Alfa Financial Software H1 revenues up 20pc, maintains FY guidance

(Sharecast News) - Finance industry software developer Alfa Financial Software said on Thursday that its first-half trading performance was in line with expectations, putting the group on track to meet full-year expectations. Alfa Financial said total revenues were up 20% in the six months ended 30 June at £62.5m, while annual recurring revenues rose 16% at £41.6m, with a net revenue retention rate of 112%. Pre-tax profits rose 34% to £21.5m and earnings per share increased by 33% to 5.38p.

The FTSE 250-listed firm highlighted that it had seen "very strong" software engineering revenues in H1, up 72% year-on-year, driving high first-half operating profit margins of 35%. Total contract value increased 9% to £211m, driven by ongoing growth in subscription revenues.

Alfa Financial also declared a special dividend of 5p per share, reflecting "sustained strong growth" in cash generation and continued capital allocation discipline.

Looking forward, Alfa said the "exceptionally strong conversion of wins in 2024" had resulted in a step up to a record level of total contract values at the prior year's end, creating "an excellent foundation" for continued long-term growth.

"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," said Alfa.

"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."

As of 1020 BST, Alfa Financial shares were up 0.023% at 217.55p.

Reporting by Iain Gilbert at Sharecast.com