 loss per share (vs US$3.08 loss in 1H 2020) The company reported a decent first half result with reduced losses and improved control over expenses, although revenues were weaker. First half 2021 results: Revenue: US$1.43b (down 2.0% from 1H 2020). Net loss: US$218.9m (loss narrowed 79% from 1H 2020). Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 74 percentage points per year, which is a significant difference in performance. Major Estimate Revision • May 20
Consensus forecasts updated The consensus outlook for 2021 has been updated. 2021 expected loss increased from -US$0.32 to -US$0.50 per share. Revenue forecast unchanged at US$2.84b. Software industry in the United Kingdom expected to see average net income decline 4.1% next year. Consensus price target broadly unchanged at UK£6.61. Share price was steady at UK£4.78 over the past week. Analyst Estimate Surprise Post Earnings • Feb 27
Revenue and earnings beat expectations Revenue exceeded analyst estimates by 0.1%. Earnings per share (EPS) also surpassed analyst estimates by 212%. Over the next year, revenue is expected to shrink by 5.9% compared to a 7.9% growth forecast for the Software industry in the United Kingdom. Reported Earnings • Feb 27
Full year 2020 earnings released: US$8.86 loss per share (vs US$0.049 loss in FY 2019) The company reported a poor full year result with increased losses, weaker revenues and weaker control over costs. Full year 2020 results: Revenue: US$3.00b (down 10% from FY 2019). Net loss: US$2.97b (loss widened US$2.96b from FY 2019). Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 75 percentage points per year, which is a significant difference in performance. Reported Earnings • Feb 11
Full year 2020 earnings released The company reported a poor full year result with increased losses, weaker revenues and weaker control over costs. Full year 2020 results: Revenue: US$3.00b (down 10% from FY 2019). Net loss: US$2.97b (loss widened US$2.96b from FY 2019). Analyst Estimate Surprise Post Earnings • Feb 11
Revenue and earnings beat expectations Revenue exceeded analyst estimates by 0.1%. Earnings per share (EPS) also surpassed analyst estimates by 212%. Over the next year, revenue is expected to shrink by 6.0% compared to a 7.1% growth forecast for the Software industry in the United Kingdom. Is New 90 Day High Low • Feb 08
New 90-day high: UK£4.92 The company is up 97% from its price of UK£2.50 on 10 November 2020. The British market is up 6.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Software industry, which is up 3.0% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is UK£9.58 per share. Is New 90 Day High Low • Nov 19
New 90-day high: UK£3.56 The company is up 20% from its price of UK£2.96 on 20 August 2020. The British market is up 5.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Software industry, which is down 5.0% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is UK£8.97 per share. Is New 90 Day High Low • Oct 29
New 90-day low: UK£2.28 The company is down 18% from its price of UK£2.79 on 30 July 2020. The British market is down 5.0% over the last 90 days, indicating the company underperformed over that time. It also underperformed the Software industry, which is flat over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is UK£9.24 per share.