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UPDATE 1-UK's Micro Focus reports smaller first-half loss on cost cuts

(Adds details, CEO comment, background)

July 1 (Reuters) - British software company Micro Focus International reported a smaller loss for the first half on Thursday as it slashed costs, and said it had set aside $70 million to resolve a patent infringement dispute with U.S. firm Wapp.

The company, which helps customers maintain and integrate legacy IT technology, posted a statutory operating loss from continuing operations of $154.8 million, compared with a loss of $906.7 million a year earlier.

“Our recovery programme and specifically our systems transformation are progressing as planned despite the challenges of executing this within the constraints of a global lockdown,” said Stephen Murdoch, who took over as chief executive in 2018.

Micro Focus launched a three-year turnaround plan in 2020 after the costly and difficult integration of its $8.8 billion acquisition of HPE’s software assets led to an impairment charge of about $2.8 billion.

The company said on Thursday it had recently transitioned to a single IT platform following the 2017 HPE acquisition, but added that it would continue to incur duplicate costs until the system was fully operational.

In March, Micro Focus said it would appeal a Texas jury verdict asking it to pay $172.5 mln in damages to Wapp group in a patent litigation. (Reporting by Yadarisa Shabong in Bengaluru; Editing by Aditya Soni)

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