Alfa Financial Software Hldgs PLC Revenue recognition for contract extension
RNS Number : 4241Q
Alfa Financial Software Hldgs PLC
26 February 2021
26 February 2021
Alfa Financial Software Holdings PLC
Finalisation of revenue recognition for contract extension
Alfa Financial Software Holdings PLC ("Alfa" or the "Company"),
a leading developer of mission-critical software for the asset
finance industry provides this update on revenue recognition for a
recently won contract.
We previously announced that we had won a five year extension to
the maintenance and licence subscription for an existing client.
The contract is different to our usual contracts in that there was
no associated implementation project, therefore a number of
judgements were needed which affected the period in which the
revenues should be recognised. At the time of the announcement, we
assumed that we would recognise at least c15% of the contract value
in 2020, which was in line with the initial cash receipt.
We have now completed our analysis of the contract in accordance
with accounting standards and have concluded that some of this
revenue will need to be accelerated because there is no further
work required to deliver the licence. That component (representing
just under 40% of the total contract value) will therefore be
recognised as a one-off amount on signing the contract in October
2020. The balance which represents the maintenance component will
be recognised over the five year life of the contract.
As a consequence, our expectations for revenue recognition in
2020 from this contract will be GBP4m ahead of our previous
expectations. There have been no changes to the contract itself. In
addition to the positive changes set out in this update, trading
has performed in line with our expectations.
Our audited results for the year to 31 December 2020 will be
published on 23 March 2021.
Andrew Denton, Chief Executive Officer of Alfa, said:
"I am delighted to announce another increase in our expectations
for 2020, and I continue to be excited about the prospects for our
Alfa Financial Software Holdings
Andrew Denton, Chief Executive
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
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(END) Dow Jones Newswires
February 26, 2021 02:00 ET (07:00 GMT)