Micro Focus shares fall to 13 year low; CEO leavesMarch 23, 2018
By: Herman Eggink
This week, Micro Focus issued a revenue (and profit) warning for the remainder of the year. The company expects revenue to decline between 6 and 9 percent over a 12-month period ending October 31, compared to the previous estimation of a drop between 2 percent and 4 percent.
As a result of this Micro Focus share price dropped by 56% to 823 pence, the largest fall in 13 years. CEO and Director Chris Hsu stepped down with immediate effect. It is said by Micro Focus that Hsu “wants to spend more time with his family.”
What does this mean? Since there is so much foreign debt in the company, is the market losing trust in their ability to recover? This will no doubt mean further (and immediate) job cuts impacting innovation and customer service beyond what I mentioned in my post in September. A shame because so many of my former colleagues who transitioned into Micro Focus now need to deal with the resulting struggle. Bizarre to read that the “cost savings drive was ahead of schedule” in the same statement containing a higher than expected revenue fall.
Micro Focus’s executive chairman, Kevin Loosemore, said operational issues had led to a “disappointing short-term performance” but that he remained confident in the firm’s strategy. He told Reuters news agency: “We’re finding the integration harder than we’d anticipated or planned.”
Whilst operational excellence is obviously key (isn’t it always), customer value (through innovation) and customer service are paramount. Extending the life of legacy is not driving customer innovation nor customer service.
Customer centricity really should be KING, right?