Alfa Financial Software Holdings PLC (lon:alfa)
Alfa Financial Software – Mostly Ignored, Unfairly?


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Title: Alfa Financial Software – Mostly Ignored, Unfairly?
Company: ALFA - Alfa Financial Software Holdings PLC
Share Price Then: 116p
Author: Ian Smith
Date: Wed 27 Feb 2019
Comments: Alfa are FTSE small cap company selling software for managing auto, equipment and wholesale finance with a turnover of around £87million.

Alfa’s income comes from three different areas and in 2017 these were half from new implementation, a quarter from maintenance and a quarter from ongoing development.

Of their customers half are banks, a quarter car and equipment makers and the rest are independent of these two categories.

Although a well-established company they have only been listed since May 2017 and initially traded around 400p-550p, then in June 2018 announced lower than expected sales, from £87million in 2017 to £75million in 2018.

This triggered a sharp drop then a gradual drop to around 120p.

Although this is a big drop in sales it has to be seen in the context of Alfa having only 32 customers in 26 countries, these are big customers like Mercedes Benz, Motability and Santander. So it is easy to see that each client’s plans for new systems, updating systems or changing supplier will have a big impact, and this is what happened when a couple of customers delayed new projects during 2018.

Given the nature of their customers it is hard to see quick and easy growth, easy to see a quick drop and easy to see a flat level of trading.

With 2018 preliminary results expected on the 3rd of March 2019 and this being is a low trading volume share there could be a spike in interest.
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