Micro Focus shares suffer as its profits tumble 40%

SLOWER-than-expected sales of new products and delays in computer purchases by companies were yesterday blamed by Micro Focus, the software company, for disappointing first-half figures and a warning that the full-year results would be below last time's, writes Heather Connon.

The company's shares have been among the most volatile in the market, falling from a high of pounds 30 in February 1993 to 798p in April. Yesterday they dropped from 1,063p to 873p, as it reported a 40 per cent drop in profits to pounds 7m, despite a rise in sales from pounds 40.8m to pounds 42.9m, for the six months to July.

Paul O'Grady, chairman, blamed the fall partly on changes in information technology departments as the domination of IBM gave way.

He said the company's relationship with IBM was being re-examined. Micro Focus's strength is in Cobol, a computer language mainly used for mainframe computers, which are being superseded by networks and desktop systems.

Earnings per share were 33.1p, down from 55.3p last time. There is no dividend.