Micro Focus gets mega boost after ‘back to basics’ strategy pays off

Software giant Micro Focus, which was hammered after a profit warning last year, stopped the rot on Thursday after going “back to basics”.

Major problems slotting in a recently acquired software business from Hewlett Packard last year sent shares off a cliff.

Shareholders breathed a sigh of relief today after full-year results came in better than expected and shares shot up 12% to 1685p.

Chief executive Stephen Murdoch reported that earnings had risen almost 10% to $1.5 billion (£1.2 billion) and said the firm was “back on track”.

“Our model is very simple. You look at every line of profit and loss and take out inefficiencies wherever you find them and concentrate on things that add value to customers. We got back to doing that.”

He said that sales teams had been slowed down by too many people in middle management so layers had been cut.

IT issues, which dogged the company after running two different systems because of the HP merger, were getting fixed gradually, he added.