Alfa Financial Software Hldgs PLC Trading Update (9246I)
December 17 2020 - 1:00AM
UK Regulatory
TIDMALFA
RNS Number : 9246I
Alfa Financial Software Hldgs PLC
17 December 2020
17 December 2020
Alfa Financial Software Holdings PLC
Trading Update
Alfa Financial Software Holdings PLC ("Alfa" or the "Company"),
a leading developer of mission-critical software for the asset
finance industry, is pleased to provide an update on current
trading.
The positive momentum from earlier in the year has continued and
we have seen strong performances in both October and November, and
anticipate that December will also be better than previously
expected. The strong performance has been a combination of higher
revenue along with lower costs.
The higher revenues are due to:
-- continuation of contractual commitments for existing
projects, with additional statements of work being secured
-- pre-implementation work in advance of potential contracts for
new implementations or upgrades; and
-- a smaller than expected negative impact from holidays delayed from the first half.
We are also pleased to announce that an existing UK equipment
finance customer, who we have been working with under letters of
engagement, and who has been in our late stage pipeline for six
months, has now signed contracts to upgrade from Alfa Version 4 to
Alfa Version 5. The contract will rank as a middle tier contract by
value, and will be implemented into an Alfa Cloud Hosting
environment.
We noted at the half year that we had seen reduced travel,
conference and marketing costs as a result of the pandemic. This
reduced level of spend has continued through the second half. We
were also expecting to complete some internal infrastructure
upgrade projects, but with time being spent supporting revenue
growth, these costs have been delayed into 2021.
Overall therefore we expect to exceed our current revenue
expectations for the year ending 31 December 2020 by just under 5%
with all of the benefit flowing into EBIT in addition to the
continuing benefit of the reduced costs.
Looking to 2021, we expect a larger proportion of our work to be
spent on upgrading existing customers to Version 5 and in the
expansion of our global relationships under existing licences
rather than new standalone projects. Retaining and expanding our
footprint with existing customers is a real show of strength in the
service that we deliver to them, albeit that these upgrades and
expansions will generate a lower level of perpetual licence income
next year. We do expect an increase in our costs as we return to a
more normal level of working, along with the impact of the delayed
internal projects noted above and with an increase in the levels of
holiday being taken once the travel restrictions from the pandemic
have eased. Whilst the late stage pipeline continues to develop
well, we have a lower level of contractual visibility than we would
like, particularly given the current macro-economic environment. We
are building a business that has the capability to grow both
revenue and profits, but until contractual cover is secured our
expectations of 2021 financial performance remain unchanged.
Andrew Denton, Chief Executive Officer of Alfa, said:
"Given the uncertainties at the start of the year, I am
delighted to be finishing with a strong performance not only
financially but also by confirming the continuation of a
longstanding customer relationship with a new contract to upgrade
to Alfa Version 5.
I am particularly pleased that this important customer has
recommitted to Alfa. Their commitment to this upgrade underlines
the continued strength of the Alfa product and the high quality
service that we have delivered over many years. The new version
will give them access to the industry leading functionality and
technology in the recently released Alfa 5.6 deployed using
always-on Alfa Cloud Hosting with fully managed infrastructure and
regular upgrades.
Overall, it is very encouraging to see a further increase in our
expectations for 2020, and whilst our expectations for 2021
currently remain unchanged, if we continue to convert our late
stage pipeline and secure work for 2021 we should see improvements
in our revenue and profit expectations."
Enquiries
Alfa Financial Software Holdings
PLC
Andrew Denton, Chief Executive
Officer
Duncan Magrath, Chief Financial
Officer +44 (0)20 7588 1800
Tulchan Communications LLP
James Macey White
Matt Low +44 (0)20 7353 4200
Notes to Editors
Alfa has been delivering software systems and consultancy
services to the global asset and automotive finance industry since
1990. Our best practice methodologies and specialised knowledge of
asset finance facilitates delivery of large software
implementations and highly complex business change projects. With
an excellent delivery track record spanning three decades, 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 finance companies. Key
to the business case for each implementation is Alfa Systems'
ability to replace multiple customer systems with our 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, Alfa Systems provides
compelling solutions to asset finance companies.
Alfa Systems is currently used by customers or has live
implementations in 26 countries and Alfa has offices in Europe,
Australasia and North America. For more information, visit
www.alfasystems.com.
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