Micro Focus Plc continues to aim for the stars with its results for the year to January 31, 1992. Pre-tax profit increased to UKP18.1m from UKP14.8m, after-tax profits were UKP11.7m, compared with UKP9.3m in 1990 and revenue increased to UKP55.9m from UKP46.5m. Cash balances grew to UKP30.9m from UKP10.6m, and direct business increased by 24% to account for 76% of total revenue. The figures include the effects of the pooling of interests acquisition of Stingray Software Co Inc on July 1 by the issue of 600,000 shares, and the acquisition of CICVS86 software products from Innovative Solutions Inc in April for UKP3m. Over 39% of Micro Focus’s shares are held by US holders in the form of ADRs, American Depository Receipts, and chairman Paul O’Grady says there is a strong chance that we will see Micro Focus listed on the NASDAQ stock exchange during the current half: 57% of the company’s revenue comes from the US, and IBM’s AD/Cycle partner has 42% of staff located there, although all development work is located in the UK. Nonetheless, Micro Focus gives the impression that its US business is the one to watch, and it has filed a Form 20-F Registration Statement with the US Securities and Exchange Commission to register as a foreign private issuer under the Securities Exchange Act of 1934, a prerequisite to a NASDAQ listing. If Micro Focus were to report as a foreign private investor, it need do so only on a six-month basis, not the quarterly basis that plagues listed US companies. However, while O’Grady acknowledges that quarterly reporting can be onerous and bring additional pressure to bear, he says that Micro Focus works on a quarterly basis internally, and that must be interpreted as preparation for a US listing. Only 10% of Micro Focus’s revenue is UK-based, and despite O’Grady’s protestations that the nature of the company remains British, Micro Focus admits that it looks to the US as a yardstick. Consequently, few observers would be surprised if Micro Focus upped sticks and operated in the UK and Europe as a US company. The Packaged Products Division, responsible for direct business and 76% of revenue, has been focusing not only on Cobol offerings like Dialog System 2.1 which IBM markets as an AD/Cycle product, but on a range of Unix offerings. The initial products were Cobol/2 compiler, Cobol/2 Toolbox and Dialog System 1.1 for Unix. The company says the revenues were small, but increasingly significant, although it’s too early to say if that’s a trend that will continue. Original Equipment Business is said to have had an unusually good year and finished well ahead of plan with 23% growth on the previous year. It is the company’s most mature business, and European revenue continued to grow with shipments from the likes of ICL Plc, Siemens Nixdorf Informationssysteme AG and Groupe Bull SA. Japan provides 5% of revenue, and a number of companies – Fujitsu Ltd, IBM Japan Ltd and Toshiba Corp – have renewed their Cobol contracts. In the US, Micro Focus secured new business with Pyramid Technology Corp, Sequoia Systems Inc, Stratus Computer Inc and Fujitsu’s HaL Computer Systems. Micro Focus has licensed Micro Focus Toolbox for Unix to over 10 OEM customers, but it is cautious about the contribution to future revenue, saying that it is too early to forecast.

No dividends

O’Grady says that the policy of not paying dividends will continue in the foreseeable future, claiming that UK shareholders do not see it as an issue, and US shareholders don’t expect companies like Micro Focus to pay out dividends. Having done rather well out of IBM’s nebulous and ill-defined AD/Cycle, Micro Focus is a touch unwilling to comment on the current state of play. John Becks, director of Packaged Products, insists AD/Cycle has lived up to its promises, saying that even if the products are two to three years away, AD/Cycle is not about instant gratification. Given that the thing was announced in September 1989 and that the Repository Manager is rudimentary at best, Becks’ point about instant gratification is undeniably correct. He says that i

f some partners are facing difficulties – may we suggest Intersolv UK and Systematica Plc they may owe more to product duplication or conflict rather than faults in AD/Cycle or IBM’s tortuous attempts at application development. Nonetheless, Micro Focus is not slavish when it comes to IBM. It acknowledges openly that the OEM side of the business is always looking to move into new hardware environments, including vendors with methodologies that compete with AD/Cycle.