Micro Focus shares lifted by surprise first-half revenue rise

* First (Other OTC: FSTC - news) -half revenue beats expectations with 1.2 pct rise

* Adjusted core earnings on pro forma basis up 7.8 pct

* Shares (Berlin: DI6.BE - news) up 4 pct to two-month high (Adds CEO comments, analyst reaction, shares)

By Paul Sandle

LONDON, Dec 14 (Reuters) - Micro Focus International (Frankfurt: M7Q4.F - news) , the British IT firm buying Hewlett Packard Enterprise Co's software business, said it had made good progress in its first half-year, with better-than-expected revenue and earnings growth.

The company, which specializes in maintaining and upgrading older software systems, reported a 1.2 percent rise in pro-forma revenue of $684.7 million on Wednesday, surprising analysts who were expecting a slight dip.

Executive Chairman Kevin Loosemore said he was nevertheless maintaining a revenue growth forecast of between zero and minus 2 percent for the year as a whole.

"People are probably slightly surprised that revenue grew, they were expecting a minor decline in the first half," he said.

"Overall, lots of things went well in the first half of the year, notwithstanding the fact that we were doing a lot of other stuff in terms of integrating Serena Software (acquired at the start of the period) and buying HPE."

The HPE deal is expected to close on the third quarter of 2017, he said, but the company was booking some costs this year.

Micro Focus has grown by acquiring older software that has been neglected by its owners. It then squeezes more profit out of the assets by focusing on licensing deals and upgrade and maintenance services.

Shares in Micro Focus Intl (Swiss: OXMCRO.SW - news) jumped 4 percent to trade at a two-month high of 2,216 pence, topping the FTSE 100 index .

Analyst David Toms at Numis said the group delivered a 9 percent beat on earnings per share (EPS), and increased his full-year EPS forecast to $0.89.

"Deal timing can always benefit individual periods, thus we are a little cautious on our upgrades, but we reflect some of this outperformance through to FY17," he said.

Micro Focus Intl reported adjusted earnings before interest, tax, depreciation and amortisation of $332.5 million, up 7.8 percent, for the six months to Oct (HKSE: 3366-OL.HK - news) . 31.

It increased its first-half dividend by 75.5 percent to 29.73 cents a share. (1 British pound = $1.2661) (Editing by Costas Pitas and Alexander Smith)