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Business software company Micro Focus International PLC (MCRO.LN) said Thursday full year sales rose 20%, helped by its NetManage acquisition and its recession-busting IT improvement model, and said it is confident for the current year.

Micro Focus provides software and consultancy services to help clients update legacy IT platforms, a less costly solution than buying new systems, particularly for firms looking to save costs due to the economic downturn.

Micro Focus said sales in the year to April 30 rose to $274.7 million from $228.2 million last year, just shy of company consensus forecasts of $275.8 million, while net profit rose to $66 million from $55 million last time.

Adjusted earnings before interest, tax, depreciation and amortization, or Ebitda, which excludes exceptionals and share-based payments, rose 34% to $118.6 million.

Around 10% of revenue growth was generated organically with the remainder from acquisitions, most notably Netmanage, bought last year.

Micro Focus has a long term target of growing its business organically in the double-digits. It reiterated this long-term goal and said it views the current year with confidence despite the uncertain macro economic environment.

The company has also been on a recent acquisition spree to build out its software testing business, which ensures that software works properly as it is being developed.

It is in the process of acquiring Texas, U.S.-based software company Borland Software Corp. (BORL), and said Thursday that the prospectus will be issued shortly.

Micro Focus was forced to raise its offer for Borland earlier this month after a second bidder emerged. That bidder has withdrawn and the company's $88 million bid is being recommended by Borland's board.

Its other recent acquisition, of Compuware Corp.'s (CPWR) testing and automated software quality business, is expected to have a negative impact on margins, Micro Focus said.

The group improved its adjusted Ebitda margins in the full year to 43% from 39% last year but now expects this to fall back following the Compuware acquisition. The company didn't say by how much.

Still, the margin improvement was ahead of expectations, Panmure Gordon analyst George O'Connor said, and the results were in-line, with cash generation a real positive.

The company generated $105 million in cash from continuing operations, up from $91 milion last year, and will use some of its $72 million cash balance at April 30 to fund its acquisitions.

The company proposed a final dividend 11.1 cents, up from 9.4 cents last time, bringing the total dividend to 15.6c, up 20%.

Shortly after the open Thursday, Micro Focus shares rose 1.3% to 380p.

-By Kathy Sandler, Dow Jones Newswires; 44-207-842-9293; kathy.sandler@dowjones.com