* Annual revenues could fall 6-9 percent
* Chief operating officer to replacing departing CEO
* Shares lose more than half their value (Adds further executive comment, reaction)
LONDON, March 19 (Reuters) - Micro Focus International lost more than half of its value on Monday after Britain's leading software company ditched its CEO and cut its revenue outlook due to problems integrating assets from Hewlett Packard Enterprise.
The FTSE 100 company, which manages older software for customers including banks and airlines, also reported lower than expected licence income, wiping 4.6 billion pounds ($6.4 billion) off its market value in a matter of hours.
Previously little known, Micro Focus spent $8.8 billion in 2017 to buy HPE's software and join the ranks of leading European software makers. The deal included the old Autonomy business, another British firm bought by the U.S. company in an ill-fated deal five years earlier.
"We're finding the integration harder than we'd anticipated or planned," Executive Chairman Kevin Loosemore told Reuters. "(We have) no regrets at all (on the deal but) the returns clearly may be delayed slightly."
Headquartered in Newbury, west of London, Micro Focus was founded in 1976 and built itself up by growing its own software business and acquisitions, with the purchase of the much larger HPE transforming the company.
The group sells and licenses legacy software that had been neglected by previous owners, helping to extend the life of computers and avoid spending on newer systems. It competes with the likes of Germany's Software AG.
It focuses on improving margins, not the top line. But on Monday it was forced to say that issues relating to a new IT system had affected the sales team while HP's global customer accounts had been disrupted by its demerger.
It now expects revenue in the year to October 31 to fall by between 6 to 9 percent, compared with a forecast given in January of down 2-4 percent, a prediction that sent its shares down 17 percent at the time.
Micro Focus said Chief Executive Chris Hsu, who joined from HPE, had quit to spend more time with his family and would be replaced by Chief Operating Officer Stephen Murdoch who has been with the British firm for five and a half years.
Hsu was named chief executive in Jan. 2017 and took on the role following the completing of the HPE deal last September.
Loosemore, who has previously held senior roles at Cable & Wireless, Motorola and IBM, told Reuters the group's balance sheet remained strong and its dividend policy would not change, but he accepted the group's overall performance needed to.
It said it expected revenue in the first half of the year to be down between 9 and 12 percent, indicating it expects the second half to be better than the first.
"We need to recognise that this is not an acceptable performance and we now need to fix it," he said.
Investors had supported the strategy in recent years, with shares climbing 240 percent in the four years before the January warning, but Northern Trust said last week they had turned negative on the stock and its strategy of "rolling-up" -- acquiring -- assets.
"When interest rates are stuck close to zero and there is little growth in the world, using cheap debt to consolidate into an even stronger industry position and generate free cash flow seemed attractive to us," they said.
"But when global growth is starting to inflect upwards and interest rates (and cost of debt) are rising, this business model loses its scarcity value. Being a fan of a roll-up story while negative about the theme is no longer tenable we think." ($1 = 0.7146 pounds)
(Reporting by Kate Holton Editing by Guy Faulconbridge and Keith Weir)