(Alliance News) - Micro Focus International PLC on Tuesday said its loss widened substantially in the first half of its financial year following a USD922 million impairment charge on Covid-19 compared to no such charge the year before.
Shares in Micro Focus were down 8.7% at 400.00 pence in London in morning trading.
The Berkshire-headquartered FTSE 250-listed software and consultancy company posted a USD1.04 billion pretax loss for the six months ended April 30, hugely widened from a loss of only USD99.6 million the year before.
This resulted from exceptional USD922.2 million goodwill impairment charge "attributable to the increased economic uncertainty as a result of Covid-19, which has led to an increase in the pre-tax discount rate and expected disruption to new sales activity and timing pressure on renewals." No such charge was seen in financial 2019.
Revenue was 13% lower at USD1.45 billion from USD1.66 billion the previous year.
No interim dividend will be paid, after the company's board opted to suspend its final financial 2019 dividend amid Covid-19 uncertainty.
Chief Executive Stephen Murdoch said: "I am proud of our employees' resilience and professionalism throughout the unprecedented disruption caused by the Covid-19 pandemic. Micro Focus' business continuity plans have been highly effective and we continue to adapt our working practices to continue supporting our customers and partners. Our performance during the period has been consistent with our guidance and the successful refinancing of our debt despite the challenging market conditions demonstrates confidence in the underlying strengths of our model.
"Going forward, we see significant opportunities to improve our business and we will continue to progress initiatives to strengthen and simplify our business operations, and stand ready to take further actions if required in these uncertain times."
By Anna Farley; annafarley@alliancenews.com
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