Blueprint
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the
Month of: March 2018
Commission
File Number: 333-219678
MICRO FOCUS INTERNATIONAL PLC
(Exact name of registrant as specified in its charter)
The Lawn, 22-30 Old Bath Road
Newbury, Berkshire
RG14 1QN
United Kingdom
+44 (0) 1635-565-459
(Address of principal executive office)
Indicate
by check mark whether this registrant files or will file annual
reports under cover of Form 10-F or Form 40-F.
Form
20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule
101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule
101(b)(7): ☐
Exhibit No.
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Exhibit Description
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99.1
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Trading
Update and Management Change, dated 19 March
2018
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19 March 2018
Micro Focus International plc
Trading Update and Management Change
The Board of Micro Focus International plc ("Micro Focus" or "the
Group", LSE: MCRO.L, NYSE: MFGP), the international software
product group, is today issuing a trading update for the twelve
months ending 31 October 2018.
Since the interim results on 8 January 2018, the rate of
year-on-year revenue decline has been greater than anticipated and
accordingly the Group is issuing revised constant currency revenue
guidance for the twelve months ending 31 October 2018 of minus 6%
to minus 9% compared to the proforma 12 months ending 31 October
2017. This updates revenue guidance of minus 2% to minus 4%
provided at the interim results on 8 January 2018. The impact of
this on adjusted EBITDA margin percentage for the period is
expected to be mitigated by the progress made in the cost reduction
programme which is currently tracking ahead of schedule. The Board
expects for the Group's net debt position at 31 October 2018 to be
broadly in line with market expectations.
Chris Hsu has submitted his resignation in order to spend more time
with his family and pursue another opportunity. He will step
down immediately as the CEO of the company. Stephen Murdoch,
currently Micro Focus COO, becomes CEO and rejoins the Board with
immediate effect.
The recent revenue performance is primarily due to lower than
expected licence income and is a result of a number of factors,
which management believe to be largely one-off transitional effects
of the combination with HPE software, rather than underlying issues
with the end market or the product portfolios. These factors
include:
1.
Issues relating to our new IT system implementation, which have
impacted the efficiency of our sales teams, our ability to transact
with partners and our cash collection;
2.
Higher attrition of sales personnel due to both integration and
system related issues;
3. Disruption
of ex Hewlett Packard Enterprise global customer accounts as a
result of the demerger of Hewlett Packard
Enterprise;
and
4.
Continued sales execution issues particularly in North
America.
Management has identified additional actions to address each of
these points, including further investment in additional field
sales reps, a renewed focus on top global accounts, and continuing
to strengthen the sales management team in North
America.
The impact of the system issues is now under better control as we
are seeing improvements in stability, throughput and accuracy. The
November 2018 timing of the second phase (of moving heritage Micro
Focus systems to the new IT system) is under review.
As a consequence of the factors set out above, for the six-month
period ending 30 April 2018 the Group expects revenues to
decline on a constant currency basis at minus 9% to minus 12%
compared with the proforma comparable prior period and DSOs to
remain at a temporarily elevated level.
As a result of better progress on the cost reduction program than
anticipated, management believe that, at the midpoint of the
revenue guidance range, the cost reductions will enable the company
to achieve Adjusted EBITDA margin percentage of approximately 37%
in the 12 months to 31 October 2018
Despite the integration challenges, the Board believes that the
fundamental thesis of the HPE software acquisition remains intact.
Micro Focus' strategy, dividend policy, leverage target, and Return
of Value approach remain unchanged.
Kevin Loosemore, Executive Chairman of Micro Focus International
commented: "We remain confident in Micro Focus' strategy whilst
recognising that operational issues have led to a disappointing
short term performance and outlook. We believe that Micro
Focus is well positioned to help our customers with the increasing
pace of change across their Hybrid IT environments and to deliver
customer centred innovation."
"I would like to thank Chris Hsu for his leadership, tireless
energy and enthusiasm over the past 15 months and wish him well in
his new venture. Chris was instrumental in achieving the
carve out of the HPE Software business in order that it be merged
with Micro Focus. He has led a repositioning of the HPE Software
portfolio to the needs of today's market and put in place a plan to
increase our effective product investment as we integrate the
companies. I look forward to working with Stephen to address
the current performance issues and fulfil Micro Focus'
potential."
An analyst conference call will be at 8.30am this morning.
Details are as follows:
UK
Toll-Free Number
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0808
109 0700
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Standard
International Access
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+44
(0) 20 3003 2666
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Password:
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Micro
Focus
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Enquiries:
Micro Focus
Tel: +44 (0)1635 32646
Kevin
Loosemore, Executive Chairman
Stephen Murdoch, CEO
Tim Brill, IR Director
Powerscourt
Tel: +44 (0)20 7831 3113
Victoria
Palmer-Moore
Elly Williamson
About Micro Focus
Micro Focus (LSE: MCRO.L, NYSE: MFGP) is a global enterprise
software Company supporting the technology needs and challenges of
the Global 2000. Our solutions help organizations leverage
existing IT investments, enterprise applications and emerging
technologies to address complex, rapidly evolving business
requirements while protecting corporate information at all times.
Our product portfolios are Micro Focus (which
included HPE Software from
completion) and SUSE. Within Micro Focus our
solution portfolios are COBOL Development and Mainframe Solutions,
Host Connectivity, Identity and Access Security,
IT Development and Operations
Management Tools, and Collaboration and
Networking. Within HPE Software our solution portfolios are IT
Operation Management, Application Delivery Management, Enterprise
Security Product, Platform, and Information Management Business.
With effect from 1 November
2017 the Micro Focus solution
portfolios are Security, IT Operations
Management, Application Delivery
Management, Information Management &
Governance and Application Modernization & Connectivity.
For more information, visit: www.microfocus.com.
SUSE, a pioneer in Open Source
software, provides reliable, interoperable
Linux, Software Defined Infrastructure and Application
Delivery platforms that give customers greater control and
flexibility while reducing cost. For more information,
visit: www.suse.com.
1
NTD: The Company must promptly file current reports on Form
6-K furnishing any of the following information:
●
material non-public
information that was made public under English law;
●
information that
was filed with and made public by on the London Stock Exchange on
which the Company’s securities are listed; and
●
information that
was distributed or required to be distributed to security
holders.
Examples
of information or events required to be filed on Form 6-K include:
changes in business; changes in management or control; acquisitions
or dispositions of assets; bankruptcy or receivership; changes in
certifying accountants; the financial condition and results of
operations; material legal proceedings; changes in securities or in
the security for registered securities; defaults upon senior
securities; material increases or decreases in the amount
outstanding of securities or indebtedness; the results of the
submission of matters to a vote of security holders; transactions
with directors, officers or principal security holders; the
granting of options or payment of other compensation to directors
or officers; and any other information which the Company deems of
material importance to security holders. See also “Micro
Focus - Now You Are Public Memorandum” dated April 20, 2017
for more information.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereto duly authorized.
Micro
Focus International plc
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By:
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/s/
Mike Phillips
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Name:
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Mike
Phillips
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Title:
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Chief
Financial Officer
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