Alfa Financial Software writes the systems that run car, equipment and commercial finance books for lenders and carmakers' finance arms in 37 countries. Revenue grew from £102m in 2023 to £127m in 2025 as customers moved to subscriptions. In the first half of 2026, revenue rose only 4% and operating profit fell 15% to £18.4m, even as recurring revenue grew 17%. The shares, at 160.8p on the latest close (9 October 2026), are well below their 2025 high of 239.5p.
Software that runs the finance book
Alfa has sold software to the asset finance and leasing industry since 1990. Its product, Alfa Systems, handles originations, servicing and collections. Named customers include a global carmaker's finance arm, a major European automotive manufacturer and a large US bank. The company says Alfa Systems is live in 37 countries.
It earns money in three ways. Subscription revenue (£24.1m in the first half of 2026) is SaaS (software rented over the internet) priced by the number of finance contracts on the platform, not by users. Delivery revenue (£32.4m) comes from implementation and upgrade projects. Software Engineering revenue (£8.6m) comes from customer-funded development.
Customers rarely leave. Since version 5 went live in 2010, Alfa has lost only two customers after go-live. One was bought by another Alfa customer and the other left the asset finance software market. Dependence on a few clients has also fallen. The top five customers made up 30% of revenue in the first half of 2026, against 61% in 2019. 3 Sep 2026 12 Mar 2026
A takeover approach ends and the roadmap shifts
In October 2023 the board ended talks with private equity firm Thomas H. Lee Partners (THL) over an unsolicited takeover approach. THL confirmed the next day that it would not make an offer. The shares closed October at 150p. The filings do not give the terms of the approach.
In November 2023 the company folded its AI unit, Alfa iQ, into the core product and began releasing Alfa Systems 6, a new version delivered in instalments over the next twelve months. Revenue that quarter was flat, with double-digit subscription growth offsetting weaker software sales. 3 Oct 2023 4 Oct 2023 14 Nov 2023
2024: a record order book and a bigger bet on subscriptions
2024 was the year the order book jumped. Alfa signed a record eight new customers, against three in 2023. Total contract value (TCV, the value of signed contracts) rose 34% to £221m. Alfa Systems 6 launched. Subscription revenue grew 18% and reached 34% of sales.
Revenue rose 8% to £110m, with profit ahead of expectations. The company renamed its revenue streams to Delivery and Software Engineering, saying only the labels changed. In May 2024 chairman Chris Sullivan's investment vehicle, CHP, sold 4.9% of the company at 173p, leaving it with 54.7%. The shares ended 2024 at 214.5p, up from 140p a year earlier. 13 Mar 2025 30 Jan 2025 30 May 2024 5 Sep 2024
2025: the contracts turn into revenue
The 2024 wins were implemented in 2025. Revenue rose 15% to £126.7m and operating profit 17% to £40.1m, a margin of 31.6%. Subscription revenue grew 16%. Software Engineering was very strong in the first half, up 72%, and weaker in the second. Management had guided for double-digit revenue growth and mid-teens subscription growth, and both came in.
The US now accounts for 45% of revenue, which the company said creates a currency headwind. The shares peaked at 239.5p in February 2025 and ended the year at 212p. 12 Mar 2026 4 Sep 2025 13 Nov 2025 13 Mar 2025
2026: simpler projects, fewer engineers, slower contracts
Early in 2026 profit growth stalled. More new customers are taking simpler installations with less bespoke work. That means less chargeable development, so Software Engineering revenue fell 17% in the first half. The company cut engineering capacity and booked £1.6m of severance. Foreign-exchange hedges swung from a £1.7m gain to a £0.3m loss. Without severance and hedges, operating profit would have risen 2%.
The cuts cost morale. Staff engagement fell to 64% from 78%. Projects have also been slower to reach signed contracts. The shares fell from 215p in January to 145p in March, and the company has not said why. They have since recovered somewhat. 3 Sep 2026 30 Jul 2026 30 Apr 2026
“The number of delays seems higher than we have historically seen and so we cannot rule out the possibility that the macro environment has had an impact.” 3 Sep 2026
Recurring revenue is growing; the rest is lumpy
Subscription revenue is the steady part. Subscription TCV almost doubled in four years, from £89m to £176m, and ARR (annual recurring revenue) reached £48.5m. New customers pay little during implementation and ramp up to full subscription only after go-live.
Delivery and Software Engineering revenue depend on when contracts are signed and how bespoke the work is. That produced the big first half of 2025 and the weaker one in 2026. Management's 2024 and 2025 guidance was met. The 2026 delivery expectation was trimmed slightly in September, with higher software engineering revenue expected to offset it. 3 Sep 2026 12 Mar 2026 4 Sep 2025
A long-serving team, a CFO handover and a controlled chair
Andrew Denton is chief executive. Chris Sullivan, whose vehicle CHP held 54.7% after its 2024 sale, chairs the board. At the April 2026 AGM his re-election drew 86.7% of all votes, and 65.2% of independent shareholders. In 2024 independents gave him 73.7%. He sold 200,000 shares at about £1.65 on 3 August 2026.
CFO Duncan Magrath retires at the end of 2026, having joined in 2020. He took a non-executive role at AIM-listed Bango in June 2026. His successor, Andrew Dickson, joined as CFO designate in July, bought 6,008 shares on 3 September and joins the board on 16 September. Peter George joined as non-executive director in January 2026. Adrian Chamberlain left the board in August 2026. 23 Dec 2025 12 Feb 2026 26 Jun 2026 3 Aug 2026 10 Aug 2026 30 Apr 2026 4 Aug 2026 3 Sep 2026 12 Dec 2025 1 May 2024
Contracts up, profit down, cash lower
For the six months to June 2026, revenue was £65.1m, up 4%, or 5% at constant currency. TCV rose 17% to £247m. ARR rose 17% to £48.5m, and net revenue retention (how much existing customers' revenue grew) was 110%. Two customers went live and nine upgraded.
Operating profit was £18.4m, down 15%. Cash fell to £22.2m from £26.4m at the end of 2025 after £13.7m of dividends, and there is no bank debt. Cash conversion was 76%. Nine prospects sit in the late-stage pipeline, and Alfa is preferred supplier on eight. Two were won in the half, including a Canadian programme for a global carmaker, and one was lost. Liontrust cut its holding from 9.14% to just under 5% in July. 3 Sep 2026 30 Jul 2026 14 Jul 2026
Meeting expectations, with no special dividend this time
Management expects to meet 2026 expectations. It says savings in the second half will give a small profit benefit this year and a larger one in 2027. Cash conversion should be 80-90% for 2026, with a long-term average of 90-100%. Its short-to-medium-term target is mid to high teens compound annual growth in subscription revenue.
Capital policy has changed. Special dividends were paid or declared in 2024 and 2025, but this time none was declared. The company will keep cash for flexibility, possibly small bolt-on acquisitions, and still pay a progressive ordinary dividend. It says it will return any excess later.
The risks it names are contract delays and the chance that live customers defer discretionary spending. Full-year results are due at the end of 2026. 3 Sep 2026 30 Jul 2026
“Reviewing current market conditions and software valuations we have concluded that rather than declaring a special dividend at this time we will retain the cash within the business.” 3 Sep 2026
Written by AI from Alfa Financial Software Holdings's own announcements since Oct 2023 · every paragraph links to its sources