UK software giant Micro Focus has seen half of its valuation wiped off the London Stock Exchange after posting a sales warning this morning.
The Newbury-based vendor said in a trading update that the rate of revenue decline has been "greater than anticipated" since posting interim results in January, with the firm now set to miss its revised revenue guidelines in its current financial year, which ends in October.
Micro Focus said disruption caused by its acquisition of Hewlett Packard Enterprise's (HPE) software unit was a contributing factor.
The vendor also announced the resignation of its CEO Chris Hsu, who will leave immediately to "spend more time with his family and pursue another opportunity". COO Stephen Murdoch will take his position as chief executive.
Micro Focus saw its share price tank over 55 per cent following the announcement.
Kevin Loosemore, executive chairman at Micro Focus said: "We remain confident in Micro Focus' strategy while recognising that operational issues have led to a disappointing short-term performance and outlook.
"I would like to thank Chris Hsu for his leadership, tireless energy and enthusiasm over the past 15 months and wish him well in his new venture.
"Chris was instrumental in achieving the carve-out of the HPE software business in order that it be merged with Micro Focus. He has led a repositioning of the HPE Software portfolio to the needs of today's market and put in place a plan to increase our effective product investment as we integrate the companies."
Micro Focus said it expects revenue to decline between six and nine per cent this year, in constant currency, compared with 2017. EBITDA will however remain flat as a result of cost cutting.
The vendor highlighted four key reasons for the reforecasting, all of which are related to its acquisition of HPE's software business.
These were: issues implementing a new IT system, a greater-than-expected reduction in sales staff, disruption in global HPE customer accounts, and difficulties with sales in North America.
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