Micro Focus Share Discussion Threads

[sogoesit] 20/7/2016 13:52

I am assuming, but concur if so, that MCRO believe there is an optimal amount of gearing in its capital structure to manage its business & ensure or maximise its growth. Any other cash left on the balance sheet is therefore sub-optimal & is better returned to shareholders for them to utilise in seeking other, better, investment returns. If they cannot they can, as I do, re-invest the returns in the stock.
The latter option, together with income provision to investors in an income starved world, has the advantage that it keeps the stock (paper) in demand for future growth opportunities.
Just my view.

[ringer12] 20/7/2016 11:31

Excuse my ignorance but why does MCRO favour a return of value special dividend rather than simply reducing debt? What is the advantage?

[sogoesit] 20/7/2016 08:38

Chronic Investor comment from last week:

"Decrepit servers and dilapidated mainframes can prevent organisations from realising the efficiencies of a mobile workforce and cloud-based applications. Micro Focus International (MCRO) provides software that modernises and squeezes value out of IT infrastructure, and has used acquisitions to expand its product range and accelerate growth. Although comparable sales fell in the reported period, underlying cash profit climbed 9 per cent to $533m (£400m).

Underlying sales slid 6 per cent in the mature Micro Focus business. Identity, access and security licensing revenue leapt 22 per cent, but that was offset by management's push to align the consulting business more closely with licensing work, as well as tepid maintenance demand. The star performer was the SUSE division, which provides open source software, enterprise servers and cloud storage. Sales there leapt 18 per cent to just over a fifth of group turnover. Total adjusted operating costs also fell a tenth to $712m due to careful spending, cost-cutting and the integration of Attachmate, which Micro Focus acquired for $2.5bn in 2014.

Robust cash generation and a placing meant net debt shrunk 23 per cent to $1.08bn. But the group's recent $540m takeover of peer Serena Software means it has rebounded to just over management's targeted ratio of 2.5 times adjusted cash profit. Nonetheless, management hiked the final dividend by half, committed to a higher payout ratio and expects to reinstate the group's famed 'returns of value' - which were suspended following the Attachmate deal - in 2017. Numis analysts estimate it will have $250m, or 80p a share, available for return next summer.

Management expects underlying sales to be flat or slightly down this financial year as it establishes a solid foundation, before returning to growth in FY2018. Broker Panmure Gordon expects pre-tax profit of $521m for the year to April 2017, giving EPS of 168¢ (from $436m and 148¢ in FY2016)."

[silverfern] 19/7/2016 07:52

MArket cap needs to be north of £4.5bn to get into FTSE100- share price of over £20 to do that

[montyhedge] 18/7/2016 18:45

No revenue growth for 2017, that's my only concern.

[ringer12] 18/7/2016 17:25

Citi Group reiterates target 2100P. That would do nicely but how many times do they get it right?!

[bigbertie] 18/7/2016 09:38

Up this morning - ARM takeover reminding the market how attractive British technology companies are?

[montyhedge] 17/7/2016 20:42

Ft review I thought could have been better on Micro. Bit harsh I thought.

[montyhedge] 17/7/2016 18:11

That worries me no revenue growth 2017, probable that could effect entry into FTSE 100 surely they got to keep growing revenue.

[orange1] 17/7/2016 13:17

If the company is included in the FTSE 100 tracker funds will buy. At the same time other funds and investors will sell for varying reasons. So it doesn't follow that because there are buyers the price will automatically rise. The price will only rise if there are more buyers than sellers. Market forces, as ever, determine the direction of the price.

[mrthomas] 17/7/2016 12:41

fyi the next re balance takes place on the 21 september but the decision make two weeks before so in affect early part of september. Think the value will need to be around £market cap 5B as some one said before but it a moving target

Of course if gets to FT100 then will go up even more as funds have to buy in etc as was stated in other comments

[montyhedge] 15/7/2016 20:34

No revenue growth for 2017, wonder why, is this the best it gets?

[montyhedge] 14/7/2016 21:25

Will get in the FTSE 100 next meeting that's my view.

[trigger16] 14/7/2016 15:18

Wow full steam ahead - not far off the FTSE100 now...

[montyhedge] 14/7/2016 14:25

Pe 20 still good for tech company.

[sogoesit] 14/7/2016 14:20

Oops... I mispriceed this today... ;-)
Oh well, £21 here we come...
(Post consolidation price was 1095p so the add-on merger should double that in theory).

[montyhedge] 14/7/2016 13:29

Just hope they keep it going growing revenue. I don't think so. But I do like it.

[orange1] 14/7/2016 10:59

So montybilge wants us to believe he´s been holding since 635p. Yeah right ....

montyhedge - 15 Jul 2015 - 19:07:53 - 2213 of 2592
Don't touch, could be another dump of shares at anytime. Then bang down another 6%. I thought lock up period was until Nov 15 they must have cash in thinking the shareprice was at its peak.
That's why I sold.

[montyhedge] 14/7/2016 10:44

SoWhat it says for coming year. But look back posts held these from 635p.So not complaining.

[orange1] 14/7/2016 09:37

>Sogoesit

Montybilge really hasn´t got a clue. He talks his own book and just spouts any old rubbish that meets his purpose. Ignore him, laugh at him, ridicule him but whatever you do don´t for one moment think that he knows what he is talking about.

[apfindley] 14/7/2016 09:16

GWMO looking good still £1mill market cap copper-gold explorer with a massive license area in nevada, with highly visible mineralisation. Multibagger coming as they're just starting to drill. Copper at just 2 of their many finds is stated by the ceo to be worth $200mill each.Get in before the crowds before it multibags.GWMO boooooooom time

[sogoesit] 14/7/2016 09:03

Mr Hedge, your post 2583, I find a bit surprising... shocking more like.
How long you been invested, or "playing", this company?

[montyhedge] 14/7/2016 08:33

I filtered that idiot months ago.