Recovery hopes at Micro Focus Plc have been postponed so many dimes that it requires considerable suspension of disbelief to take on board the idea that recovery there could be just around the corner and that the shares at around 140 pence are therefore a bargain buy. Keith Woolcock at Chase Manhattan Securities is the brave man making a strong case for the company, arguing that the quality of business is far better than in the heady days of 1983, when here today gone tomorrow OEM customers made up 80% of US business. That’s now down to 37%, from 44% last year, all replaced by solid business with big end users. The consensus in the US is that the personal computer business is staging a very sharp recovery, and Micro Focus insists it could grow 25% without adding a single member of staff. If OEM sales do pick up, the company should grow 20% this year, for a net UKP2m – no taxes after all those losses – to put the shares on a ratio of only about six. The real jam – if you believe the IBM spiel, comes when large users in their droves begin to write applications to the new Systems Applications Architecture, for which Micro Focus VS Cobol Workbench on Personal System/2 is the ideal environment. Got to be in early, insists Woolcock. The market in the shares is tighter than a rusty nut. When the price starts to move, you won’t see it for dust – and I mean gold dust.
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