Alfa Financial Software (ALFA) H2 2024 earnings summary

Executive summary

• Eight new customer wins drove record TCV of £221m, up 34% year over year.

• Subscription revenue grew 18% and reached 34% of total revenue, supporting the transition to a SaaS-only sales strategy.

• Customer concentration declined to 32% among the top five customers; the largest customer represented 7% of revenue.

• Alfa Systems 6 launched with 10 new modules.

• Investment included £37.1m in product development; headcount increased 5% and staff retention was 96%.

Financial highlights

• Revenue rose 8% to £109.9m, or 9% at constant currency.

• Operating profit increased 14% to £34.3m; operating margin was 31.2%.

• EBITDA margin increased to 33.7% from 32.0%; gross profit margin improved 200bps to 64.5%.

• Basic EPS rose 9% to 8.68p; diluted EPS rose 8% to 8.56p.

• Total dividends increased 10% to 8.0p per share; year-end cash was £20.5m.

Outlook and guidance

• 2025 guidance: mid-teens subscription revenue growth and double-digit overall revenue growth.

• Product and client-led development investment to continue, with elevated capitalised development and amortisation.

• 2025 cash conversion expected at 80–90% due to project cash timing; average cash conversion expected at 90–100%.

• Effective tax rate expected to be ~25%.