Architect of Micro Focus growth exits as revenues tumble

Micro Focus’s long-serving millionaire chairman Kevin Loosemore is quitting the ailing company with shares crumbling again on Tuesday thanks to bleak sales figures.

The 60-year-old, also chairman of banknote printer De La Rue, led the tech giant’s phenomenal growth over the past 15 years, transforming a small $100 million turnover business when it listed in 2005 into a $3 billion giant, but the latter part of his reign was troubled.

Profit warnings triggered by problems integrating the software business of Hewlett Packard Enterprise (HPE) wiped billions off the company and saw it demoted from the FTSE 100.

Loosemore also sold more than half his shares for £12 million, prompting questions about his commitment.

He will leave on February 14 to be replaced by the former chairman of Computacentre, Greg Lock.

Loosemore’s exit coincided with more bad news as shares crumbled 15%, down 144p to 843p, on a worse than expected drop in revenues.

Problems with the HPE business mean sales are falling more quickly than expected. Revenue dropped 7.3% last year, worse than many expected. Last year sales fell only 5.3%.

Last August Micro Focus hired bankers to find out what went wrong with the HPE software deal.

A report today said a new set of IT systems, built by HPE so that the software division could stand on its own two feet, were “not fit for purpose”.

Micro Focus’s unwieldy structure — it had grown rapidly through bolt-on acquisitions — also meant an “inconsistent approach” to dealing with customers and “disconnected strategies”.

The company said it was working to fix these issues.

“I am pleased with the financial and operational progress we have made over recent months as we continue to to build a more dynamic environment where execution is faster, operations simpler and people more accountable,” said chief executive Stephen Murdoch.