Results out 6/12/2007/ Promises are positive.

Projected earnings are reasonable.

But DYOH

StockMarketWire.com
Micro Focus has posted a pre- tax profit of $114.5m for the year to 30 April 2011 which is in line with previous guidance but below management expectations at the start of the year.

Group revenue was $436.1m, up 0.8%, but like-for-like revenues at constant currency declined by 6.0%.

Net debt at 30 April 2011 was reduced to $14.9m (2010: $68.2m), after a share buyback of $42.0m.

The Group has maintained the final dividend for the year at 16.2 cents per share (2010: 16.2 cents per share) giving an increase in total dividend per share for the year of 7.3% to 23.4 cents (2010: 21.8 cents).

Going forward the Group says that it intends to concentrate on protecting margins and will avoid taking on loss-making consultancy projects and it is likely therefore that in the near term that overall sales will decline.

Discussions with regard to potential offers for the Group continue but no update has been provided.

RBS note out today:
Todays statement from Micro Focus all feels like hard work; numbers are at the low end of expectations, the outlook points to limited momentum and there is no progress on the bid talks. The shares are likely to drift while the uncertainty continues.
Full-year results today look indifferent with revenues of $436m (vs guidance of $432m-442m) and adjusted EBITDA of $158.7m vs guidance for $159m-167m. Our numbers expense capitalised R&D. On that basis adjusted EBITDA was $149.5m vs our $152mF. These numbers reflect -6% organic growth. Meanwhile, cash numbers look good with strong working capital and accrued income trends and lower-than-expected cash tax. Overall, net debt came in at $14.9m, ahead of $33mF despite $42m of buybacks
The outlook statement points to a challenging near-term outlook, with the company indicating that licences need to return to growth (after -15% growth in FY11) in order to offset an anticipated decline in maintenance revenues. Forecasts already assume little in the way of growth, so there may not be dramatic forecast changes. However, there is clearly limited short-term momentum.
Aside from trading, it is disappointing that there is no update on the bid process, other than to say it is ongoing. The lack of conclusion implies a difficult sale process, which we believe has negative implications for pricing. Furthermore, management appears to be softening investors up to an independent future, with references to the "board considering all options to deliver shareholder value".
On unchanged numbers, the shares trade on a Dec 2011 EV/ nopat of just 11.4x, which looks undemanding and supports a medium-term buy stance. However, we acknowledge that given weak trading outlook and lack of bid conclusion, the shares are likely to drift while the uncertainty continues. In terms of downside support, it is worth noting that the company bought shares back before the bid talks at 323p.

Panmure note:
Who is the most materially undervalued of them all?
Results from IBM bode well for Micro Focus IBM reported that System z mainframe revenue was up 61%; MIPS up 86% YOY. This suggests that the Micro Focus user base is continuing to invest in their Cobol assets. This gives some comfort that Micro Focus can tap into growth. Similar to Misys, Micro Focus shares have been caught up in the fear replaces greed effect, due to a lack of news on the takeover. Micro Focus shares are likely to drift even though this is one of the most undervalued shares on an EV/EBITDA basis at 6.4x the sector average is 9.0x, and there is no bid premium in the share price. The P/E is 8.7x, FCF yield 12.3% and the dividend yield 5.3% (cover is 2.1x). Yes, the lack of bid news will leave the share price dangling in our view, but we retain our Buy.

Micro Focus International plc ("Micro Focus" or "the Group", LSE: MCRO.L) provides its Interim Management Statement for the period from 30 April 2011 to the date of this statement. Financial performance as described relates to the three month period ended 31 July 2011.

Trading ahead of Board expectations
Total revenues in the three months to 31 July 2011 were ahead of the budget approved by the Board on 14 April 2011 and similar to the prior year comparative period on a constant currency basis. The restructuring activity undertaken in the final quarter of last financial year resulted in costs being lower than the comparable period. As a result of these factors, Adjusted EBITDA was also better than the Board's expectations.

Financial position
After taking account of the $15m cash paid in acquiring the Group's headquarters building in Newbury and the cash outflow of $6.4m relating to the restructuring charges of $19m that were unpaid at 30 April 2011 the Group had a net cash position at 31 July 2011 of $0.8m. This compares to a net debt position of $14.9m at 30 April 2011 demonstrating further strong cash generation during the period.

If approved by shareholders at the AGM in September, the final dividend of 16.2 cents per share will be paid out at the end of September at a cost of approximately $32m. The full year dividend for the year ending 30 April 2011 would then be a total of 23.4 cents per share.

Offer Period update
The Group remains in an offer period and the Board continues to explore the potential to deliver value to shareholders through a transaction more quickly than is likely through the continued operational turnaround of the business. The Board believes that there is merit in continuing the current discussions, although there can be no certainty that an acceptable offer will be forthcoming, nor as to the timing of any such offer.

StockMarketWire.com
On 26 April 2011, Micro Focus International plc announced that it had received a very preliminary approach to acquire the Group.

Since then, the Board has held a number of discussions with third parties in relation to various potential transaction structures in order to establish whether a suitable offer for the Group would be forthcoming.

After engaging in discussions for a suitable period, the Board set a deadline for final offers of 19 August 2011. Based on feedback now received from these parties, the Board has terminated discussions and, as a result, Micro Focus is no longer in an offer period.

The Group also announces that, with immediate effect and at its sole discretion, it intends to resume on-market purchases of the Group's ordinary shares under its existing shareholder authority.

The Group currently has 197,816,844 ordinary shares in issue (excluding 8,206,992 held in Treasury) and having already bought back 8,223,092 shares since the last AGM, has remaining authority from shareholders to buy back up to 12,298,791 ordinary shares.

Micro Focus offer talks terminated


On 26 April 2011, Micro Focus International plc announced that it had received a very preliminary approach to acquire the Group.

Since then, the Board has held a number of discussions with third parties in relation to various potential transaction structures in order to establish whether a suitable offer for the Group would be forthcoming.

After engaging in discussions for a suitable period, the Board set a deadline for final offers of 19 August 2011. Based on feedback now received from these parties, the Board has terminated discussions and, as a result, Micro Focus is no longer in an offer period.

was nearly tempted in; so glad i wasn't

ahhh cynic hello
ditto that

StockMarketWire.com
Bain Capital says it is not considering a possible offer for Micro Focus.

For the purposes of Rule 2.8 of the City Code on Takeovers and Mergers, Bain Capital does, however, reserve the right to make an offer for Micro Focus within six months (1) with the agreement or recommendation of the board of Micro Focus; (2) in the event that a third party makes an announcement of a firm or possible offer for Micro Focus; (3) in the event that Micro Focus announces a 'whitewash' proposal or a reverse takeover; (4) if there is a material change of circumstances.

AGM Statement
Micro Focus International plc ("Micro Focus" or "the Group", LSE: MCRO.L), holds its AGM at 3.00pm today at which the following statement will be made by the Group's Executive Chairman, Kevin Loosemore:

"Total revenues and Adjusted EBITDA continue to track ahead of the Board's originally budgeted expectations. The Board remains comfortable with its previous outlook guidance.

At 31 July 2011, the Group had net cash of $0.8m. Since 28 March 2011, the Group has bought back a total of 20.5m shares for a total outlay of $104.9m (65.5m) at an average price, including costs, of 319 pence per share.

At today's AGM, Micro Focus is seeking to renew its annual buyback authority up to a maximum of approximately 29.6m shares in order to give the Group the flexibility to continue the current on-market share buyback programme, should the Board so determine. In parallel to renewing this authority, the Board is continuing to evaluate its options with regards to alternative methods of returning capital to shareholders and the optimal timing and amount of any such return. The Board is keen to ensure that management's focus is on improving trading within the business and is mindful that in the current unstable macroeconomic climate it is prudent to maintain a relatively conservative balance sheet."

Micro Focus will announce a pre-close trading update for the six months to 31 October 2011 on 15 November 2011.

StockMarketWire.com
Micro Focus International reveals that both revenues and adjusted EBITDA for the six months to 31 October 2011 were above the range of analysts' expectations for the period.

On a constant currency basis revenues declined slightly compared to the prior year period, in line with Board expectations and consistent with the outlook statement included within last year's preliminary results, although favourable exchange rate movements will result in revenues being marginally ahead of the "as reported" comparable figure.

Adjusted EBITDA margin was approximately 40%, reflecting lower costs as a result of restructuring activity, as well as some benefit from exchange rate movements.

During the first half of the year the Group acquired its head office building in Newbury for $15m, bought back shares for $62m and paid $31m in a final dividend.

Following these cash outflows, at 31 October 2011 the Group's net debt position was $48m (30 April 2011: $15m) demonstrating further strong operating cash generation during the period.

The Directors of Micro Focus International plc are pleased to announce the agreement of a new banking facility with an enlarged group of banks comprising Barclays Corporate, Clydesdale Bank plc, HSBC Bank plc, Lloyds TSB Bank plc, and The Royal Bank of Scotland plc.

The new $275 million three year revolving credit facility will replace the existing $215 million revolving credit facility with Barclays Corporate, HSBC Bank plc, Lloyds TSB Bank plc, and The Royal Bank of Scotland plc which was due to expire in May 2012.

The margin on the new facility will be at the London Interbank Offered Rate(LIBOR) plus 1.75% - 2.35%, compared with LIBOR plus 2.25% - 2.75% in the existing facility, based on net debt to EBITDA ratio of up to 2.0 times. The financial covenants are (1) EBIT to interest cover ratio of a minimum of 4 to 1 and (2) Net debt to EBITDA limits of 2 times until 30 April 2013 and 1.5 times thereafter.

The new facility will be initially utilised to repay the outstanding gross debt under the existing facility which today stands at $70 million. Going forward, it may be used for acquisitions, dividends and/or share buy-backs and general corporate purposes.

Wonder what caused the rise in borrowings of $22m since 31st October - when they are supposed to be cash generative.

StockMarketWire.com
Micro Focus International has reported a 20% rise in pretax profit for its first half and confirmed it plans to return $130.4 million in cash to shareholders.

The company, which earlier in the year attracted bid interest from private equity houses Bain Capital LLC and Advent International Corp. but abandoned takeover talks in August, said it decided to return cash to shareholders after renewing its $275 million credit facility on improved terms last week. Under the plans, investors will be able to choose whether they receive the cash in the form of income or capital.

Micro Focus the software and IT consultant, saw its profit increase despite only a small rise in revenue as it reined in administrative costs and abandoned some loss-making product lines.

For the six months ended Oct. 31, the company made pretax profit of $75.8 million, compared with $63.2 million a year earlier. Revenue was up 1.6% at $219.2 million, although it fell 2.6% excluding the impact of currency movements.

Micro Focus raised its interim dividend 14% to 8.2 cents a share.

Ex-divi 4th Jan 2012 (5.26p)

"At the general meeting of Micro Focus held at The Lawn, 22-30 Old Bath Road, Newbury, Berkshire, RG14 1QN at 10.00 a.m. on 6 January 2012 the special resolution, set out in the circular published by the Company on 14 December 2011, to approve the adoption of new articles of association, the proposed return of value to shareholders of 45 pence per share via a B/C share scheme and the 22 for 25 share capital consolidation, was passed by shareholders. The full text of the resolution is shown in the notice of general meeting available on the Company's website at: www.microfocus.com"

StockMarketWire.com
Micro Focus International reports that trading in the three months to 31 January 2012 was in line with management expectations.

Following the Return of Value to shareholders of 45 pence per share totalling US$130m together with the Interim Dividend of 5.26 pence per share at a cost of US$15m, the Group's net debt position at 31 January 2012 was US$156m (31 October 2011: US$47.6m) demonstrating further good operational cash generation during the period.

Management's expectations for the six months to 30 April 2012 remain that there will be a similar revenue and Adjusted EBITDA performance to that achieved in the first half of the financial year.

Investec note :
"BUY - Micro Focus offers a low-risk, cash-backed value play, with re-based forecasts looking secure and any modest upside likely to support continued stock outperformance."

Brokers fully behind the stock
and not suprising a tech stock on a P/E
of just 9.6 for next year.

FAR too cheap.

Micro Focus International PLC

FORECASTS 2012 2013
Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)

Panmure Gordon
11-04-12 BUY 106.03 43.30 61.28 111.71 46.83 17.86
Peel Hunt
05-04-12 HOLD 102.68 45.89 17.87 102.46 46.80 20.35
Canaccord Genuity Ltd
05-04-12 BUY 107.85 46.62 16.76 108.73 51.66 18.46
Singer Capital Markets Ltd
02-04-12 BUY 102.18 42.57 15.70 103.64 48.50 17.30
Numis Securities Ltd
13-03-12 BUY 98.75 42.20 104.26 48.67
Broker Name Withheld 3
22-02-12 BUY 109.50 48.22 17.26 110.39 53.15 19.01
Investec Securities
07-12-11 HOLD 102.34 36.24 15.70 106.78 37.82 16.49
Execution Noble [W]
22-09-11 NEUT 80.32 33.96 14.67
Merchant Securities Limited
15-09-11 SELL

2012 2013
Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)

Consensus 104.26 44.24 26.12 106.83 48.52 18.45

1 Month Change 0.66 0.51 0.30 0.70 1.35 0.00
3 Month Change 1.95 3.18 9.61 0.42 4.72 0.62


GROWTH
2011 (A) 2012 (E) 2013 (E)

Norm. EPS -14.13% 36.60% 9.67%
DPS 53.46% 65.74% -29.37%

INVESTMENT RATIOS
2011 (A) 2012 (E) 2013 (E)

EBITDA £93.39m £111.81m £114.19m
EBIT £73.05m £101.20m £102.59m
Dividend Yield 3.37% 5.59% 3.95%
Dividend Cover 2.06x 1.69x 2.63x
PER 14.43x 10.56x 9.63x
PEG -1.02f 0.29f 1.00f
Net Asset Value PS -47.84p 36.51p 68.22p

Extract from Vector Vest Analysis today.....

MCRO Micro Focus International


Capital Appreciation

Value: Value is a measure of a stock's current worth. MCRO.L has a current Value of 685.69p per share. Therefore, it is undervalued compared to its Price of 467.30p per share. Value is computed from forecasted earnings per share, forecasted earnings growth, profitability, interest, and inflation rates. Value increases when earnings, earnings growth rate and profitability increase, and when interest and inflation rates decrease. VectorVest advocates the purchase of undervalued stocks. At some point in time, a stock's Price and Value always will converge.

RV (Relative Value):

RV is an indicator of long-term price appreciation potential. MCRO.L has an RV of 1.38, which is very good on a scale of 0.00 to 2.00. This indicator is far superior to a simple comparison of Price and Value because it is computed from an analysis of projected price appreciation three years out, AAA Corporate Bond Rates, and risk. RV solves the riddle of whether it is preferable to buy High growth, High P/E stocks, or Low growth, Low P/E stocks. VectorVest favors the purchase of stocks with RV ratings above 1.00.