REG - Alfa Financial Soft - Q4 Trading update

Alfa Financial Software HoldingsAnnouncement

30/01/2025 07:00

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RNS Number : 1776V  Alfa Financial Software Hldgs PLC  30 January 2025

30 January 2025

Alfa Financial Software Holdings PLC

Q4 Trading update

Exceptional growth in TCV, increased profit for FY24

Alfa Financial Software Holdings PLC ("Alfa" or the "Company"), a leading
developer of mission-critical software for the asset finance industry provides
a scheduled update on trading for the quarter ended 31 December 2024 in
advance of the announcement of full year audited results, for the twelve
months ended 31 December 2024, on Thursday 13 March 2025.

 

FY 2024 Highlights

 

·      Operating profit growth for FY24 of 13% to £34m, some 5% ahead
of market expectations, with costs c£1m lower than expected.

·      Exceptional year for pipeline conversion, with eight contract
wins driving very strong growth in TCV versus last year, up 34% to £221m.

·      Revenue of £110m in line with market expectations, up 8% on the
prior year (9% on a constant currency basis).

 

Strong Q4 trading

 

As expected, revenue grew strongly to £29m for the quarter, up 21% on last
year and up 23% at constant currency.

 

Key financial highlights for Q4:

·      Continued strong sequential growth in Subscription revenues, up
17% versus Q4 last year.

·      Q4 Software revenues were up 84% versus Q4 last year.

·      Services revenues in Q4 grew 7% versus Q4 last year.

 

Operational performance

 

Alfa Systems 6 has now been fully launched across all regions. We have
received very positive feedback from customers and prospects. Alfa Systems 6
has continued to generate strong sales. We continue to invest in our product
with our focus now shifting towards client-led functional enhancements in
2025, which will allow us to maintain our lead over the market.

 

We had seven customer deliveries in the quarter, including two go-lives for
new customers, bringing the total for the year to 26 customer deliveries. Our
ability to successfully deliver implementations and upgrades remains a key
competitive advantage and the swift go-live of a US OEM client in December
using Alfa Start as an accelerator was a further demonstration of our strong
delivery capability.

 

Successful conversion of the pipeline

 

Q4 was an exceptional quarter for converting prospects into wins, with a total
of five wins. In addition to the two wins announced in November, we have also
converted the following three prospects:

 

·      An internationally recognisable OEM in the US

·      An Alfa Systems 6 upgrade for a leading UK bank

·      A specialist UK banking group using Alfa Start

 

This brings the total to eight wins for the year, significantly increasing our
TCV to record levels at £221m, up 34% from last year, or 37% at constant
currency.

 

We have also added two new US Auto finance prospects to the late-stage
pipeline. As a result, there are now eight prospects in our late-stage
pipeline. We are the preferred supplier and working under letters of
engagement with five of these.

 

We remain very confident in the overall strength of the pipeline from early
stage through to late stage. The diversity of end-markets represented in the
pipeline and in 2024's wins demonstrate the breadth of Alfa's continued
opportunity.

 

Renaming revenue streams

 

Over the last few years, the company has transitioned away from selling
perpetual licences to a SaaS licence model, in line with wider market trends
and shifting customer demand. We have therefore decided to align the
terminology of our revenue streams more accurately with the underlying
revenues.

 

Licence income is now largely recognised within the Subscription revenue
stream and the Software revenue stream mainly represents revenue generated
from our Software Engineering team. Services revenue arises from work
delivered by our delivery teams in the form of new implementations, upgrades
or delivery of other projects.

 

The methodology for which revenues are recognised and disclosed within each
revenue stream remains unchanged, this is simply a change of name.

 

·    Software revenue stream will now be named Software Engineering

·    Services revenue stream will now be named Delivery; and

·    No change of name for Subscription revenue stream.

 

Andrew Denton, Chief Executive Officer

 

"We are very pleased to see the momentum from Q3 continuing through Q4,
resulting in H2 revenues up 17% on last year and with operating profit ending
the year ahead of expectations. As well as being a good year financially, 2024
was also a hugely successful year for sales and the development of our
product. The record eight wins drove TCV up 34% to £221m and we have laid the
foundations for our future with the launch of Alfa Systems 6. We remain well
positioned to drive growth in 2025 and well beyond."

 

 

 

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

 Anusuya Gupta

 Investec                                  +44 (0)20 7597 4000

 Patrick Robb

 Virginia Bull

 Panmure Liberum Ltd                       +44 (0)20 3100 2000

 Rupert Dearden

 James Sinclair-Ford

 

 

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 37 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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