Good news from Micro Focus at last

10th Aug 2011 07:17

Shareholders in wounded bid target Micro Focus got some good news on Wednesday as the legacy software specialist said it is trading ahead of expectations.The upbeat trading statement makes a change from profit warnings, of which there have been two this year. The profit warnings, along with senior management upheavals, resulted in a plunge in the share price which alerted private equity houses looking for a cheap acquisition.Total revenues in the three months to 31 July 2011 were ahead of the budget approved by the board on 14 April 2011 and similar to the prior year comparative period on a constant currency basis, Micro Focus's interim management statement said. The restructuring activity undertaken in the final quarter of last financial year resulted in costs being lower than the comparable period, the statement added. As a result of these factors, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was also better than the board's expectations.The group had a net cash position at 31 July 2011 of $0.8m. This compares to a net debt position of $14.9m at 30 April 2011.New executive chairman Kevin Loosemore, who has been in the chair less than four months, said he is "increasingly confident that there is significant untapped value in the business which can be realised by delivering the proposed operational turnaround."Unlocking the potential is the primary focus of the management team, Loosemore added. "At the same time we continue to explore the possibility of a transaction consistent with the underlying value of the business to deliver that value to shareholders more quickly," Loosemore said. --jh