Alfa Financial posts uptick in profit as it unveils special dividend

Asset finance software company Alfa Financial Software has posted an uptick in annual profit while announcing a special dividend as part of plans to return £9.7m to shareholders.

The firm reported a pretax profit of £29.6m in 2023, up slightly from £28.9m in 2022. It reported net cash of £21.8m and no bank debt.

Its revenue rose nine per cent to £102.0m, mainly driven by a 16 per cent jump in subscription revenues.

Alfa Financial proposed a final ordinary dividend of 1.3p per share, up eight per cent from 2022 and intended to pay out £3.8m.

Additionally, the firm unveiled a special dividend of 2p to return £5.9m to shareholders. Alfa Financial has paid out £109m in special dividends over the last three years.

The company’s shares rose 2.4 per cent on Thursday morning.

Alfa Financial posted a record total contract value (TCV) of £165.3m last year, up 16 per cent from £142.9m in 2022. Its subscription TCV grew 28 per cent.

The firm noted that the macroeconomic outlook remained “uncertain” but “the recent high levels of inflation have eased and interest rates may have peaked”.

Alfa Financial expected mid to high single-digit revenue growth in 2024 “driven by continuing strong growth in subscription”.

Chief executive Andrew Denton said: “Throughout 2023 we have remained focused on operational excellence and delivering our strategy with continuing strong growth in our subscription business and a record seven go-lives for our customers.”

He added: “The business is supported by a growing subscription revenue base and the conversion of the late-stage pipeline points to a strong second half in 2024 for our services. This alongside the inherent robustness of the asset finance software market and our continued investment in high-quality people, underpins our strong confidence in the outlook for the business.”