- Alfa Financial Software Holdings
- 12 March 2026 09:58:11
Source: Sharecast
The FTSE 250 asset finance software provider said revenue for the year ended 31 December rose 15% to £126.7m from £109.9m, or 17% on a constant currency basis.
Operating profit increased 17% to £40.1m, representing an operating margin of 31.6% compared with 31.2% a year earlier, while profit before tax rose 18% to £40.1m.
Basic earnings per share climbed 17% to 10.19p, with diluted earnings per share up 18% to 10.14p.
The company also reported strong cash generation, with operating cash flow rising 19% to £44.5m and operating free cash flow conversion improving to 97% from 89% a year earlier.
Subscription revenues continued to expand, rising 16% during the year and remaining the company’s fastest-growing revenue stream.
Annual recurring revenue increased 15% to £43.9m, while net revenue retention improved to 109% from 103% in 2024 as new customers increased subscription spending during implementation phases.
Total contract value rose 3% to £227.5m, driven by growth in subscription-related contracts.
The firm ended the year with cash of £26.4m and no bank debt.
Alfa said its balance sheet strength supported shareholder returns, with the board proposing an ordinary dividend of 1.5p per share and declaring a special dividend of 3.1p, up from 2.4p the prior year.
Operationally, Alfa reported continued sales and delivery momentum.
The company completed 35 software go-lives during the year, bringing the number of customers running Alfa Systems 6 to 20.
Its late-stage sales pipeline comprised 10 prospects at year-end, half of which were already operating under letters of engagement.
The group continued investing heavily in product development, spending £37.7m during the year to enhance its software platform and expand functionality in areas including US auto originations, fleet management and commercial finance.
Alfa said the investment would increase both its serviceable and target addressable markets.
“In 2025 we delivered exceptional operational performance along with a very strong financial performance generating 17% constant currency revenue growth and a 32% operating profit margin, meaning our target of ‘Rule of 40’ was well and truly beaten,” said chief executive Andrew Denton.
“It also was a year of strong strategic progress with Subscription revenues up 16%.”
Looking ahead, the company said it expected continued revenue growth in 2026 supported by a healthy sales pipeline, although currency movements could weigh on reported results as the United States now accounts for around 45% of revenue.
“The strength of our culture along with the proven success of our strategy, the quality of our people and our product, and our very healthy pipeline mean we remain confident in the outlook for the business,” Denton added.
At 0936 GMT, shares in Alfa Financial Software Holdings were down 7.35% at 179p.
Reporting by Josh White for Sharecast.com.
