REG - Alfa Financial Soft - 2025 Half Year Report
04/09/2025 07:00
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RNS Number : 9241X Alfa Financial Software Hldgs PLC 04 September 2025
4 September 2025
Alfa Financial Software Holdings PLC
2025 Half Year Report
Strong H1 execution, Outlook remains positive
Alfa Financial Software Holdings PLC ("Alfa" or the "Company"), a leading
developer of software for the asset finance industry, today publishes its
unaudited results for the six months ended 30 June 2025 ("the period").
Financial highlights:
· Trading in line with expectations, on track to meet full year
expectations
· Revenue of £62.5m (H1 2024: £52.3m) up 20% or 22% at constant
currency
· ARR of £41.6m up 16% (H1 2024: £35.8m) with NRR of 112% (30
June 2024: 106%)
· Very strong Software Engineering revenues in H1 (up 72%) drove
high first half operating profit margin of 35% (H1 2024: 31%)
· TCV of £211m up 9% (H1 2024: £193m) driven by ongoing growth in
subscription revenue
· Next 12 months TCV up 25% to £90m (H1 2024: £72m)
· Robust balance sheet position with £23.9m (31 Dec 2024: £20.5m)
of cash and no bank debt
· Special dividend of 5.0 pence per share (£14.8m) declared
reflecting sustained strong growth in cash generation and continued capital
allocation discipline
Financial summary
Results
£m, unless otherwise stated H1 2025 Unaudited H1 2024 Unaudited Movement %
Revenue 62.5 52.3 20%
Operating profit 21.6 16.2 33%
Profit before tax 21.5 16.1 34%
Earnings per share - basic (p) 5.38 4.05 33%
Earnings per share - diluted (p) 5.35 4.00 34%
Special dividend per share (p) 5.0 4.2 19%
£m H1 2025 Unaudited 31 Dec 2024 Movement %
Audited
Cash 23.9 20.5 17%
Key measures ((1)) H1 2025 Unaudited H1 2024 Unaudited Movement
£m, unless otherwise stated %
Revenue - constant currency 62.5 51.4 22%
Cash generated from operations 22.0 18.8 17%
Operating free cash flow conversion (%) 88% 95% (7)%
Total Contract Value (TCV) 211 193 9%
((1) See definitions section for further information regarding calculation of
measures not defined by IFRS.)
( )
Strategic highlights:
Growing SaaS subscription revenues
· 17% growth in subscription revenues versus H1 2024
· ARR of £41.6m up 16% on last year
· NRR of 112% boosted by new customers subscription revenues
increasing through the implementation phase
· 12% growth in subscription TCV versus H1 2024
· Alfa Cloud customers now total 23 (H1 2024: 20), 16 live with 7
in implementation
Strong sales and delivery momentum
· Strong late-stage pipeline with 7 prospects
· Six out of seven customers in late-stage pipeline working under
letters of engagement
· Nine customers upgraded to Alfa Systems 6
Sustained Investment in product, people, planet
· Further development of our software with £19.4m investment in
software (H1 2024: £18.8m) increasing our competitive lead
· Particular focus on additional functionality in US Auto
Originations, Fleet and Commercial Finance, which will increase our
Serviceable and Target Addressable Markets
· Average headcount of 508 up 7% versus H1 2024 with high staff
retention (97%)
Outlook
The exceptionally strong conversion of wins in 2024 resulted in a step up to a
record level of TCV at the prior year end creating an excellent foundation for
continued long term growth. We are working under letters of engagement with a
number of customers in the late-stage pipeline and expect to continue this
work in the second half ahead of signing full contract packs. The very
strong performance in the first half of the year was driven by an expected
large increase in software engineering revenues. In the second half of the
year, we expect a lower level of software engineering revenues and an impact
from planned increases in headcount investment and salary costs. Ongoing work
with customers, including those in the late-stage pipeline, means we remain
confident in our full year expectations, despite currency headwinds and wider
macro uncertainty. We continue to be well positioned for further progress and
remain focused on delivering value in 2025 and beyond.
Andrew Denton, Chief Executive Officer
"We are delighted to have met our bold expectations for the first half of
2025. We have delivered strong growth and made strategic progress across the
business. Alfa Systems 6 has been the frictionless upgrade for our customers
that we planned and we now have nine of them live on this version. Continued
investment in our software and our people is expanding our competitive
advantage as well as our Serviceable and Target Addressable Markets,
particularly in US Auto Originations, Commercial Finance and Fleet.
Our consistent track record of growth and delivery over the last five years
shows that we have the right strategy and we remain confident in the outlook
for the business."
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
Barclays +44 (0)20 7623 2323
Robert Mayhew
Anusuya Gupta
Investec +44 (0)20 7597 4000
Patrick Robb
Virginia Bull
PanmureLiberum Ltd +44 (0)20 3100 2000
Rupert Dearden
James Sinclair-Ford
Teneo +44 (0)20 7353 4200
James Macey White
Victoria Boxall
Investor and analyst webcast
The Company will host a conference call today at 09:45am. To obtain details
for the conference call, please email alfa@teneo.com (mailto:alfa@teneo.com)
. Please dial in at least 10 minutes prior to the start time.
An archived webcast of the call will be available on the Investors page of the
Company's website https://www.alfasystems.com/en-eu/investors
(https://www.alfasystems.com/en-eu/investors)
Notes to editors
Alfa has been delivering leading-edge technology to the global asset finance
and leasing industry since 1990. Our specialised expertise enables us to
deliver the most challenging systems transformation projects successfully.
Alfa Systems (https://www.alfasystems.com/product) , our class-leading SaaS
platform, is at the heart of the world's largest and most progressive asset
finance operations. Supporting all types of automotive, equipment and
wholesale finance, Alfa Systems is proven at volume, across borders and
trusted by leading brands to manage complex portfolios, drive efficiency and
sustainability and enhance the customer experience.
With full functionality for originations, servicing and collections, Alfa
Systems is live in 37 countries, representing an integrated point solution, a
rapid off-the-shelf implementation, or an end-to-end platform for the complex
global enterprise. Alfa Systems 6, a breakthrough iteration of our software
platform, was launched in 2024.
Alfa maintains exceptional customer satisfaction through an impeccable track
record, with our experience and performance unrivalled in the industry. Our
customers stick with us for the long term because we deliver value that lasts
for decades.
Alfa has offices all over Europe, Australasia and the Americas. For more
information, visit us at alfasystems.com (http://alfasystems.com/) or
on LinkedIn (https://www.linkedin.com/company/alfasystems) .
Forward-looking statements
This Half Year Report (HYR) has been prepared solely to provide additional
information to shareholders to assess the Group's strategies and the potential
for those strategies to succeed. The HYR should not be relied on by any
other party or for any other purpose. This report contains certain
forward-looking statements. All statements other than statements of
historical fact are forward-looking statements. These include statements
regarding Alfa's intentions, beliefs or current expectations, and those of our
officers, directors and employees, concerning (without limitation), with
respect to the financial condition, results of operations, liquidity,
prospects, growth, strategies and businesses of Alfa. These statements and
forecasts involve known and unknown risks, uncertainty and assumptions because
they relate to events and depend upon circumstances that will or may occur in
the future and should therefore be treated with caution. There are a number
of factors that could cause actual results or developments to differ
materially from those expressed or implied by these forward-looking
statements. These forward-looking statements are made only as at the date of
this announcement. Nothing in this announcement should be construed as a
profit forecast. Except as required by applicable law, Alfa disclaims any
obligation or undertaking to update the forward-looking statements or to
correct any inaccuracies therein, or to keep current any other information
contained in the HYR. Accordingly, reliance should not be placed on any
forward-looking statements.
BUSINESS REVIEW
Strong strategic progress
In the first half of 2025 we have continued to make significant strategic
progress, at the same time as delivering strong results.
· Subscription growth - our strong sequential growth in
subscription revenues has continued
· Product development - continued progress particularly in the
areas of US Auto Originations, Commercial Finance and Fleet, increasing the
Serviceable and Target Addressable Markets
· Delivering Alfa Systems 6 - we have shown the frictionless
upgrade nature of AS6 for our customers, with 9 of them now live
· Incremental sales - on the back of the strong positive customer
reaction to Alfa Systems 6 we have sold incremental modules to a number of
existing customers
Strong profitable growth
Financial performance in the first half was as expected, with revenue up 22%
on a constant currency basis or up 20% at actual exchange rates to £62.5m (H1
2024: £52.3m). Subscription revenues continued to grow strongly up 17%.
Delivery revenues were up 10% on H1 2024, as new projects ramped up during
implementation phases. Software Engineering revenue in H1 2025 was strongly up
72% on H1 2024 as we focused our Software Engineering teams on chargeable
development work for new customers.
Annual Recurring Revenue (ARR) of £41.6m (H1 2024: £35.8m) was up 16%. Net
Revenue Retention percentage (NRR) was high at 112% (H1 2024: 106%),
benefiting from the increase in subscription revenues from new customers where
revenue ramps up over time, along with growth from existing customers. It
also demonstrates the stickiness of our customer base.
Operating profit was up 33% to £21.6m (H1 2024 £16.2m) with the improvement
in the margin a result of the strong increase in Software Engineering revenues
driven by higher chargeability, with headcount and costs growth lower than
revenue growth. Cash conversion in the period was 88% (H1 2024: 95%) in line
with our guidance of 80% - 90% for 2025. Long term guidance is for average
cash conversion to be between 90% - 100%. We finished the period with net cash
of £23.9m (31 Dec 2024: £20.5m).
Pipeline conversions driving very strong TCV growth
We saw a significant growth in our TCV in 2024 on the back of eight customer
wins to finish the year at a record level of £221m. This increased further in
Q1 to £227m, and as expected we worked through some of this in Q2 to finish
with TCV of £211m at 30 June 2025 up 9% versus this time last year, or 13% at
constant currency. Whilst Delivery and Software Engineering TCV can be
dependent on the timing of contract wins and implementation projects,
Subscription TCV continues to grow.
We had 23 customers each contributing revenues of more than £1m in the period
(£2m on an annualised basis), an increase from last year (H1 2024: 19) and up
from 7 in 2019. We have significantly reduced our customer concentration, with
our top 5 customers representing 35% of our revenues in H1 2025, compared with
61% in 2019. At 30 June 2025, calculated on the last 12 months, our largest
customer represented 8% of our revenues, although we expect this to move up
and down slightly depending on the scale of individual implementations.
The stickiness of our customers on our modern software is demonstrated by NRR
of 112% (H1 2024: 106%) and the fact that since we went live in 2010 with
version 5 of our software we have only lost two customers after go-live, one
who was bought by another Alfa customer and the other who exited the asset
finance software market.
Headcount growth, supported by strong retention
Following the record number of wins in 2024 we accelerated recruitment plans
in the second half of 2024. In the first half of 2025 we have continued to
focus our recruitment plans on experienced hires to support the delivery of
these projects in addition to our regular plans for graduate intakes.
In H1 2025 the retention rate increased slightly to a very high level of 97%.
Our engagement scores remained high at 78% (H1 2024: 81%). Headcount as at 30
June 2025 was up 6% at 512 (30 June 2024: 484) with average headcount in the
period of 508 (H1 2024: 474) up 7% on last year. We continue to recruit
carefully to ensure we maintain the quality of our delivery and software
development.
Investment in software
We continue to invest to maintain and grow our lead in the market. We invested
£19.4m into the further development of our software in H1 (H1 2024: £18.8m).
In H1 our investment was focused on US Auto Originations, Fleet and Commercial
Finance. These will increase both the proportion of our market that we can
access as well as the size of our total addressable market. We made good
progress and benefited from working closely with customers in all three areas,
which is our preferred way of making investments, as it ensures that we create
software that is a great fit for the market as a whole.
Fleet and US Auto Originations functionality allows us immediately to access
an additional part of our existing target addressable market in asset finance,
increasing the Serviceable Addressable Market (SAM).
The Commercial Finance market is something we've been working on for a while
and investment in this area will continue into next year and beyond. Our
initial focus is to work with customers in the asset finance market who have
commercial finance offerings. In the longer term, this will open up a brand
new addressable market of stand-alone commercial finance customers, increasing
our Target Addressable Market (TAM).
We have developed Alfa Start for UK equipment finance and we are now seeking
the right project to pilot our Partner-led Delivery (PLD) plans. We have also
further progressed our US Auto Start product which will in conjunction with
PLD give us access to the Tier 3 US Automotive market.
Strong delivery execution
We delivered 11 upgrades in the first half and as a result we now have nine
customers on Alfa Systems 6, showing the frictionless nature of the upgrade to
our customers. We are increasing our headcount and also expect to increase our
use of partners in the second half to help satisfy the demand for delivery
resources.
We continue to build our Cloud hosting operations on the back of the strong
growth in this area of the business. We are looking to recruit additional
people into this team to be based in Gdansk. Following the success of the
Lisbon Smart Hub we are expanding our recruitment reach by setting up an
operation in Gdansk that will include not only additional people into our
hosting operations but also more software engineers.
Capital return
We remain a strongly cash-generative business, with cash conversion of 88% in
H1 2025 in line with our guidance of 80% - 90% for 2025. Beyond this year we
expect cash conversion to average between 90% to 100% in any year. We are
committed to continuing to invest in our software and people to ensure that we
continue to offer market leading solutions and excellent delivery and service
to our customers. We continue to generate more cash than we need for our
growth plans and will continue to return excess cash to shareholders.
Our main mechanism for returning capital is the payment of a regular, ordinary
dividend and we have a policy to grow this progressively. To ensure that we
retain the flexibility to invest in the business as required, our ordinary
dividends are set at a sustainable level and we have historically made one-off
returns of additional excess capital through the payment of special dividends.
Notwithstanding the payment of £11.2m of dividends during the first half we
ended the period with net cash of £23.9m. As such, the Board has today
declared a special dividend of 5.0 pence per share with an ex-dividend date of
25 September 2025, a record date of 26 September 2025 and a payment date of 7
November 2025. The special dividend would amount to a total payment of
c.£14.8m and represents the tenth special dividend we have paid in the last 5
years.
Steady market conditions
We have seen over the last few years that despite a difficult and at times
volatile macro economic environment the asset finance market and demand for
software within it has remained robust.
With regards to winning future customers, we benefit by not being dependent on
any one particular market. Alfa Systems is operational in 37 countries; in
automotive finance, equipment finance and wholesale and loan finance; for
OEMs, banks and independents and across all asset classes. This breadth and
diversity has helped insulate us from any underlying economic uncertainty in
any individual market.
The market itself is relatively robust and our software once installed with
customers is even more resilient to changes as it is mission critical for our
customers' businesses and is in effect heart and lungs software and so cannot
be easily replaced.
Strong pipeline
Following a record number of wins in 2024 our late-stage pipeline remains
strong with seven prospects. We are the preferred supplier with six of these
and have started working under letters of engagement with all six. One
customer prospect has deferred their project and moved out of the late-stage
pipeline as a result of their current supplier extending support for their
legacy system. One customer moved back to the mid-stage pipeline as they are
unlikely to make a commitment in the next 12 months. This has been balanced by
a new addition into the pipeline for a Global OEM looking for a multi-country
cross continent implementation.
H1 2025 continued the trend of macro uncertainty but our pipeline remains
strong and we continued to see little impact on our pipeline from macro events
with new prospects coming into the early-stage pipeline, showing that the
buying dynamics of the market remain unchanged.
We remain confident in both the demand for our best in class software and our
ability to win work in the market.
ESG
We remain committed to our ESG activities and this was recognised by winning
the Corporate Social Award at the Asset Finance Connect Summer Awards and our
inclusion in the FTSE4Good Index. Activities in the first half of the year
included providing work experience for a social mobility charity, social talks
and events and fund-raising activities which were driven by the energy and
enthusiasm of our Alfa Communities.
Outlook
The exceptionally strong conversion of wins in 2024 resulted in a step up to a
record level of TCV at the prior year end creating an excellent foundation for
continued long term growth. We are working under letters of engagement with a
number of customers in the late-stage pipeline and expect to continue this
work in the second half ahead of signing full contract packs. The very
strong performance in the first half of the year was driven by an expected
large increase in software engineering revenues. In the second half of the
year, we expect a lower level of software engineering revenues and an impact
from planned increases in headcount investment and salary costs. Ongoing work
with customers, including those in the late-stage pipeline, means we remain
confident in our full year expectations, despite currency headwinds and wider
macro uncertainty. We continue to be well positioned for further progress and
remain focused on delivering value in 2025 and beyond.
FINANCIAL REVIEW
Financial results
H1 2025 H1 2024 Movement
£m Unaudited Unaudited %
Revenue 62.5 52.3 20%
Gross profit 40.1 32.9 22%
Operating profit 21.6 16.2 33%
Profit before tax 21.5 16.1 34%
Taxation (5.6) (4.2) 33%
Profit for the period 15.9 11.9 34%
Revenues increased by 20% or £10.2m to £62.5m in the six months ended 30
June 2025 (H1 2024: £52.3m). On a constant currency basis, revenues were up
22% on last year. Revenues grew particularly strongly in the Americas, up 31%,
which accounted for 44% of overall revenues (H1 2024: 40%).
Gross profit increased to £40.1m (H1 2024: £32.9m) up £7.2m, with gross
margin improving to 64.2% (H1 2024: 62.9%) due to revenue growing faster than
headcount principally due to planned better chargeability of our software
engineering resources. Operating profit increased by £5.4m to £21.6m (H1
2024: £16.2m) with profit before tax of £21.5m (H1 2024: £16.1m).
The Effective Tax Rate ("ETR") for the 2025 half year is 26.0% (H1 2024:
26.1%) in line with last year, with no significant changes since last year.
For the full year 2025 we expect the ETR to be around 26.0% (2024 full year
ETR: 24.9%). Profit for the period was £15.9m (H1 2024: £11.9m).
Revenue
Revenue - by type H1 2025 H1 2024 Movement
£m Unaudited Unaudited %
Subscription 21.2 18.1 17%
Software Engineering 10.3 6.0 72%
Delivery 31.0 28.2 10%
Total revenue 62.5 52.3 20%
Subscription - Continuing strong growth in subscription revenues
Subscription revenues arise from revenues from SaaS and other recurring
services
Overall subscription revenues increased strongly by 17% to £21.2m (H1 2024:
£18.1m) with growth driven from both new and existing customers. Subscription
customers now total 41 (H1 2024: 36), of which 23 are on Alfa Cloud, 16 are on
their own private cloud and two are on v4 of Alfa. Of the 23 customers on Alfa
Cloud, seven are not yet live as they are currently in implementation of which
two are in the late-stage pipeline.
We have a single-tenant SaaS solution. We and our customers benefit from a
single standard code-set and database, but with multi-layer data segregation
as opposed to code-based segregation used in multi-tenant SaaS models. One of
the big benefits of this approach is that customers can control their release
cycles rather than having a timetable dictated to them. We mitigate the extra
cost from this approach by encouraging customers to share branches and release
dates.
Our SaaS services are ISO 27001 and ISO 27018 certified and SOC1 and SOC2
audited to confirm compliance with controls around data security and
availability. Given the mission-critical nature of our systems to our
customers, having such third-party verification of our compliance with these
standards is a key selling point.
Software Engineering - Swing to chargeable development work in H1
Software Engineering revenues largely arise from chargeable development work
for new and existing customers, along with a small amount of perpetual licence
recognition.
As expected, Software Engineering revenue for the period increased
significantly against the relatively low level of H1 2024, up to £10.3m (H1
2024: £6.0m). In H1 2024 we focused our work on the launch of Alfa Systems
6 and performed fewer chargeable development days. In H1 2025 the biggest
growth came from chargeable development revenue from new customers up £3.3m
to £4.5m (H1 2024: £1.1m). There was also good growth in chargeable software
development for existing customers up 41% to £4.5m (H1 2024: £3.2m).
Following the transition to SaaS only sales, perpetual customised licence
recognition is now a small part of our business, with revenue of £1.1m in the
period (H1 2024: £1.1m). There were one-off licence revenues of £0.2m (H1
2024: £0.5m). We expect in H2 2025 chargeable software development revenues
to be at a more normal level compared with the very strong last two six month
periods.
Our strategy is to continue to develop our software, to ensure that we meet
and exceed customer and market needs as they evolve and as the regulatory and
commercial environment continues to change. We have the industry leading
software and we continue to invest to increase that competitive advantage,
through a balance of customer funded development and self-funded development.
Delivery - Continuing delivery execution
Delivery revenues arise from work for existing customers delivering new
modules, upgrades, migrations and other services, as well as work with new
customers on project definition and implementation of Alfa Systems.
We entered the year with a record level of TCV, and with the new
implementation projects getting underway we saw good growth in Delivery
revenues, versus both the first and second half last year. As customers
progress from paid pipeline work through definition and into implementation
delivery revenues increase. Of the 11 new customers, more were in
implementation in 2025 compared with the 11 new customers in H1 last year and
this drove increased delivery revenues, up 10% to £31.0m (H1 2024: £28.2m)
at actual exchange rates.
We delivered 11 customer upgrades, including those going onto AS6, in the
first six months of the year and two more since then. More frequent customer
upgrades is a key part of our simplification agenda and ensuring quality
delivery. We already have 9 customers on Alfa Systems 6 which shows the
progress we are making in this area.
We continue to look for opportunities to use partners to assist in delivering
projects. The next stage in our progress towards partner-led delivery (PLD) is
to deliver a PLD project for a UK Equipment Start customer. We are actively
looking for the right project for this important step. During H1 we worked
on our US Auto Start product using the knowledge gained from existing US auto
projects, with an aim of targeting the Tier 3 US Auto Finance market with PLD.
Total Contract Value (TCV)
TCV - by type (unaudited) 2025 2024 2024
£m HY FY HY
Subscription 145 137 129
Software Engineering 19 24 17
Delivery 47 60 47
Total TCV 211 221 193
Definition of TCV is included in the definitions section of this Half Year
Report
Total contract value (TCV) at 30 June 2025 was £211m (31 December 2024:
£221m, 30 June 2024: £193m). The record level of TCV at 31 December 2024,
was driven by significant growth in Delivery and Software Engineering TCV as a
result of the record pipeline conversion which provided new customer
implementation projects and a number of multi-year statements of work. We
expected this to reduce in 2025 as we progressed these projects delivering
both delivery and software engineering revenues, which we have seen in the
first half. Subscription TCV continued to increase as we win new customers and
grow the subscription base.
Of the TCV at 30 June 2025, £90m (H1 2024: £72m) is currently anticipated to
convert into revenue within the next 12 months. With the start of a number
of new implementations the Delivery portion was up strongly at £34m (H1 2024:
£22m) and we also had increases in Software Engineering revenues up 30% to
£13m (H1 2024: £10m). Subscription portion also increased, up £3m to £43m
(H1 2024: £40m).
Operating profit
The Group's operating profit increased by £5.4m to £21.6m in H1 2025 (H1
2024: £16.2m) due to the strong revenue growth and improved margins.
Headcount was up 6% at 30 June 2025 at 512 (H1 2024: 484), with average
headcount of 508 up 7% on last year (H1 2024: 474). Staff retention remained
high at 97% on a 12 month basis (30 June 2024: 96%).
Expenses - net H1 2025 H1 2024 Movement
£m Unaudited Unaudited %
Cost of sales 22.4 19.4 15%
Sales, general and administrative expenses 18.8 17.0 11%
Other income (0.3) (0.3) 0%
Total expenses - net 40.9 36.1 13%
Cost of sales increased more slowly than growth in revenue and was up by
£3.0m to £22.4m (H1 2024: £19.4m). The 15% increase was due to higher
headcount and salary costs along with increased hosting costs from the
increasing scale of that business. These costs are net of capitalised
intangible costs for internally generated software of £2.5m (H1 2024:
£2.7m).
Sales, general and administrative expenses (SG&A) increased to £18.8m in
the six-month period to 30 June 2025 (H1 2024: £17.0m). Salary costs were
up 10% in the period to £7.5m (2024 H1: £6.8m). Profit Share Pay, including
employer's costs, in the period was £2.6m (2024 H1: £1.8m). Share-based
payment charges have increased over last year by £0.4m to £0.9m (H1 2024:
£0.5m), principally due to reassessment of performance outturn. Depreciation
and amortisation increased to £1.5m (H1 2024: 1.2m) as a result of the
increased capitalised development costs over the last 18 months. Realised and
unrealised gains from FX hedges taken out to hedge USD flows were £1.7m (H1
2024: £0.0m). Other transaction FX losses were £0.6m (H1 2024: £0.0m).
Other costs totalling £7.4m increased £0.7m, or 10%, on last year (H1 2024:
£6.7m). Other income of £0.3m was in line with last year (H1 2024: £0.3m).
Profit before Tax
Overall Profit before Tax of £21.5m was up 34% on last year (H1 2024:
£16.1m). Net finance costs were £0.1m (H1 2024: £0.1m).
Profit for the period
Profit after taxation increased by £4.0m, or 34%, to £15.9m (H1 2024:
£11.9m). The Effective Tax Rate ("ETR") for the 2025 half year is 26.0% (H1
2024: 26.1%). For the full year 2025 we expect the ETR to be around 26.0%
(2024 full year ETR: 24.9%). The increase in the ETR is principally due to
increased activities outside the UK taxed at higher rates.
Earnings per share
Basic earnings per share increased by 33% to 5.38 pence (H1 2024: 4.05 pence).
Diluted earnings per share increased by 34% to 5.35 pence (H1 2024: 4.00
pence).
Cash flow
Cash generated from operations increased to £22.0m (H1 2024: £18.8m) largely
as a result of the strong growth in the business. Net cash generated from
operating activities was £17.6m (H1 2024: £13.9m) with a slight reduction in
tax payments to £4.0m (H1 2024: £4.6m).
Net cash (including the effect of exchange rate changes) increased by £3.4m
to £23.9m at 30 June 2025, from £20.5m at 31 December 2024. We paid
£11.2m of dividends in the period in respect of the FY 2024 Final Dividend
and a 2025 Special Dividend (H1 2024: £9.7m). Purchases of own shares in the
period were £0.9m (H1 2024: £0.8m). Net capital expenditure of £2.8m was
in line with last year (H1 2024: £2.8m) with capitalisation of software down
slightly to £2.5m (H1 2024: £2.7m) and with other capex of £0.3m (H1 2024:
£0.1m).
The Group's Operating Free Cash Flow Conversion (FCF) was 88% (H1 2024: 95%)
in line with 2025 guidance of 80% - 90%.
Balance sheet
The significant movements in the Group's balance sheet, aside from the cash
balance which is described above, from 31 December 2024 to 30 June 2025 are
detailed below.
Trade receivables of £8.7m were broadly in line with last year end (31
December 2024: £8.6m) although accrued income increased to £7.7m on very
strong June revenues as compared to last year end (31 December 2024: £4.7m).
Corporation tax recoverable of £1.8m (31 December 2024: £2.8m) reduced
following a successful R&D claim.
Trade and other payables balance decreased by £0.8m to £10.9m at 30 June
2025 (31 December 2024: £11.7m) due to lower payroll related accruals.
Contract liabilities relating to software licences decreased by £0.1m to
£8.0m at 30 June 2025 (31 December 2024: £8.1m). Contract liabilities from
deferred maintenance increased to £10.4m (31 December 2023: £7.6m)
reflecting the timing of billing of a number of annual maintenance contracts
on 1 May.
Subsequent events
There have been no subsequent events.
PRINCIPAL RISKS AND UNCERTAINTIES
Principal risks and uncertainties which could have a material impact on the
long-term performance of Alfa Financial Software Holdings PLC and its
subsidiaries were set out in the Alfa Financial Software Holdings PLC Annual
Report for the year ended 31 December 2024, dated 12 March 2025, and remain
valid at the date of this report.
Those risks and uncertainties at the date of this report where the impact
continues to be assessed as "Major" and where the probability of the event is
assessed as at least "Possible" were:
· Socio-economic and geo-political risk: the risk of global and
local economic downturn, having the potential to reduce our customers' and
prospects' spending on our services, potentially impacted by recent events
including the ongoing Ukraine war, conflict in the Middle East and the
knock-on economic impacts of global trade wars.
· Risk to people, teams and skills: talent recruitment, training
and retention may not keep pace with our forecasts, preventing us fulfilling
obligations to customers or taking on new business.
· IT security and cyber risks: a targeted attack could adversely
affect our customers' or potential customers' perception of Alfa Systems and
could impact our ability to operate our business.
· Competition risk: competitors may gain market share in target
markets, impacting our growth potential.
Since the Annual Report, the following risk has been added to the principal
risks, with the impact assessed as "Major" and the probability assessed as
"Possible":
· Exposure to potential new taxes imposed by the US on software or
services being supplied from outside the US.
UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2025
£m Note H1 2025 H1 2024
Unaudited Unaudited
Continuing Operations
Revenue 3 62.5 52.3
Cost of sales (22.4) (19.4)
Gross profit 40.1 32.9
Sales, general and administrative expenses (18.8) (17.0)
Other income 0.3 0.3
Operating profit 4 21.6 16.2
Finance income 0.3 0.2
Finance costs (0.4) (0.3)
Profit before taxation 21.5 16.1
Taxation 6 (5.6) (4.2)
Profit for the period 15.9 11.9
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (0.3) -
Other comprehensive (loss) / income net of tax (0.3) -
Total comprehensive income for the period 15.6 11.9
Earnings per share (in pence)
Basic 5.38 4.05
Diluted 5.35 4.00
The consolidated statement of profit or loss and comprehensive income should
be read in conjunction with the accompanying notes.
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2025
£m Note 30 June 31 Dec 2024
2025
Audited
Unaudited
Assets
Non-current assets
Goodwill 7 24.7 24.7
Other intangible assets 8 11.1 9.3
Property, plant and equipment 9 0.7 0.7
Right-of-use assets 10 7.2 7.7
Deferred tax assets 0.4 0.5
Total non-current assets 44.1 42.9
Current assets
Trade receivables 11 8.7 8.6
Accrued income 12 7.7 4.7
Prepayments 12 4.2 4.9
Other receivables 12 0.2 0.3
Derivative financial instruments 12 1.1 -
Corporation tax recoverable 12 1.8 2.8
Cash and cash equivalents 23.9 20.5
Total current assets 47.6 41.8
Total assets 91.7 84.7
Liabilities and equity
Current liabilities
Trade and other payables 13 10.9 11.7
Lease liabilities 14 0.5 0.1
Contract liabilities 13 18.4 15.7
Total current liabilities 29.8 27.5
Non-current liabilities
Lease liabilities 14 9.0 9.2
Provisions for other liabilities 13 0.7 0.8
Deferred tax liabilities 13 1.1 1.0
Total non-current liabilities 10.8 11.0
Total liabilities 40.6 38.5
Capital and reserves
Share capital 0.3 0.3
Translation reserve (0.2) 0.1
Own shares 15 (6.6) (7.9)
Retained earnings 57.6 53.7
Total equity 51.1 46.2
Total liabilities and equity 91.7 84.7
The consolidated statement of financial position should be read in conjunction
with the accompanying notes.
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2025
£m Note Share Own shares Translation reserve Retained Equity
capital
earnings
attributable to owners of the parent
Balance as at 1 January 2024 0.3 (8.7) 0.2 50.2 42.0
Profit for the financial period - - - 11.9 11.9
Other comprehensive income - - - - -
Total comprehensive income for the period - - - 11.9 11.9
Equity-settled share-based payment schemes - - - 0.2 0.2
Equity-settled share-based payment schemes - deferred tax impact - - - 0.1 0.1
Dividends - - - (9.7) (9.7)
Own shares distributed 15 - 1.6 - (1.5) 0.1
Own shares acquired 15 - (0.8) - - (0.8)
Balance as at 30 June 2024 0.3 (7.9) 0.2 51.2 43.8
Balance as at 1 January 2025 0.3 (7.9) 0.1 53.7 46.2
Profit for the financial period - - - 15.9 15.9
Other comprehensive (loss) - - (0.3) - (0.3)
Total comprehensive income for the period - - (0.3) 15.9 15.6
Equity-settled share-based payment schemes - - - 0.6 0.6
Equity-settled share-based payment schemes - deferred tax impact - - - 0.1 0.1
Dividends - - - (11.2) (11.2)
Own shares distributed 15 - 2.2 - (1.5) 0.7
Own shares acquired 15 - (0.9) - - (0.9)
Balance as at 30 June 2025 0.3 (6.6) (0.2) 57.6 51.1
The consolidated statement of changes in equity should be read in conjunction
with the accompanying notes.
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2025
£m Note H1 2025 H1 2024
Unaudited Unaudited
Cash flows from operating activities
Profit before tax 21.5 16.1
Net finance costs 0.1 0.1
Operating profit 21.6 16.2
Adjustments:
Depreciation 9/10 0.8 0.8
Amortisation 8 0.7 0.4
Share-based payment charge 0.6 0.2
Research and Development Expenditure (Credit) (0.3) (0.3)
Unrealised fair value (gain) on derivatives (1.2) -
(Decrease) in provisions (0.1) (0.1)
Movement in working capital:
Increase in contract liabilities 2.7 4.4
(Increase) in trade and other receivables (2.2) (2.3)
(Decrease) in trade and other payables (0.6) (0.5)
(excluding contract liabilities)
Cash generated from operations 22.0 18.8
Interest element on lease payments (0.4) (0.3)
Income taxes paid (4.0) (4.6)
Net cash generated from operating activities 17.6 13.9
Cash flows from investing activities
Payments for purchases of property, plant and equipment 9 (0.3) (0.1)
Payments for internally developed software 8 (2.5) (2.7)
Payments in relation to direct costs associated with lease extensions - (0.2)
Interest received 0.3 0.2
Net cash outflow from investing activities (2.5) (2.8)
Cash flows from financing activities
Dividends paid to Company shareholders 18 (11.2) (9.7)
Payment of lease liabilities (principal) 14 (0.2) (0.6)
Purchase of own shares 15 (0.9) (0.8)
Sale of own shares 0.5 -
Net cash used in financing activities (11.8) (11.1)
Net increase in cash and cash equivalents 3.3 -
Cash and cash equivalents at the beginning of the period 20.5 21.8
Effect of foreign exchange rate changes on cash 0.1 0.2
and cash equivalents
Cash and cash equivalents at the end of the period 23.9 22.0
The consolidated cash flow statement should be read in conjunction with the
accompanying notes.
Notes to the Condensed Consolidated Half Year Financial Statements for the six
months ended 30 June 2025
1. General information
Alfa Financial Software Holdings PLC ("Alfa" or the "Company") is a public
company limited by shares and is incorporated and domiciled in England. Its
registered office is at Moor Place, 1 Fore Street Avenue, London, EC2Y 9DT,
United Kingdom. Alfa's company registration number is 10713517.
The principal activity of the Group is to develop, implement and support
software and SaaS solutions to the auto and equipment finance industry in the
United Kingdom, Europe, Africa, North America, and Australasia.
These unaudited Half Year Financial Statements have been approved for issue by
the Board of Directors on 3 September 2025. These Half Year Financial
Statements have been reviewed but not audited.
2. Accounting policies
2(a) Basis of preparation
The Half Year Financial Statements have been prepared in accordance with IAS
34 "Half Year Financial Reporting" as contained in UK-adopted International
Accounting Standards and the Disclosure and Transparency Rules of the
Financial Conduct Authority.
These Half Year Financial Statements do not comprise statutory accounts within
the meaning of section 434 of the Companies Act 2006. Accordingly, this report
should be read in conjunction with the annual report for the year ended 31
December 2024 (the "Annual Financial Statements") which was prepared in
accordance with UK-adopted International Accounting Standards and any public
announcements made by Alfa during the Half Year reporting period. The Annual
Financial Statements constitute statutory accounts as defined in section 434
of the Companies Act 2006 and a copy these statutory accounts has been
delivered to the Registrar of Companies. The auditor's report on the Annual
Financial Statements was not qualified, did not include a reference to any
matters to which the auditors drew attention by way of emphasis without
qualifying the report and did not contain statements under section 498(2) or
(3) of the Companies Act 2006.
The accounting policies adopted in the preparation of the Half Year Financial
Statements are consistent with those used to prepare Alfa's consolidated
financial statements for the year ended 31 December 2024 and the corresponding
Half Year reporting period.
The preparation of the Half Year Financial Statements requires management to
make judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates. In preparing
these Half Year Financial Statements, the significant judgements made by
management in applying the Group's accounting policies were the same as those
that applied to the consolidated Annual Financial Statements described above.
With respect to the key sources of estimation uncertainty disclosed in the
consolidated Annual Financial Statements, it is noted that over the last few
years we have increasingly moved to selling subscription licences in place of
perpetual licences, and this has resulted in a decrease in the significance of
the customised licence estimates and related judgements.
The Half Year Financial Statements have been prepared on a going concern
basis, under the historical cost convention.
2(b) Going concern
The Half Year Financial Statements are prepared on the going concern basis.
The Group continues to be cash-generative and the Directors believe that the
Group has a resilient business model. The Group meets its day-to-day working
capital requirements through its cash reserves generated from operating
activities. The Group's forecasts and projections, taking account reasonably
possible changes in trading performance, show that the Group has sufficient
cash reserves to operate for a period of not less than 12 months from the date
of approval of these Half Year Financial Statements.
The going concern assessment performed also includes downside stress testing
in line with FRC guidance which demonstrates that even in the most extreme
downside conditions considered reasonably possible, given the existing level
of cash held, the Group would continue to be able to meet its obligations as
they fall due.
On this basis, the Directors consider it appropriate to continue to adopt the
going concern basis of accounting in preparing the Half Year Financial
Statements.
2(c) Changes in accounting policies
The Group has not adopted any new accounting standards in the period. Other
changes to accounting standards in the period had no material impact.
2(d) Seasonality
The Group is not normally significantly influenced by seasonality or cyclical
fluctuation because the Group's revenues are relatively consistent throughout
the year. The Group's revenue is influenced by the number and maturity of
software implementations during the period. Separately, the Group's cash
flows are subject to seasonal fluctuations because the Group invoices a
proportion of its customers for maintenance annually in advance in the first
six months of each year, resulting in a higher inflow of cash receipts in the
first half of the Group's financial year in respect of maintenance revenues.
2(e) Foreign currency
The following exchange rates were used in the financial statements:
USD EUR AUD NZD
Average rate 6 months to:
30 June 2025 1.30 1.19 2.05 2.25
30 June 2024 1.27 1.17 1.92 2.08
Closing rate:
30 June 2025 1.37 1.17 2.09 2.26
31 Dec 2024 1.25 1.21 2.02 2.24
3. Segment information and revenue from contracts with customers
3(a) Revenue by stream
The Group assesses revenue by type of activity, being Subscription, Software
Engineering and Delivery, as summarised below:
£m H1 2025 H1 2024
Unaudited Unaudited
Subscription 21.2 18.1
Software Engineering* 10.3 6.0
Delivery* 31.0 28.2
Total revenue 62.5 52.3
* The names of two revenue streams were changed in H2 2024 - 'Software' is now
'Software Engineering' and 'Services' is now 'Delivery'. This was purely a
renaming of the revenue streams which did not impact the revenue allocation
between the streams, nor the total revenue or profit disclosed for H1 2024.
3(b) Revenue by geography
Revenue attributable to each geographical market based on where the customer
mainly utilises its instance of Alfa, or where the service is rendered, is as
follows:
£m H1 2025 H1 2024
Unaudited Unaudited
EMEA* 31.2 28.7
Americas* 27.2 20.7
Rest of the World 4.1 2.9
Total revenue 62.5 52.3
Revenue attributable to the UK is £16.9m (H1 2024: £17.6m) and this is
included within the EMEA revenue.
* The breakdown of revenue by geography has been changed to better reflect the
operations of the Group. The change from 'US' to 'Americas' reflects new
revenue from within the Americas but outside of the US.
3(c) Revenue by currency
Revenue by contractual currency is as follows:
H1 2025 H1 2024
£m Unaudited Unaudited
GBP 23.1 21.3
USD 27.1 21.0
EUR 8.3 7.1
Other 4.0 2.9
Total revenue 62.5 52.3
3(d) Liabilities from contracts with customers
H1 2025 H1 2024
£m Unaudited Unaudited
Contract liabilities - deferred licence and fees 8.0 7.8
Contract liabilities - deferred maintenance 10.4 10.8
Total contract liabilities 18.4 18.6
3(e) Timing of revenue
Timing of revenue - the Group derives revenue from the transfer of goods and
services as follows over time and at a point in time in the following revenue
streams:
H1 2025 - £m Subscription Software Engineering Delivery Total revenue
At a point in time - time and materials - 4.6 19.7 24.3
At a point in time - fixed price 0.1 0.3 - 0.4
Over time - time and materials - 4.8 11.1 15.9
Over time - fixed price 21.1 0.6 0.2 21.9
Total revenue 21.2 10.3 31.0 62.5
H1 2024 - £m Subscription Software Engineering Delivery Total revenue
At a point in time - time and materials - 3.2 23.6 26.8
At a point in time - fixed price - 0.5 - 0.5
Over time - time and materials - 1.4 4.6 6.0
Over time - fixed price 18.1 0.9 - 19.0
Total revenue 18.1 6.0 28.2 52.3
4. Operating profit
The following items have been included in arriving at operating profit in the
table below:
£m
H1 2025 H1 2024
£m Unaudited Unaudited
Research and development costs 1.5 1.5
Depreciation of property, plant and equipment 0.3 0.3
Depreciation of right-of-use lease assets 0.5 0.5
Amortisation of intangible assets 0.7 0.4
Foreign exchange loss 0.6 -
Realised and unrealised net (gain) on forward contracts (1.7) -
Share-based payments (including social security contributions 0.9 0.5
5. Employee costs
H1 2025 H1 2024
£m Unaudited Unaudited
Wages and salaries 25.1 22.0
Social security contributions (on wages and salaries) 2.6 2.6
Pension costs 2.0 1.7
Less: capitalisation (2.5) (2.7)
27.2 23.6
Profit share pay* 2.6 1.8
Share-based payments (including social security contributions) 0.9 0.5
Total employment costs 30.7 25.9
* Profit share pay refers to a pool of money (that equates to approximately
10% of the Group's pre-tax profits before charging profit share) which is
shared amongst the employees, excluding Directors and some other senior
managers, as a percentage of basic salary. The amount disclosed includes the
related social security contributions.
Average monthly number of people employed (including Directors) H1 2025 H1 2024
Unaudited Unaudited
EMEA* 366 353
Americas* 112 92
Rest of the World 30 29
Total average monthly number of people employed 508 474
* The split of employees has been changed to better reflect the operations
of the Group. The split of employees has been changed to better reflect the
operations of the Group. The UK headcount, as disclosed previously, is
included within the EMEA headcount.
At 30 June 2025 the Group had 512 employees (30 June 2024: 484).
6. Income tax expense
Income tax expense is calculated on management's best estimate of the full
financial year expected rate, which is then adjusted for discrete items
occurring in the reporting period.
The income tax expense for the six-month period ended 30 June 2025 was £5.6m
(H1 2024: £4.2m).
The Effective Tax Rate ("ETR") for the 2025 half year is 26.0% (H1 2024:
26.1%).
For the full year 2025 we expect the ETR to be around 26.0% (2024 full year
ETR: 24.9%), so slightly above the UK statutory tax rate of 25.0% (2024:
25.0%), as a result of increased activities outside the UK subject to higher
rates of tax.
7. Goodwill
H1 2025 FY 2024
Unaudited Audited
£m
Cost
At 1 January 24.7 24.7
At 30 June / 31 December 24.7 24.7
Goodwill arose on the acquisition of subsidiaries in 2012 and represents the
excess of the consideration transferred over the fair value of the
identifiable assets acquired and the liabilities and contingent liabilities
assumed.
We have assessed whether there are any indicators of impairment of goodwill.
Considering in particular the fact that we have experienced strong trading
performance during the six-month period along with the carrying value of the
assets for the Company remaining significantly below the market capitalisation
of the Company, we found no indicators of impairment of goodwill. As a
consequence, no formal goodwill impairment test has been carried out.
8. Other intangible assets
£m Computer software Internally generated software Total
Cost
At 1 January 2024 1.7 7.1 8.8
Additions - 5.3 5.3
Disposals (0.7) - (0.7)
At 31 December 2024 1.0 12.4 13.4
Amortisation
At 1 January 2024 1.1 2.7 3.8
Charge for the period 0.2 0.8 1.0
Disposals (0.7) - (0.7)
At 31 December 2024 0.6 3.5 4.1
Net book value
At 31 December 2024 0.4 8.9 9.3
Cost
At 1 January 2025 1.0 12.4 13.4
Additions - 2.5 2.5
At 30 June 2025 1.0 14.9 15.9
Amortisation
At 1 January 2025 0.6 3.5 4.1
Charge for the period - 0.7 0.7
At 30 June 2025 0.6 4.2 4.8
Net book value
At 30 June 2025 0.4 10.7 11.1
Significant movement in other intangible assets
During H1 2025, Alfa developed new internally generated software at a cost of
£2.5m (H1 2024: £2.7m). This software will be amortised over three to five
years.
9. Property, plant and equipment
£m Fixtures and fittings IT equipment Total
Cost
At 1 January 2024 1.6 3.2 4.8
Additions - 0.3 0.3
Disposals (0.1) (1.7) (1.8)
At 31 December 2024 1.5 1.8 3.3
Depreciation
At 1 January 2024 1.1 2.7 3.8
Charge for the period 0.2 0.4 0.6
Disposals (0.1) (1.7) (1.8)
At 31 December 2024 1.2 1.4 2.6
Net book value
At 31 December 2024 0.3 0.4 0.7
Cost
At 1 January 2025 1.5 1.8 3.3
Additions - 0.3 0.3
Disposals - (0.2) (0.2)
At 30 June 2025 1.5 1.9 3.4
Depreciation
At 1 January 2025 1.2 1.4 2.6
Charge for the period 0.1 0.2 0.3
Disposals - (0.2) (0.2)
At 30 June 2025 1.3 1.4 2.7
Net book value
At 30 June 2025 0.2 0.5 0.7
10. Right-of-use assets
£m Motor vehicles Property Total
Cost
At 1 January 2024 0.7 10.9 11.6
Additions 0.3 2.4 2.7
Disposals (0.3) - (0.3)
At 31 December 2024 0.7 13.3 14.0
Depreciation
At 1 January 2024 0.5 5.0 5.5
Charge for the period 0.1 1.0 1.1
Disposals (0.3) - (0.3)
At 31 December 2024 0.3 6.0 6.3
Net book value
At 31 December 2024 0.4 7.3 7.7
Cost
At 1 January 2025 0.7 13.3 14.0
Disposals - (0.3) (0.3)
At 30 June 2025 0.7 13.0 13.7
Depreciation
At 1 January 2025 0.3 6.0 6.3
Charge for the period 0.1 0.4 0.5
Disposals - (0.3) (0.3)
At 30 June 2025 0.4 6.1 6.5
Net book value
At 30 June 2025 0.3 6.9 7.2
11. Trade receivables
The Group holds the following trade receivables:
H1 2025 FY 2024
£m Unaudited Audited
Trade receivables 8.7 8.6
Provision for impairment - -
Total trade receivables - net 8.7 8.6
Trade receivables ageing
Ageing of net trade receivables £m H1 2025 FY 2024
Unaudited Audited
Within agreed terms 8.2 8.1
Past due 1-30 days 0.5 0.5
Past due 31-90 days - -
Past due 91+ days - -
Trade receivables - net 8.7 8.6
The Group believes that the unimpaired amounts that are past due are fully
recoverable as there are no indicators of future delinquency or potential
litigation.
12. Other receivables
H1 2025 FY 2024
£m Unaudited Audited
Accrued income 7.7 4.7
Prepayments 4.2 4.9
Corporation tax recoverable 1.8 2.8
Derivative financial instruments 1.1 -
Other receivables 0.2 0.3
Total other receivables 15.0 12.7
Accrued income represents fees earned, but not invoiced, at the reporting
date, which have no right of offset with contract liabilities - deferred
licence amounts. Accrued income increased by £3.0m since last year-end driven
by increased revenues and invoice timing.
Prepayments include £0.8m (FY 2024: £1.0m) of deferred costs in relation to
costs to fulfil contracts.
The Group enters into derivative financial instruments (forward contracts) to
hedge against foreign currency exposure. These instruments are initially
recognised at fair value and are subsequently measured at fair value at each
reporting date. The carrying value of the derivative financial instruments
therefore equals their fair value. Fair values are determined with reference
to observable market inputs, including spot and forward foreign exchange rates
as at the reporting date. Accordingly, these instruments are classified as
Level 2 in the fair value hierarchy under IFRS 13 Fair Value Measurement.
13. Current and non-current liabilities
£m H1 2025 FY 2024
Unaudited Audited
Current liabilities
Trade payables 0.9 1.0
Other payables 10.0 10.7
Contract liabilities - deferred licence and fees 8.0 8.1
Contract liabilities - deferred maintenance 10.4 7.6
Lease liabilities 0.5 0.1
Total current liabilities 29.8 27.5
Non-current liabilities
Lease liabilities 9.0 9.2
Provisions for other liabilities 0.7 0.8
Deferred tax liabilities 1.1 1.0
Total non-current liabilities 10.8 11.0
Total liabilities 40.6 38.5
14. Lease liabilities
The following table sets out the reconciliation of the lease liabilities from
1 January 2024 to the amount disclosed at 30 June 2025:
£m Total
Lease liabilities recognised at 1 January 2024 8.2
Additions 2.4
Interest charge 0.6
Payments made on lease liabilities (1.9)
At 31 December 2024 9.3
Interest charge 0.4
Payments made on lease liabilities (0.2)
At 30 June 2025 9.5
Additions to lease liabilities include extensions to existing lease
agreements.
Below is the summary of timing of the lease payments:
£m H1 2025 FY 2024
Unaudited Audited
Non-current liability 9.0 9.2
Current liability 0.5 0.1
9.5 9.3
Below is the maturity analysis of the lease liabilities:
£m H1 2025 FY 2024
Unaudited Audited
No later than 1 year 1.5 0.8
Between 1 year and 5 years 5.5 6.6
Later than 5 years 5.7 6.0
Total future lease payments 12.7 13.4
Total future interest payments (3.2) (4.1)
9.5 9.3
The movement during the year in lease liabilities is set out above. Movements
in cash and cash equivalents are set out in the cash flow statement. These are
the only changes in liabilities arising from financing activities in the year.
15. Own shares
£m H1 2025 FY 2024
Unaudited Audited
Balance at 1 January 7.9 8.7
Acquired in the period 0.9 0.7
Distributed on exercise of options (2.2) (1.5)
Balance at 30 June / 31 December 6.6 7.9
The own shares reserve represents the cost of shares in Alfa Financial
Software Holdings PLC that have been:
- Purchased in the market and held by the Group's employee benefit
trust to satisfy options under the Group's share options plans. The number of
shares held at 30 June 2025 was 539,667 (31 December 2024: 83,904); and
- Purchased in the market and held by the Group as a result of the
share buyback programme that was launched on 18 January 2022 and ended on 30
June 2023. The number of shares held at 30 June 2025 was 3,430,576 (31
December 2024: 4,775,119). The movement in the period relates to the
satisfying of options under the Group's share options plans.
Own shares distributed relate to shares issued to employees on exercise of
share options and for bonus awards deferred in shares.
16. Financial and liquidity risk management
The Group's activities expose it to a variety of financial risks: market risk
(including currency risk), credit risk and liquidity risk. The Half Year
Financial Statements do not include all financial risk management information
and disclosures required in the Annual Financial Statements; they should be
read in conjunction with the Annual Financial Statements. The responsibility
for risk management has remained with the Board and there have been no changes
to risk management policies since year-end.
17. Controlling party and related party transactions
The ultimate parent undertaking as at 30 June 2025 and 31 December 2024 was
CHP Software and Consulting Holdings Limited (the 'ultimate parent'), being
the parent undertaking of the smallest and largest group in relation to these
consolidated financial statements. The ultimate controlling party is Andrew
Page. There was no trading between the Group and the Parent in H1 2025 or H1
2024.
In H1 2024, the Group paid property expenses of £0.005m on behalf of the
ultimate parent and these were fully recharged back to the ultimate parent at
no mark up. There were no such expenses in H1 2025.
Dividends to the amount of £6.1m were paid to the ultimate parent in H1 2025
(H1 2024: £5.6m).
At 30 June 2025 there was £nil balances outstanding from, or to, the ultimate
parent (30 June 2024: £nil).
18. Dividends
The Board declared a 2.4 pence per share special dividend, amounting to
£7.1m, paid on 30 May 2025 with a record date of 2 May 2025. An ordinary
dividend of 1.4 pence per share for the year ended 31 December 2024 equating
to £4.1m was paid on 27 June 2025, with a record date of 30 May 2025.
The Board declared on 3 September 2025 a special dividend of 5.0 pence per
share, with an ex-dividend date of 25 September 2025, a record date of 26
September 2025 and a payment date of 7 November 2025. The special dividend
would amount to a total payment of c.£14.8m.
19. Subsequent events
There have been no reportable subsequent events.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors confirm that these condensed consolidated Half Year financial
statements (the 'Half Year Financial Statements') have been prepared in
accordance with International Accounting Standard 34, 'Half Year Financial
Reporting', as contained in UK-adopted international accounting standards and
that the Half Year management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
• an indication of important events that have occurred during the
first six months and their impact on the condensed Half Year Financial
Statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
• material related-party transactions in the first six months and any
material changes in the related-party transactions described in the last
annual report.
The current directors are listed below all of whom were directors during the
whole of the period:
Andrew Page
Andrew Denton
Duncan Magrath
Matthew White
Steve Breach
Adrian Chamberlain
Charlotte de Metz
Reena Raichura
Chris Sullivan
By order of the Board
Duncan Magrath
Chief Financial Officer
3 September 2025
INDEPENDENT REVIEW REPORT TO ALFA FINANCIAL SOFTWARE HOLDINGS PLC
Conclusion
We have been engaged by Alfa Financial Software Holdings PLC ('the Company')
to review the condensed set of financial statements of the Company and its
subsidiaries (the 'Group') in the half-yearly financial report for the six
months ended 30 June 2025 which comprises the consolidated statement of profit
or loss and comprehensive income, the consolidated statement of financial
position, the consolidated statement of changes in equity, the consolidated
statement of cash flows and related notes 1 to 19. We have read the other
information contained in the half-yearly financial report and considered
whether it contains any apparent material misstatements of fact or material
inconsistencies with the information in the condensed set of financial
statements.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 is not prepared, in all
material respects, in accordance with International Accounting Standard 34,
"Interim Financial Reporting" as contained in UK-adopted International
Accounting Standards, and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" ('ISRE (UK) 2410') issued for use in
the United Kingdom. A review of interim financial information consists of
making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual financial statements of the Group are
prepared in accordance with UK-adopted International Accounting Standards.
The condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting" as contained in UK-adopted
International Accounting Standards.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or that
management have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410, however future events or conditions may cause the Group and
the Company to cease to continue as a going concern.
Responsibilities of Directors
The half-yearly financial report, is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with International Accounting
Standard 34, "Interim Financial Reporting" as contained in UK-adopted
International Accounting Standards and the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Group's and the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the Group and the Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's Responsibilities for the Review of the Financial Information
In reviewing the half-yearly financial report, we are responsible for
expressing to the Company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our conclusion, including
our Conclusions Relating to Going Concern, are based on procedures that are
less extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK) 2410 "Review of Interim Financial
Information performed by the Independent Auditor of the Entity". Our review
work has been undertaken so that we might state to the Company those matters
we are required to state to them in an independent review report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company, for our review work,
for this report, or for the conclusions we have formed.
RSM UK Audit LLP
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
3 September 2025
DEFINITIONS
Constant currency
When the Group believes it would be helpful for understanding trends in its
business, the Group provides percentage increases or decreases in its revenues
to eliminate the effect of changes in currency values. When trend
information is expressed herein "in constant currencies", the comparative
results are derived by re-calculating comparative non-GBP denominated revenues
using the average exchange rates of the comparable months in the current
reporting period.
Operating free cash flow (FCF) conversion
Operating FCF conversion is calculated as cash from operations, less capital
expenditures and the principal element of lease payments, as a percentage of
operating profit. Operating FCF is calculated as follows:
H1 2025 H1 2024
Unaudited £m £m
Cash generated from operations 22.0 18.8
Capital expenditure (2.8) (2.8)
Principal element of lease payments (0.2) (0.6)
Operating FCF generated 19.0 15.4
Operating FCF Conversion 88% 95%
Total contract value (TCV)
Total contract value ("TCV") - TCV is calculated by analysing future contract
revenue based on the following components:
(i) an assumption of three years of Subscription payments (including
maintenance, Cloud Hosting and subscription licence) assuming these services
continued as planned (actual contract length varies by customer);
(ii) the estimated remaining time to complete Delivery and Software
Engineering deliverables within contracted software implementations, and
recognise deferred licence amounts (which may not all be under a signed
statement of work); and
(iii) Pre-implementation and ongoing Delivery and Software Engineering work
which is contracted under a statement of work.
As TCV is a reflection of future revenues, forward looking exchange rates are
used for the conversion into GBP. The exchange rates used for the TCV
calculation are as follows:
Exchange rates used for TCV H1 2025 H2 2024 H1 2024
USD 1.35 1.30 1.27
EUR 1.19 1.18 1.17
Investment in software
This represents the cost of time invested into developing and enhancing the
software, including on specific customer developments that are largely
chargeable. It is calculated by multiplying the time spent by a day rate which
is based on salary costs (varying by seniority) plus a flat overhead
allocation. This is the same metric that was previously disclosed as
'Investment in product' and the name was changed to better reflect the nature
of the cost.
Annual Recurring Revenue (ARR)*
Represents the average value of customer subscription contracts in the six
months to the reporting date, annualised.
Excludes any revenues that are one-time or, at contract inception, not
expected to be recurring for a period more than 12 months.
Net Revenue Retention % (NRR)*
Measures the percentage of recurring revenue retained from customers over the
last 12 months, including upsells and expansions, and net of customer losses.
* These measures have been included to reflect the increased importance of
subscription revenues to the Group.
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