Micro Focus shares drop 30% on profit warning
Shares in software giant Micro Focus International fell as much as 30% after it said sales would be worse this year than expected.
The FTSE 100-listed firm had already warned in March revenue would be 4% to 6% lower for the year to 31 October.
It now says sales will be 6% to 8% below last year's because of the "deteriorating macro-environment".
The company, which bought Hewlett Packard's software business in 2017, is the largest UK-based tech firm.
The economic climate had resulted in "more conservatism and longer decision-making cycles" within the firm's customer base, Micro Focus said.
The Newbury firm, which sells software and consultancy services globally, has struggled to integrate the much larger US-based Hewlett Packard Enterprise, which it bought for £6.8bn ($8.8bn) two years ago.
Micro Focus will accelerate a strategic review of the group's operations as a result of the worsening expectations, chief executive Stephen Murdoch said.
The aim now would be to determine "where performance can be improved and how the business can be better positioned to optimise shareholder value", he said.
Mr Murdoch took over as chief executive in March last year. The firm's previous chief executive departed after acknowledging the merger was proving more difficult than anticipated.
"The words 'strategic review' rarely spell good news for investors, so it wasn't surprising to see the shares respond with a drop of 30% in early trading," commented Ian Forrest, investment research analyst at The Share Centre.
"[Hewlett Packard Enterprise] was not directly mentioned today, but it may well be part of the issue, as the company said in July the integration process was proving 'complex and significant'."