31 January 2024
Alfa Financial Software Holdings
PLC
Q4 Trading update
Increased profit expectation for
FY23
Alfa Financial Software Holdings PLC ("Alfa" or
the "Company"), a leading developer of mission-critical software
for the asset finance industry, provides this scheduled pre-close
trading update on trading for the twelve months ended 31 December
2023.
Highlights
·
Increase in expected profits for the year of £1m.
·
11 deliveries, taking the total to a record 35 for the
year.
·
Two wins resulting in strong growth in TCV compared with a
year ago, driven by strong growth in subscription TCV.
Strong
trading
Alfa has continued to perform strongly with the
performance in the fourth quarter consistent with the third
quarter.
Q4 financial highlights are:
·
Subscription - double digit growth in revenues reflecting our
progress to a fully subscription-based model and continuing the
strong sequential growth we have seen since we started to migrate
away from perpetual licences.
·
Software - as previously guided we changed focus in H2 to
internal product investment. As a result, software revenue is down
versus last year, when we benefitted from strong chargeability in
Q4 following significant product investment in H1.
·
Services - constant currency revenue was in line with the
same period last year.
Overall revenue growth for the year
was in line with expectations, up 9% on FY22. We now expect costs
to be £1m lower than expected and as a consequence we expect
operating profit for FY23 will be c.£1m ahead of our original
expectations.
Record delivery
performance
One of Alfa's key strengths is its excellent
delivery performance which has continued through a very busy Q4.
Total deliveries, i.e. go-lives plus upgrades, in Q4 were 11. This
brings the total for the year to 35. This is a record number of
deliveries in a year and beats the previous best of 28 delivered in
2022.
In total for the year, we have had seven new
customer go-lives. Significantly three of these were for major new
customers. These were:
·
The UK subsidiary of a global automotive OEM
·
The automotive subsidiary of a major US bank
·
The Australian subsidiary of a global automotive
OEM.
The other four go-lives were two Alfa Starts and
two implementations of v5 for existing v4 customers.
Progressing a
strong pipeline
We have maintained a strong late-stage pipeline
through the year and we made significant progress at the end of the
year in converting two of these into wins, i.e. where we have a
full set of signed contracts. We expect Total Contract Value
("TCV") to finish the year significantly ahead of 2022 driven by
strong growth in subscription TCV.
One of the Q4 wins was for the UK subsidiary of
a global automotive OEM as mentioned above, which went live in Q4.
This had been in the late-stage pipeline for over a year and billed
under letters of engagement while implementation was underway. Full
contract packs were signed with them prior to go-live. The second
win was for a large bank owned US automotive finance customer that
signed full contract packs with implementation services contracted
through till 2025.
We continue to perform paid work under letters
of engagement with three new customers in the late-stage pipeline
while we work towards full contract packs. We also have two v4 to
v5 upgrade prospects in the late-stage pipeline.
Andrew Denton, Chief Executive Officer of Alfa,
said:
"I am
delighted that in 2023 we have continued to drive the business
forwards with strong revenue growth, a record number of deliveries
and an exciting product roadmap. Our pipeline remains strong and we
have seen strong growth in subscription TCV driving overall TCV
growth. The Board remains confident in the future prospects for the
business."
Notice of
results
The Company will report its full year results,
for the twelve months ended 31 December 2023, on Thursday 14 March
2024. Further details regarding the Company's presentation
to analysts and investors will be provided nearer the
time.
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
|
|
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.