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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the
Month of: November 2021
Commission
File Number: 001-38187
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 20-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): ☐
CONTENTS
Exhibit No.
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Exhibit Description
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99.1
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Trading
Statement, dated 18 November 2021
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18 November 2021
Micro Focus International plc
Trading Update
Overview
The
Board of Micro Focus International plc ("Micro Focus" or "the
Group", LSE: MCRO.L, NYSE: MFGP), the global enterprise software
group, today issues a trading update for the 12 months ended 31
October 2021 ("FY21").
●
FY21
Revenue of c.$2.9bn which is a decline of 5% on a constant currency
basis ("CCY") and represents a significant improvement in the rate
of year-on-year revenue decline (FY20: CCY 10%).
●
Adjusted
EBITDA of c.$1.0bn at a margin of c.36% for FY21 (FY20: CCY:
39%).
●
Cash
of c.$560m and Net debt of c.$4.2bn as at 31 October
2021.
●
The
Group has been operating on one single IT platform since July and
has now successfully closed two quarters on the new
platform.
●
On
3 November 2021, the Group announced the disposal of the Digital
Safe business for cash consideration of $375m, and the transfer of
approximately $40m of lease liabilities. This transaction is
expected to close in the first quarter of calendar
2022.
●
Micro
Focus will provide an update on the progress on our strategy and
key priorities over the next two years. This webcast will take
place on 1pm (UK time) on 30 November 2021 (details
below).
Stephen Murdoch, Chief Executive Officer,
commented:
"We continue to deliver on our strategic
objectives and the
pace of change in our business is accelerating.
Our customer-centric investments are delivering meaningful
improvements in both sales and our operating performance with the
transition to a single enterprise-wide platform creating the
foundation for further simplification and productivity
improvements.
The sale of the Digital Safe business shows the underlying value of
our assets and is a clear example of how we can deliver incremental
value to all our stakeholders.
We remain committed to delivering revenue stabilisation and
sustainable free cashflow and I look forward to setting out our
strategic priorities in more detail on 30
November."
Financial Performance
Y-o-Y revenue trajectory (on a CCY basis)
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FY21
versus FY20
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Licence
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6%
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Maintenance
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(9)%
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SaaS
and other recurring
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(4)%
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Consulting
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(8)%
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Total
revenue trajectory
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(5)%
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For
FY21, the Group expects to report a revenue decline of 5% on a CCY
basis. This represents a 5ppt improvement in the rate of decline
year-on-year and the Group remains on track to achieve our stated
goal of revenue stabilisation as we exit FY23.
Licence
revenue is expected to increase by approximately 6% when compared
to FY20, through continued improvement in sales execution and the
benefit of the investments in our growth portfolios.
Maintenance
revenue is expected to decline by approximately 9%. The actions
outlined in H1 to moderate the rate of decline are progressing as
planned and operational metrics highlight early indications of
improvement in the underlying renewal rates.
SaaS
and other recurring revenue continued to moderate and is expected
to decline 4%. We are confident the actions being taken will
position this revenue stream for growth in the short term as
targeted.
Consulting
revenue declined by 8%, with an improving trajectory in the second
half.
Profitability and Cash
The
Group's Adjusted EBITDA margin is expected to be approximately 36%
in FY21 reflecting the revenue decline, our targeted investments
and the impact of the transition to the single enterprise-wide
platform. This systems transition has now put the Group in a much
better position to identify inefficiencies and drive productivity
improvements.
The
Group ended the period with cash balances of approximately $560
million and net debt of approximately $4.2bn. Net debt is
broadly flat with $4.1bn reported at 30 April 2021 and is prior to
the impact of the Digital Safe disposal which is expected to reduce
net debt by approximately $0.4bn. Cash generation in the second
half was significantly offset by the settlement of the one off
items reported in H1 (including a number of significant cash tax
payments and the settlement of the WAPP legal claim).
Micro Focus Strategy briefing
Micro Focus will host a strategy
update webcast for investors and analysts at 1pm (UK) / 8AM (ET) on
30 November 2021. Representatives of the management team will
provide an update on corporate strategy which will take the form of
a webcast and Q&A session. A live webcast and recording of the
presentation will be available at https://www.microfocus.com/en-us/investors during
and after the event.
Notes:
1.
All
figures above include the Digital Safe Business for both FY21 and
the FY20 comparatives.
2.
CCY
basis means restating the results of the Group for the comparable
year at the same average exchange rates as those used in reported
results for the current year.
Enquiries:
Micro
Focus
Tel: +44 (0)1635 32646
Stephen Murdoch, CEO
Investors@microfocus.com
Matt Ashley, CFO
Ben Donnelly, Head of Investor Relations
Brunswick
Tel: +44 (0) 20 7404 5959
Sarah
West MicroFocus@brunswickgroup.com
Jonathan
Glass
Notes to Editors:
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 organisations 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 Security, IT Operations Management,
Application Delivery Management, Information Management &
Governance and Application Modernisation & Connectivity. For
more information, visit: www.microfocus.com
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.
Date:
18 November 2021
Micro
Focus International plc
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By:
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/s/
Matt Ashley
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Name:
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Matt
Ashley
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Title:
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Chief
Financial Officer
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