Alfa Financial H1 profit and revenue drop on contract delays

4th Sep 2018 08:46

(Sharecast News) - Alfa Financial Software Holdings posted a drop in first-half profit on Tuesday, partly on the back of contract delays and a weaker dollar.In the six months to 30 June, pre-tax profit fell to £8.62m from £14.02m on revenue of £32.9m, down 27% from the same period a year ago. The company said the weaker US dollar contributed to the revenue decline and the majority of the top line contraction was due to a fall in revenues from its software implementation segment.Alfa said it had been informed by one of its major customers that it wanted to delay its implementation project for internal reasons, with an understanding that a restart is expected in early 2019. This understanding has not changed and Alfa said it remains in active dialogue with the customer.In addition, a potential new customer delayed a decision on its implementation project because it is considering increasing its geographical and functional scope, and one of its larger existing customers extended its decision point for the expansion of its Alfa footprint. Implementation start dates for these were projected to be later in 2018, or into 2019. "We continue to progress discussions in respect of both of these projects," it said.Chief executive officer Andrew Denton said: "As we said at the time, we were very disappointed by the delays in contracts announced in early June. However, we remain confident in the long term prospects of Alfa. We continue to have a strong market position with a proven track record in project execution and a blue-chip client list. We were very pleased to have signed an upgrade and expansion agreement with a leading retail bank to support their exciting plans in the UK B2B asset finance market and we look forward to building on this with further sales in all of our key markets."The pipeline for Alfa is healthy, both in terms of geographic and market segment mix, and in terms of number of opportunities. We approach the remainder of the year focused on conversion of these opportunities. We also continue to make incremental cost savings across the business with the aim of achieving immediate operational efficiencies whilst ensuring that we have the right platform in place to return to growth."At 0900 BST, the shares were down 10% to 141.88p.