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  1. Technology
April 28, 1988


By CBR Staff Writer

Cobol language specialist Micro Focus Plc managed to surprise the market positively at last when it announced year-end profits around UKP500,000 above the most optimistic City forecasts. While City caution is thoroughly justified by a miserable three years after the company got dragged down by a whole string of US clonemakers who were among its OEM going bankrupt – and the Micro Focus share price plunged from a lofty 970 pence to hit bottom at 100 pence a few weeks later, the company is fighting to bury the past. It has reduced its dependence on sales to computer manufacturers and these are are now split evenly with sales of packaged products to large end users – a slower but much steadier business that tends to generate continuing revenue flow. During the past year the company entrenched itself in its three main markets change: the US accounted for 50% of the company’s UKP15.9m turnover – against 53% last year; Japan’s share doubled to 20%, and a flat European market meant that its share declined to 30%. We have been waiting for several years now for the allegedly Cobol-mad Japanese to start to justify all Micro Focus’ investment and attention theer and at last all the hard work is beginning to pay off – Japanese sales soared 199%. There was also a 37% rise in the US packaged products business and a 30% growth in US OEM sales, with new deals signed by major companies including Texas Instruments, NEC, Hewlett-Packard and Bull. The Micro Focus Cobol/2 Workbench accounted for 25% of turnover while 75% came from sales of Cobol/2 and the Cobol/2 toolset. Indirect reseller channels This year, Micro Focus intends to continue its recovery by doing what it says has accounted for its good performance during the past year: focusing on added value products, introducing new compiler technology to its OEM customers, expanding distribution channels further for core compiler products with greater emphasis on indirect reseller channels: it also intends to forge closer links with more third party computer-aided software engineering software suppliers. Last year, the company was looking for a boost to its fortunes from the embryonic market for Cobol under the OS/2 operating system; that may be a long time in coming through in a big way although would-be players have to do their business with Micro Focus right at the start of the development cycle, but this year’s white hope is all things Unix – another area that Micro Focus has patiently prepared for over five years – and one that looks decidedly promising. It will launch its Cobol/2 compiler for the Sun Sparc Unix environment during the forth quarter to follow its introduction of new compiler technology under Unix during 1987. During the past year Micro Focus has also standardised on a single Cobol compiler, Micro Focus Cobol/2 – to IBM Systems Applications Architecture, X/Open Unix and ANSI ’85 standards – and introduced IBM IMS and CICS tools and a Template native code generator used for implementing Micro Focus Cobol/2 on proprietary architectures. This time last year, when the shares were 140 pence, we quoted Keith Woolcock of Chase Manhattan Securities saying Get in early – when the price starts to move, you won’t see the price for gold dust (CI No 669) – and at 185 pence yesterday, he is still a bull of the shares, looking for at least UKP2.5m pre-tax this year and a share price over 200 pence.

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