Bug business slows but profits up at Micro Focus

MICRO FOCUS, the software group, yesterday reported that sales of products used to fix the year 2000 computer bug were flat in the second quarter of the year.

The news follows disappointing results from US software groups specialising in addressing the millennium bug problem, raising expectations that the boom sparked by the problem is fizzling out.

However Martin Waters, the chief executive of Micro Focus, said it was too early to draw that conclusion. "I don't think you can say this is a trend," he said. "It may be that revenues were affected because we reorganised our sales force halfway through the quarter."

Mr Waters added that projections for spending on the millennium bug remain strong. Gartner Group, the US market research firm, recently said that US companies are expecting to spend 44 per cent of their entire information technology budgets on the problem next year.

Sales of other Micro Focus products more than compensated for the slowdown, said Mr Waters. In the six months to June, pre-tax profits more than doubled to $15.8m (pounds 9.8m) on sales up 35 per cent to $97m. Shares in the group, which is in the process of completing a pounds 300m merger with Intersolv, its US rival, closed up 17.5p to 480p.