Quite often companies complain that either the move away from the mainframe has hit their figures, or perhaps the slower than expected take-up of Microsoft Corp’s Windows95, or more recently still, the negative impact the World Wide Web is having on their business. Not all three at once. But this is exactly what Micro Focus Plc is claiming has happened to it. The Newbury, Berkshire company, whose shares are quoted in American Depositary Receipts form on Nasdaq, turned in pre-tax losses for the year to January 31 of #6.5m, against profits of #8.7m the previous year. But the losses included a restructuring hit of #2.9m, and a #3.8m software asset write-down. The restructuring at the end of the first quarter has reduced the cost base by about #6.5m annually. Turnover fell 14% in the year to #77.3m. The reasons for the fall in revenues were both internal and external, according to the company. Some of the external reasons have been given at the start, but more competition in the Cobol marketplace as well as the increasing use of the company’s mainframe offload products for maintaining old systems, had an effect, as investment increased on client-server systems. But the new MVS offload products released late in the year, but behind schedule, are intended to address this problem, as is the combination of the offloading and rehosting products. Internally, the restructuring effort took up more time and money than anticipated. Contract revenues from the MVS offloading business, where mainframe applications are transferred to personal computers fell 15% and accounted for 56% of the total. The company should be able to benefit from the year 2000 problem with its Cobol expertise, and intends to increase focus in that area. During the year the company decided to get to grips with the World Wide Web before it became entangled in it, and is adding Web capabilities to its client-server tools, as it believed corporations were going to use Intranets to connect users to their existing Cobol applications. The resulting products are due for release in May. Micro Focus itself has established its own Intranet. The company intends to bring the tools together as a single product. The future promises products comprising the Web and video conferencing and workgroup computing offerings from Micro Focus. It expects to return to profitability by the end of this year.
