REG - Alfa Financial Soft - Q3 Trading update

Alfa Financial Software HoldingsAnnouncement

14/11/2023 07:00

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RNS Number : 2813T  Alfa Financial Software Hldgs PLC  14 November 2023

14 November 2023

 

Alfa Financial Software Holdings PLC

Q3 Trading update

Performance in line with expectations

 

Alfa Financial Software Holdings PLC ("Alfa" or the "Company"), a leading
developer of mission-critical software for the asset finance industry provides
this scheduled update on trading for the quarter ended 30 September 2023.

 

Trading

Trading since the half year remains strong and in line with expectations, with
revenue of £25m consistent with the same period last year.

The financial highlights were:

·      Double digit growth in Subscription revenues continued the strong
sequential growth we have seen since we started to migrate away from perpetual
licences.

·      Software revenue is down versus strong chargeability in the third
quarter last year.  As expected, we have seen a lower run-rate than the first
half with reduced chargeable development days as a result of our H2 focus on
product investment and the reduction in the customised licence revenue
recognition as we transition to a subscription licence model.

·      Services revenue was slightly up on the same period last year.

 

Operational highlights

As planned, following a strong first half for chargeable development, we are
now focusing our engineering efforts towards future product roadmap
development as we release Alfa Systems 6 over the next twelve months. This new
version is a step-change in functionality on the existing technical platform
and is therefore available to existing customers through their standard
upgrade process.  Feedback from our customers at our US and European user
groups was overwhelmingly positive and we are confident that the new version
will drive incremental module sales.

With the increasing focus on Artificial Intelligence ("AI") across our client
base we have decided to integrate our development of AI more closely with our
product roadmap. We will therefore transfer the activities of Alfa iQ into
core Alfa to be marketed alongside our existing products under the same brand
name.

In the third quarter we have continued the strong delivery pace from the first
half with nine further go-live events, including a v4 to v5 go-live for a
long-standing UK banking customer and a go-live for the commercial asset
finance book of a bank. Since the end of the quarter we have had a successful
new UK Alfa Start go-live.

 

Pipeline and Outlook

At the end of August we had eleven prospects in the late stage pipeline, of
which ten were at preferred bidder status. Since then this has further
improved with the addition of another opportunity from the mid-stage pipeline.

We have just signed full contract packs for the European arm of a major US
automotive manufacturer and they will shortly go-live, illustrating how the
contracting process now often runs alongside paid delivery work under
individual letters of engagement. We are close to signing complete contracts
with two more from the late-stage pipeline.

Looking forwards the pattern of Q3 is expected to continue through into Q4. We
expect strong growth in subscription revenues and more modest growth in
services revenues as new projects start to ramp up. Software revenues will be
down due to a continued focus on non-chargeable product development work by
our internal team along with reduced customised licence revenue recognition as
a result of our ongoing migration to a subscription revenue model. Overall our
expectations for the full year to 31 December 2023 remain unchanged.

 

Andrew Denton, Chief Executive Officer of Alfa, said:

"I am delighted that we have continued to drive the business forwards
maintaining a high delivery cadence while evolving our product in line with
our roadmap. The marketing of Alfa Systems 6 has received strong positive
reactions from customers. Our pipeline remains as strong as I have ever seen
it, and I am excited to have welcomed yet another prestigious global
automotive brand into the Alfa family. The Board remains confident in its
expectations for the full year and in our prospects beyond that."

 

 

Enquiries

 

 Alfa Financial Software Holdings PLC      +44 (0)20 7588 1800
 Andrew Denton, Chief Executive Officer

 Duncan Magrath, Chief Financial Officer

 Andrew Page, Executive Chairman

 Teneo                                     +44 (0)20 7353 4200
 James Macey White

 Victoria Boxall

 Barclays                                  +44 (0)20 7623 2323
 Robert Mayhew

 Tom MacDonald

 Investec                                  +44 (0)20 7597 4000
 Patrick Robb

 Virginia Bull

 

 

Notes to Editors

 

Alfa has been delivering software systems and services to the global asset and
automotive finance industry since 1990.  Our agile methodologies and
specialised knowledge of asset and automotive finance enables the delivery of
large software implementations and highly complex business change projects.
 With an excellent delivery track record now into its fourth decade, Alfa's
experience and performance is unrivalled in the industry.

 

Alfa Systems, our class-leading technology platform, is at the heart of some
of the world's largest asset and automotive finance companies. 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. A cloud-native, end-to-end solution with
integrated workflow and automated processing using business rules, Alfa
Systems provides compelling solutions to asset finance companies.

 

Alfa Systems is currently live in 38 countries.  Alfa has offices in Europe,
Australasia and North America.  For more information, visit
www.alfasystems.com (http://www.alfasystems.com) .

 

 

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