Micro Focus hit by lack of licence sales

11th Aug 2010 07:32

Legacy software specialist Micro Focus has slashed its sales forecasts for this year after a sluggish first quarter and slow licence sales, though earnings guidance is unchanged.Revenues in three months to July rose by 40%, but sales were flat stripping out last year's acquisitions of Borland and Compuware. This was below expectations, Micro Focus said, and caused by licence delays and continued weakness in higher volume, low value deals across the business.As a result, sales growth this year is now forecast to be "low single digit like for like" instead of "mid single digit growth". "While revenue growth has been weaker than management's expectations for the period, the full year impact on EBITDA margins of ongoing cost management initiatives, some begun in the 2010 financial year, means that management expects no change to current EBITDA guidance for the full year," the statement added.Micro Focus is also shaking up its sales team with director Marc Andrews leaving to be replaced by Malcolm Collins. The group is still looking for a chief financial officer."Despite a disappointing first quarter licence revenue performance, we still expect to meet our previous expectations for full year 2011 adjusted EBITDA and to achieve double digit revenue growth over the medium term," chief executive Nigel Clifford added.