Enterprise application modernisation software firm Micro Focus International reported that total revenues for the first quarter of the 2011 financial year has increased by 40% compared to the same period in the prior year.
The underlying revenue was flat if the group’s two acquisitions in the first quarter of the 2010 financial year is excluded.
This overall performance is below management’s expectations and caused by the delayed timing of a number of significant transactions beyond the end of the first quarter together with continued weakness in the higher volume low value deals across all three lines of business, including COBOL Development, Modernization & Migration and AMQ.
As referenced at the time of the preliminary results, in the fourth quarter of the 2010 financial year and the first quarter of this financial year the Group began a number of initiatives to improve sales performance.
Among others, these initiatives include a strengthened telesales channel and an improved professional services proposition to support Modernization & Migration sales.
Early indications from such initiatives are positive and these are now being accelerated to drive improvements during the remainder of the 2011 financial year.
Micro Focus has appointed Malcolm Collins as a president of sales in the place of Marc Andrews, Jim Cassidy as chief marketing officer, and Adrian Saunders as vice president of professional services, to develop strength across the Group and redouble the focus on execution.
The board believes that each of these appointments will serve to help Micro Focus deliver on its strategic and financial goals for the current financial year and beyond.
The Group said that now it expects to deliver low single digit like for like revenue growth in the 2011 financial year instead of mid single digit growth. The management expects no change to current EBITDA guidance for the full year.
The company expects to be cash positive by the end of the current financial year.
Micro Focus International chief executive officer Nigel Clifford said that despite a disappointing first quarter licence revenue performance, they still expect to meet our previous expectations for full year 2011 adjusted EBITDA and to achieve double digit revenue growth over the medium term.
Whilst the current economic environment continues to impact the business, we continue to see a significant growth opportunity in the Modernisation & Migration market going forward and are progressing further operational improvements in the COBOL Development business to drive growth in this area.
"Our AMQ offering continues to become more compelling and competitive, with recently launched new products delivering technology leadership in this marketplace," Clifford said.
