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(Alliance News) - Shares dropped in Alfa Financial Software Holdings PLC on Monday as it guided for lower profit and revenue for the first half of 2019 due to project delays and a reduction in customer spend.
As a result, Alfa now anticipates profit for the year to be significantly below its prior expectations.
Shares in the asset finance software firm were 18% lower at 76.70 pence on Monday morning.
For the six months to the end of June, Alfa expects an operating profit of GBP5.0 million, down 41% from GBP8.6 million the year before. This is on revenue that is anticipated to be GBP31 million, a 5.8% decline from GBP32.9 million.
Alfa's expected profit and revenue drop was attributed to delays in implementing some projects and reduced customer spend on optional upgrades and non-critical work, driven by macroeconomic uncertainty.
However, Alfa said it has made progress in the first half with a live project for a European original equipment manufacturer, and work with two new customers in advance of concluding licence arrangements.
Looking further ahead, assuming challenging market conditions continue for the rest of 2019, Alfa expects revenue for the year to be in the range of GBP63 million and GBP65 million, an 11% to 8.4% drop from GBP71 million the prior year.
In addition to the revenue decline, the group said competition for talent remains high in its markets, and it expects to incur additional costs in the second half of 2019 from one-off legal costs and remuneration increases for its teams.
As a result, profit for 2019 is set to be significantly below management expectations.
"Whilst we remain cautiously optimistic regarding pipeline development, we anticipate the broader macro uncertainty impacting our markets extending into 2020," Alfa said.
Alfa Financial Software will publish its interim results on Thursday next week.