LONDON (Reuters) - Britain’s Micro Focus Intl (MCRO.L) reported an 8 percent decline in revenue for the six months to end-April, as it struggled to integrate the assets it bought from Hewlett-Packard Enterprise and said it would rack up another $210 million in exceptionals.
Shares in the company fell to a three-month low on Wednesday. They were trading down 9 percent at 1,190 pence at 1500 GMT.
The company cut its revenue outlook and ditched its previous CEO in March after it failed to get to grips with its $8.8 billion acquisition of HPE assets last year, resulting in its shares losing more than half of their value.
Chief Executive Stephen Murdoch, who took over from Chris Hsu, said the group was making better progress on integration, although it was about a year behind its original plan.
“The goal is we continue to moderate the rate of revenue decline into the second half, and then carry that forward in 2019 and 2020,” he said.
The company said the additional resources required to stabilize and remediate one of its platforms was driving an increase in exceptional costs, which were now expected to be $960 million against $750 million previously flagged.
However, it said its cost management programmes were progressing well, and it targeted a further $300 million of annual cost savings by the end of the 2020 financial year.
Micro Focus agreed on July 2 to sell its SUSE open-source enterprise software business to Swedish buyout group EQT Partners for $2.535 billion.
Murdoch said the company had considered other options for the unit, such as spinning it out, but had decided a sale to EQT would be quicker and would secure the future of the company.
“It was a very, very good price,” he said. “On balance we thought it was a win for the shareholders, a win for the team and a win for the customers, so therefore we thought we should go ahead and get it done.”
The company will incur a tax charge in the sale, he said, but it would still have more than $2 billion.
“We have not decided yet on the optimum use of that cash,” he said. “We will find the most accretive acquisition opportunities if those are available, or we will look to return the cash or we pay down debt, or a blend of all three. All of the options are still on the table.”
Editing by Alexandra Hudson