Shares of Micro Focus International plc (LON: MCRO) gapped up 10.8% after the software group released its six-month trading update showing its revenues beat analysts expectations in the first half of its current financial years.
The global enterprise software company generated $1.4 billion in revenues during the six months ended 30 April 2021, which was better than expected, representing an approximately 5% decline to the revenues generated in H1 2020.
Micro Focus noted that its margins of 36% were also better than industry averages, boosted by the strong performance of its licensing business combined with cost-cutting measures across its back-office operations.
The software company noted the completion of some significant deals, such as its partnership with Amzon.com’s Web Services (AWS) to help organisations ditch their mainframe computers for Amazon’s cloud services drove its performance.
Micco focus also noted that its main priority is to improve the rate of constant currency decline in its revenues during H2 2021 while factoring in the impact of the COVID-19 pandemic on its revenues.
The company had $700 million in cash on 30 April 2021 with net debt of $4.1 billion and said that its cash generation remained strong as it headed into H2.
Stephen Murdoch, the Micro Focus CEO, commented: “We are pleased with a period of further solid progress in most areas of our business. The product investments and operational changes we are making are beginning to deliver performance improvements, and our value propositions are resonating with customers and partners, as demonstrated by the signing of the significant, long term commercial agreement with AWS.”
Micro Focus share price.
Micro Focus shares gapped 10.77% higher to trade at 522.4p rising from Monday’s closing price of 471.6p.