Alfa Financial Software Holdings Regulatory News (ALFA)

27 April 2022

Alfa Financial Software Holdings PLC

Q1 trading update and Special Dividend

Alfa Financial Software Holdings PLC ("Alfa" or the "Company"), a leading developer of mission-critical software for the asset finance industry provides an update on trading for the first quarter of the year ended 31 March 2022 and is also pleased to announce an additional Special Dividend of 3 pence per share.

Operational performance

In the first quarter we have seen further strong delivery for our customers, with one go-live as well as three upgrades. We have delivered a further go-live and two upgrades since the period closed.

We have seen significant progress with our partner program and have nearly doubled the number of chargeable partner days this quarter compared with the same quarter last year.

Plans for our Smart Hub in Portugal have also progressed during the quarter. We have placed job adverts for remote developers based in the Lisbon area and we are actively recruiting. We remain confident of our first recruits joining us in the second half of this year to boost our Product Engineering capability.

As we announced at the time of our full year 2021 results, we have converted one prospect from the late stage pipeline to a win, and have added a new prospect. We have also seen three prospects in the late stage pipeline move to 'preferred supplier' status. We continue to add prospects into the pipeline and it further strengthens our confidence for our future growth ambitions.

Q1 trading

We have seen strong revenue growth in the first quarter with revenue of £22.5m up more than 10% on this time last year (2021: £20.2m). In the month of March, we worked more chargeable days than at any time in the Company's history and we expect these high levels of chargeability to continue.

As expected, we saw continued strong growth in subscription revenues. Software revenues were also up significantly over last year. Services were in line with last year, largely due to extra vacation days taken this year compared with the very low level taken in the first quarter last year. This revenue performance is consistent with our expectations and cash generation has remained strong.

Return of capital

On 18 January 2022 we announced a share buyback program of up to £18m over the next 18 months. This was due to the Company having a very cash generative business model, significant net cash balances and future cash projections showing generation of more cash than the Company needs for its current plans.

Even after allowing for the share buyback program and the payment of the regular dividend, it is clear that we continue to generate excess cash and our cash balances are continuing to grow. We have therefore decided to declare a Special Dividend of 3 pence per share, equivalent to a £9m return to shareholders. This follows on from the Special Dividends of 15 pence per share paid in November 2020 and 10 pence per share paid in November 2021.

This 3 pence Special Dividend will be paid on 16 June 2022 to holders on the register as at 6 May 2022. The shares will be marked ex-dividend on 5 May 2022. This Special Dividend is in addition to the proposed final dividend of 1.1 pence per share, which if approved by shareholders at the AGM on 12 May 2022, will be paid on 24 June 2022.

Andrew Denton, Chief Executive Officer of Alfa, said:

"2021 was an outstanding year for delivery across the Company, and it is pleasing to see that strong performance has carried into the first quarter of 2022. The strength of our order book, our sales execution and our pipeline all give us confidence that the high demand for our services will continue. Whilst we are operating in a competitive market for the exceptional talent we seek to recruit and retain, we are currently performing well and in line with our plans in these areas and we are seeing significant progress in the number of partner resources in use. Whilst there is a significant degree of macro-economic uncertainty, we are confident in our expectations for the full year and believe that we have the opportunity to exceed them as the year continues."

Enquiries

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's business, results of operations, financial position, liquidity, prospects, growth or strategies. Forward-looking statements speak only as of the date they are made.

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 live in 37 countries where it is supporting a portfolio where the customers' end clients are located. Alfa has offices in Europe, Australasia and North America. For more information, visit www.alfasystems.com.