Focused.

Everything we do must add value to our business and our customers’ businesses. With 35 years of R&D and customer experience, Micro Focus aims to be at the heart of the world’s business applications. A large addressable market is turning to our innovative software to reduce costs and improve productivity. By effectively selling leading software products we are focused on our customers and building a platform to deliver superior shareholder returns going forward.

Key highlights 2011

Revenue

$436.1m

Group revenue up 0.8% to
$436.1m (2010: $432.6m)

 

Like for like pro-forma* constant currency revenue declined by 6%

 

Like for like pro-forma* constant currency licence and maintenance revenue declined 15.2% and 0.5% respectively

Adjusted EBITDA**

$158.7m

decreased by 8.4% (2010: $173.3m) margin of 36.4% (2010: 40.1%)

Cash conversion

126.4%

Strong cash conversion
(2010: 80.1%)

Net debt

$14.9m

Net debt at 30th April reduced to $14.9m (2010: $68.2m) after share buyback of $42.0m

Adjusted earnings per share**

54.85c

Adjusted earnings per share down
4.2% to 54.85c (2010: 57.26c)

Proposed final dividend

16.2c

Proposed final dividend of 16.2c
per share (2010: 16.2c)

Proposed total dividend

23.4c

Proposed total dividend of 23.4c per share (2010: 21.8c) increase of 7.3%

*
AMQ was formed through the acquisitions of the ASQ division of Compuware on 29 May 2009 and Borland on 27 July 2009 respectively. Pro forma revenues represent management’s estimate of the comparable revenue if the businesses had been owned throughout the year ended 30 April 2010.
**
In assessing the performance of the business, the directors use non GAAP measures “Adjusted EBITDA”, “Adjusted operating profit” and “Adjusted earnings per share”, being the relevant statutory measures, prior to exceptional items, amortisation of purchased intangibles and share based compensation. Exceptional items, share based compensation and amortisation of purchased intangibles are detailed in note 4. EBITDA and Adjusted EBITDA are reconciled to operating profit in note 4. Earnings per share are detailed in note 8.

Executive Chairman’s statement

The year ended 30 April 2011 was a disappointing year for Micro Focus with the financial performance being significantly below the expectations of both the management and the financial markets.

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Operational and financial review

During the year ended 30 April 2011, Micro Focus’ primary reporting segments were its three geographic regions (i) North America, (ii) Europe, Middle East, Latin America and Africa, and (iii) Asia Pacific for its CDMM products and then separately for AMQ.

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Corporate social responsibility

The board, management team and employees are committed to operating the Group in accordance with best practice in corporate social responsibility.

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Principal risks and uncertainties

The Group, in common with all businesses, could be affected by risks which could have a material effect on its short-term and longer-term financial performance.

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