Micro Focus Share Discussion Threads

[phillis] 12/2/2021 10:45

this is a business in decline throwing off cash
No organic growth record to speak of
Where is the growth coming from?

[rochdae] 12/2/2021 10:16

And mcro even with the debt is trading at 5x ebitda, which for an IT company is cheap as they come.

[rochdae] 12/2/2021 10:14

All accounting speak. All the market cares about is cash generation and its rate of growth. 1.2 billion in ebitda ..

Debt I agree is a problem if it can' be managed. But mcro a long way from that, and moving further away with each month that passes..

[sr2day] 12/2/2021 10:04

what you waiting for then?on your bike.

[scepticalinvestor] 12/2/2021 10:01

haha well done on agl!yes, some on here could certainly do with that approach.sr2 hope you are reading this dear lol. Hysterics can be cured

[wiganer] 12/2/2021 10:00

The debt maturing in 2024 isn’t the only liability, there is a slew of other chunky liabilities on the balance sheet and not much by way of assets. excluding intangible assets of course, because they don’t count, being vapor.

[sr2day] 12/2/2021 09:59

400 pence is in the radar,could go lower if nasdaq tanks.

[rochdae] 12/2/2021 09:56

And rated 150% higher than a few months ago ... going way higher still. 800 by the next trading update, over £10 next year imo with divi 2x up ta boot..

[rochdae] 12/2/2021 09:49

I don't see debt as an issue here. No debt maturities till 2024. Reduction in debt of around 400 million a year. 700 million in cash so debt should be down below 3 billion next year, less than 3x ebitda which is something the market won't be so concerned with, dropping to 2.5x the following year.

Roch

[wiganer] 12/2/2021 09:35

There’s is s simple reason why this isn’t rated higher: DEBT

Free cash flow is fine and dandy, but not so much if the first call on on it is tying to make a dent in a wall of debt.

[rochdae] 12/2/2021 09:30

So results actually came in ahead of market expectations. Ebitda margin was up on the trading update at 19.1%, which means margins are still growing, they must be over 40% for Q1 with revenue accelerating.

The move to 540 on the day sums up what the market thought. A return to that level shouldn't be too long coming. Then another burst higher with the next trading statement.

The daily moves are frustrating, but the larger picture shows a fairly rapid recovery. Still expecting a move to 800 on the next bit of good news.

The conference call clearly stated that this was the bottom in margin decline with a clear aim of reaching fcf of 700 million by 2023. That's a 40% increase in cash which could mean dividends of 6/7X from where we are.

I don't know why anyone would sell with that prospect in mind unless they are of a nervous disposition and/or are over geared etc..

Roch

[purchaseatthetop] 12/2/2021 09:29

Ahhh...sceptical investor....I have the panacea for all ills...the balm of calmness to correct the ill winds....I own a mass of AGL and they are blessed to rise each and every day.

[sr2day] 12/2/2021 09:27

sceptic,what a sucker you are.

[wiganer] 12/2/2021 09:23

Try the Kool Aid.

[scepticalinvestor] 12/2/2021 09:18

Oh do calm down dear, hysterics is not becoming of oneself. Perhaps you should be the one drinking the tea. A tot of brandy may also do the trick.

[purchaseatthetop] 12/2/2021 09:04

sr2day....I cannot read your posts as you are filtered but having read your history of posts I imagine that it was clear, concise and professional. Maybe.

[scepticalinvestor] 12/2/2021 08:59

You are probably right!

[purchaseatthetop] 12/2/2021 08:56

Sceptical....three posts in a row! Time for a nice cup of tea, soft music and relaxxxxxxx........

[scepticalinvestor] 12/2/2021 08:42

Incredibly efficient bots - buys are two to one and this is dropping lolInsane

[scepticalinvestor] 12/2/2021 08:24

Lovely little bounce todayDidn't get to my 450 target to add but that is not a bad thing :)

[purchaseatthetop] 12/2/2021 07:44

jw330....fully agree 100%. IMO the next update will detail a repayment of debt of around $300m and continued reduction in revenue fall rate plus another gross margin improvement.
The market will then see the end of the old history of MCRO and rerate fully. Dividend+debt repayment+increased GM+slowing of rev fall+full integration of IT platform+new revenue streams (not old school ones) = transformation