The Micro Focus board proposes a final dividend of 15.5 cents, taking total dividend per share to 15.5 cents for the period. The dividend will be paid in Pound Sterling equivalent to 11.3 pence per share, based on an exchange rate of £1 = $1.37, the rate applicable on 8 February 2021, the date on which the board resolved to propose the dividend. Subject to approval by shareholders, the dividend will be paid on 15 April 2021 to shareholders on the register at 12 March 2021.
Other financial highlights include:
Micro Focus has completed the first year of a three-year turnaround plan and has made solid progress in the key objectives of evolving their business model and improving operational effectiveness.
Revenue decline moderated during the year from 11% reported in the first half of the year to 9% in the second half, with revenues of $3.0bn, a decline of approximately 10% at both actual and constant exchange rates. This is in line with expectations and starting to reflect the progress in the turnaround plan
Adjusted EBITDA of $1.2bn (FY19: $1.4bn) at an Adjusted EBITDA margin of 39.1% (FY19: 40.7%), towards the upper end of expectations, driven by tight operational cost control and several cost reduction programmes. These also contributed to the funding of planned investments in key opportunity areas.
The Group has successfully completed the first stage of IT systems migration in January 2021 with a significant number of employees now operating on the new IT platform. The remaining teams will be transitioned later in FY21.
The Group recorded an exceptional charge related to goodwill impairment of $2,799m in the period driven by changes in the Group's trading performance and overall environment when compared to the original projections produced at the time of the HPE Software acquisition. This impairment charge does not impact the Group's cash generation in the period which has remained strong.
Cash generated from operating activities of $1.1bn in FY20 (FY19: $1.1bn).
Adjusted cash conversion improvement of 17.3ppts to 112.6% in FY20 resulting in Free Cash Flow of $0.5bn (FY19 $0.6bn)
Successful refinancing of $1.4bn Term Loan in May 2020 means the Group now has no term loan maturities until June 2024.