16 September 2019
Alfa Financial Software Holdings PLC
Trading Update and Notice of Results
Alfa Financial Software Holdings PLC ('Alfa') provides the following update on trading, ahead of its interim results which will be released on Thursday 26 September. Revenues for the half year are expected to be approximately £31m (2018: H1 £32.9m) with operating profit of approximately £5m (2018: H1 £8.6m), reflecting delays in the implementation of particular projects and a reduction in customer spend on optional upgrades and non-critical work driven by the broader macro uncertainty.
Notwithstanding these delays, Alfa has successfully gone live with a project for a global OEM in Europe and has carried out work with two new EMEA customers in advance of finalising licence agreements. All of these customers contributed significant revenues in the first half. Alfa has a strong installed customer base, solid recurring revenues and committed implementation projects.
Looking forward, the Board anticipates baseline revenue for the full year to be in the region of £63-£65m, based on existing customer agreements and assuming that the challenging market conditions that prevailed in the first half of the year continue. This range does not include potential revenue upside of up to approximately £4m, partly relating to finalising new licence agreements and partly relating to finalising licence and maintenance settlement arrangements with an existing customer. Each of these is well advanced but the timing and recognition of these items remains uncertain.
Competition for talent is high across our markets and consequently we expect to award remuneration increases for our delivery teams in excess of general inflation rates. Additionally, we expect to incur some one-off legal costs in the second half of 2019.
As a result, the Board now expects Alfa's full year profit for 2019 to be significantly below its previous expectations.
Alfa continued to generate significant levels of cash in H1 and remains in a strong financial position, ending H1 with net cash of £53.3m (2018: H1 £44.9m). Whilst we remain cautiously optimistic regarding pipeline development, we anticipate the broader macro uncertainty impacting our markets extending into 2020.
Alfa will announce its interim results for the period ended 30 June 2019 on Thursday 26 September. A presentation will be held for analysts on the day of the results. For further information, please contact firstname.lastname@example.org.
Alfa Financial Software Holdings PLC 0207 588 1800
Andrew Denton, Chief Executive Officer
John Miller, Interim Chief Financial Officer
Andrew Page, Executive Chairman
Tulchan Communications LLP 0207 353 4200
James Macey White
Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) ("MAR") prior to its release as part of this announcement and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
Notes to Editors
Alfa has been delivering systems and consultancy services to the global asset and automotive finance industry since 1990. Our best practice methodologies and specialised knowledge of asset finance mean that we deliver the largest software implementations and most complex business change projects. With an excellent delivery history over nearly three decades in the industry, Alfa's track record is unrivalled.
Alfa Systems, our class-leading technology platform, is at the heart of some of the world's largest asset finance companies. Key to the business case for each implementation is Alfa Systems' ability to replace multiple client systems on a single platform. Alfa Systems supports both retail and corporate business for auto, equipment, wholesale and dealer finance on a multijurisdictional basis, including leases/loans, originations and servicing. An end-to-end solution with integrated workflow and automated processing using business rules, the opportunities that Alfa Systems presents to asset finance companies are clear and compelling.
Alfa Systems is supporting portfolios in 20 countries and Alfa has offices in Europe, Asia-Pacific and North America. For more information, visit www.alfasystems.com.
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