Alfa Financial Software Holdings PLC has published its unaudited results for the first half of 2023, reporting a strong performance and reiterating its full-year expectations. The company saw a 21% increase in revenue compared to the same period in 2022, with operating profit up 19%. Subscription revenues were up 14%, supported by a 33% increase in hosting, while software revenues increased by 33% due to high customer-funded development. Services also saw growth, with a 21% increase in revenue. The company maintained strong cash generation, with a 140% operating free cash flow conversion. Alfa Financial Software Holdings also declared a special dividend of 4.0 pence per share.
In terms of strategic highlights, Alfa Financial Software Holdings noted that its customer base has become more diversified, with the top five customers now accounting for 36% of revenues compared to 64% four years ago. The company is working with 11 customers in the late-stage pipeline and is in at least preferred supplier status with 10 customers overall. The total contract value (TCV) remained at £138 million, in line with the first half of 2022. Alfa Financial Software Holdings also highlighted its strong software delivery and cloud hosting performance, as well as its expansion of the partner program in the US. The company continues to invest in people and product for future growth, with a retention rate of 95%. It has also had its emission reduction targets validated by SBTi and is committed to achieving Net Zero by 2050.
Looking ahead, Alfa Financial Software Holdings remains conscious of the uncertain economic outlook but is confident in its ability to convert its strong pipeline into new customers. The company plans to increase its investment in software in the second half of the year to stay in line with its full-year product roadmap plans. As a result, its full-year expectations remain unchanged. CEO Andrew Denton expressed confidence in the outlook for the business, stating, "Our high level of customer funded development, weighted more towards the first half this year, helped fuel strong growth for the period along with the growth in the team."