Micro Focus shares slump after sales decline at HPE Software
Shares in British technology company Micro Focus International slumped on Tuesday after the firm revealed falling sales at the software business it is buying from Hewlett Packard Enterprise.
Investors took flight at news that sales at HPE Software, which Micro Focus is acquiring for 8 billion US dollars (£6.6 billion), were down 10% in the quarter to April.
Micro Focus stock fell over 9% in morning trading to 2,382p.
Kevin Loosemore, Micro Focus chairman, described the decline as "disappointing", but said it is "not unusual given the level of change being undertaken".
Micro Focus, which has its headquarters in Newbury, Berkshire, has embarked on a series of acquisitions under Mr Loosemore. It snapped up Attachmate for 1.2 billion US dollars in 2014, and bought Serena Software last year for 540 million US dollars.
Neil Wilson, senior market analyst at ETX Capital, said: "It comes after an 8% drop in the preceding quarter and is sending investors running for cover who are maybe thinking the 8.8 billion US dollars acquisition of Hewlett Packard Enterprise's software business was not so clever after all."
In a trading update, Micro Focus said it expects to report flat to minus 2% on a constant currency basis for the full year.