2026 Half Year Report
Summary by AI BETAClose X
3 September 2026
Alfa Financial Software Holdings PLC
2026 Half Year Report
Strong growth in ARR and TCV, demonstrating continued strategic progress
Alfa Financial Software Holdings PLC ("Alfa" or the "Company"), a leading developer of software for the asset finance industry, today publishes its unaudited results for the six months ended 30 June 2026 ("the period").
Financial highlights:
· Trading in line, on track to meet full year expectations
· Strong recurring revenue growth and pipeline visibility underpinning confidence in future prospects
· TCV of £247.0m up 17% (H1 2025: £210.7m) driven by ongoing growth in subscription revenue
· Next 12 months TCV up 12% to £100.6m (H1 2025: £89.9m)
· ARR of £48.5m up 17% (H1 2025: £41.6m) with NRR of 110% (30 June 2025: 112%)
· Revenue of £65.1m (H1 2025: £62.5m) up 4% or 5% at constant currency
o Subscription revenues up 14% to £24.1m (H1 2025: £21.2m)
o Delivery revenues up 5% to £32.4m (H1 2025: £31.0m)
o Software Engineering revenues of £8.6m down 17% versus a very strong first half last year (H1 2025: £10.3m) impacting gross margin
· H1 Operating profit impacted by severance costs, principally for adjusting Product Engineering capacity, and FX hedges without which operating profit would have increased by 2% to £20.3m (H1 2025: £19.9m)
· Robust balance sheet position with £22.2m (31 Dec 2025: £26.4m) of cash and no bank debt
Financial summary
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Results |
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£m, unless otherwise stated |
H1 2026 Unaudited |
H1 2025 Unaudited |
Movement % |
|||
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Revenue |
65.1 |
62.5 |
4% |
|||
|
Operating profit |
18.4 |
21.6 |
(15)% |
|||
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Operating profit before severance costs and FX hedges |
20.3 |
19.9 |
2% |
|||
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Profit before tax |
18.2 |
21.5 |
(15)% |
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Earnings per share - basic (p) |
4.55 |
5.38 |
(15)% |
|||
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Earnings per share - diluted (p) |
4.55 |
5.35 |
(15)% |
|||
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Dividends paid |
13.7 |
11.2 |
22% |
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£m |
H1 2026 Unaudited |
31 Dec 2025 Audited |
Movement % |
|||
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Cash |
22.2 |
26.4 |
(16)% |
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Key measures (1) |
H1 2026 Unaudited |
H1 2025 Unaudited |
Movement |
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£m, unless otherwise stated |
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% |
|||
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Revenue - constant currency |
65.1 |
62.0 |
5% |
|||
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Cash generated from operations |
17.6 |
22.0 |
(20)% |
|||
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Operating free cash flow conversion (%) |
76% |
88% |
(12)% |
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Total Contract Value (TCV) |
247.0 |
210.7 |
17% |
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(1) See definitions section for further information regarding calculation of measures not defined by IFRS.
Strategic highlights:
Growing SaaS subscription revenues
· Subscription revenues grew 14% versus H1 2025
· ARR of £48.5m up 17% on last year
· NRR of 110% supported by new customers subscription revenues increasing through the implementation phase
· Subscription TCV grew 22% versus H1 2025
· Alfa Cloud customers now total 24 (H1 2025: 23), 16 live with 8 in implementation
Strong sales and delivery momentum
· Strong late-stage pipeline with nine prospects
· Three out of nine customers in late-stage pipeline working under letters of engagement
· Two go-lives in the period, demonstrating continued delivery excellence
Strengthening product and business
· Further development of our software with £19.6m investment in software (H1 2025: £19.4m) increasing our competitive lead
· AI strengthening our product and delivery model, ultimately leading to faster implementations and expanding addressable market
· Good progress on developing US Auto Originations, Fleet and Commercial Finance. We are working with customers for the first two areas and in discussions with a prospect for the third
Outlook
We continue to see exciting opportunities come to market and the strength of the early pipeline appears unaffected by macroeconomic uncertainty. We are pleased with the overall strength of the late-stage pipeline, although enterprise software sales remain subject to timing risk and we have seen some delays in moving projects to contract. These delays mean that our delivery revenue expectations for the year are slightly reduced, but we expect this to be offset by improved software engineering revenues. Overall, we expect to meet expectations for the year.
Andrew Denton, Chief Executive Officer
"After a very strong FY25 we continued to make excellent progress in growing high-quality subscription revenues and are set to continue doing so as customers move through implementation and reach full subscription run rates after final go-live. This demonstrates the strength and quality of our growth model. Looking ahead, we are developing our approach to AI and see the technology as an important accelerator of our strategy that will reduce friction, grow our addressable market, bring more customers onto Alfa Systems more quickly and support further growth in recurring subscription revenues."
Enquiries
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Alfa Financial Software Holdings PLC |
+44 (0)20 7588 1800 |
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Andrew Denton, Chief Executive Officer Duncan Magrath, Chief Financial Officer Andrew Page, Executive Chairman
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Barclays |
+44 (0)20 7623 2323 |
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Robert Mayhew Anusuya Gupta
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Investec |
+44 (0)20 7597 4000 |
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Patrick Robb Virginia Bull
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Panmure Liberum Ltd |
+44 (0)20 3100 2000 |
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Rupert Dearden James Sinclair-Ford
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Teneo |
+44 (0)20 7353 4200 |
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James Macey White Arthur Rogers
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Investor and analyst webcast
The Company will host a conference call today at 09:45am. To obtain details for the conference call, please email alfa@teneo.com. Please dial in at least 10 minutes prior to the start time.
An archived webcast of the call will be available on the Investors page of the Company's website https://www.alfasystems.com/en-eu/investors
Notes to editors
Alfa has been delivering leading-edge technology to the global asset finance and leasing industry since 1990. Our specialised expertise enables us to deliver the most challenging systems transformation projects successfully.
Alfa Systems, our class-leading SaaS platform, is at the heart of the world's largest and most progressive asset finance operations. Supporting all types of automotive, equipment, wholesale and commercial finance, Alfa Systems is proven at volume and across borders, and trusted by leading brands to manage complex portfolios, drive efficiency and sustainability, and enhance the customer experience.
With full functionality for originations, servicing and collections, Alfa Systems is live in 37 countries, representing an integrated point solution, a rapid off-the-shelf implementation, or an end-to-end platform for the complex global enterprise.
Alfa maintains exceptional customer satisfaction through an impeccable track record, with our experience and performance unrivalled in the industry. Our customers stick with us for the long term, because we deliver value that lasts for decades.
Alfa has offices all over Europe, Australasia and the Americas. For more information, visit us at alfasystems.com or on LinkedIn.
Forward-looking statements
This Half Year Report (HYR) has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The HYR should not be relied on by any other party or for any other purpose. This report contains certain forward-looking statements. All statements other than statements of historical fact are forward-looking statements. These include statements regarding Alfa's intentions, beliefs or current expectations, and those of our officers, directors and employees, concerning (without limitation), with respect to the financial condition, results of operations, liquidity, prospects, growth, strategies and businesses of Alfa. These statements and forecasts involve known and unknown risks, uncertainty and assumptions because they relate to events and depend upon circumstances that will or may occur in the future and should therefore be treated with caution. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are made only as at the date of this announcement. Nothing in this announcement should be construed as a profit forecast. Except as required by applicable law, Alfa disclaims any obligation or undertaking to update the forward-looking statements or to correct any inaccuracies therein, or to keep current any other information contained in the HYR. Accordingly, reliance should not be placed on any forward-looking statements.
BUSINESS REVIEW
Strong strategic progress
In the first half of 2026 we have continued to make significant strategic progress:
· Subscription & ARR growth - our strong sequential growth in subscription and ARR revenues has continued
· Building platform AI solutions - core AI platform being built. We have made good progress in the development of the underlying infrastructure, APIs and regulatory controls along with the creation of demo capability to be used as part of customer workshops
· Product development - continued progress particularly in the areas of US Auto Originations successful RouteOne campaign in US, Commercial Finance and Fleet, increasing the Serviceable and Target Addressable Markets
· Incremental sales - on the back of the strong positive customer reaction to Alfa Systems 6 we have sold incremental modules to a number of existing customers
H1 in line with expectations
Financial performance in the first half was as expected, with revenue up 5% on a constant currency basis or up 4% at actual exchange rates to £65.1m (H1 2025: £62.5m). Subscription revenues continued to grow strongly up 14%. Delivery revenues were up 5% on H1 2025, although slightly lower than our expectations with some delays to projects. Software Engineering revenues were higher than expected, although down 17% on H1 2025.
Software Engineering revenues are dependent on the stage of implementation work and the maturity of the product in the markets it is being implemented into. As previously communicated, this year we expected a greater proportion of implementations to follow a simpler deployment pattern with less bespoke requirements, which reduces chargeable development but typically accelerates time to full Subscription run rate. This change in demand drove the adjustment to our capacity through the non-voluntary departures.
Annual Recurring Revenue (ARR) of £48.5m (H1 2025: £41.6m) was up 17%. Net Revenue Retention percentage (NRR) was high at 110% (H1 2025: 112%), benefiting from the increase in subscription revenues from new customers where revenue ramps up over time, along with growth from existing customers. The 110% NRR demonstrates the stickiness of our customer base.
Operating profit was down 15% to £18.4m (H1 2025: £21.6m) impacted by £1.6m of severance costs in H1 2026, the impact of FX hedges moving from a £1.7m gain last year to a loss of £0.3m this year and the reduction in Software Engineering revenues. The severance costs arose from adjusting the capacity, principally in Product Engineering, to align with the work ahead of us. Cash conversion in the period was 76% (H1 2025: 88%) which as expected was impacted by the reversal of the accelerated receipts at the end of 2025. We expect cash conversion for 2026 of 80% - 90%, but with long term guidance for average cash conversion to be between 90% - 100%. We finished the period with net cash of £22.2m (31 Dec 2025: £26.4m).
Two pipeline conversions driving strong TCV growth
We saw strong growth in our TCV in the first half of 2026 with two pipeline conversions to finish the period with TCV of £247.0m up 17% versus this time last year. This growth was driven by 22% growth in both Delivery TCV and Subscription TCV, slightly offset by a reduction in Software Engineering TCV. Over the last four years Subscription TCV has almost doubled from £89.2m at 30 June 2022 to £176.0m at 30 June 2026. This represents a CAGR over the last four years of 19% per annum, increasing visibility over future recurring revenues, and gives us confidence that we will continue to achieve mid to high teens CAGR in Subscription revenues for the short-to-medium term.
Our revenue base continues to become broader and more diversified with our top five customers representing 30% of our revenues in H1 2026, compared with 61% in 2019. This increasing diversification enhances revenue resilience and reduces concentration risk. At 30 June 2026 our largest customer represented 8% of our revenues, down from 10% for H1 2025.
The stickiness of our customers on our modern software is demonstrated by NRR of 110% (H1 2025: 112%) and the fact that we have only lost two customers after go-live since we went live in 2010 with version 5 of our software, one which was bought by another Alfa customer while the other exited the asset finance software market.
Strong growth in US headcount with reductions elsewhere
We have continued to expand our delivery capability in the US. Total US headcount increased from 115 at 30 June 2025 to 127 at 30 June 2026. Our 2026 US graduates started in July, and we are looking to employ more experienced hires for the US. Headcount in EMEA was down to 348 at 30 June 2026 (30 June 2025: 366), principally due to reductions in Product Engineering where we have adjusted our capacity to align with the work we see ahead of us. In AsiaPac our headcount remained relatively stable.
Overall headcount as at 30 June 2026 was down at 502 (30 June 2025: 512) with average headcount in the period of 521 (H1 2025: 508) up 3% on last year.
In H1 2026 the retention rate decreased as a consequence of the involuntary departures, largely in Product Engineering. Stripping these out our retention rate remains high as of 30 June 2026 at 96% (30 June 2025: 98%).
The impact of the product engineering involuntary departures was seen on our engagement scores which declined to 64% (H1 2025: 78%). We are engaging with our people to try and improve this and return to the strong levels we have seen over the last few years.
Investment in software and AI
We continued to invest in Alfa Systems during the period, both to extend our market-leading product and to build practical AI-enabled capabilities for customers. We invested £19.6m into the further development of our software in H1 (H1 2025: £19.4m), continuing to invest in US Auto Originations, Fleet and Commercial Finance. These will increase both the proportion of our market that we can access as well as the size of our total addressable market.
We see AI as an opportunity for Alfa: it amplifies the value of our domain expertise, our trusted SaaS platform and our delivery experience.
Crucially AI has the potential to reduce implementation effort and shorten time to value for customers which will increase the number of customers that Alfa can serve, expand our addressable market and accelerate the growth of higher-quality recurring subscription revenues. Alfa Systems is priced by the asset finance contracts managed on the platform rather than by user numbers, which means customer efficiency gains from AI do not undermine our subscription model or pricing.
Our AI products are now grouped under the Thea brand. Thea Core is the foundation layer that enables AI capabilities within Alfa Systems to communicate safely and efficiently with large language models in a model-agnostic way. This provides a consistent architecture for future AI-powered features, with appropriate focus on security, auditability, testing and deployment within Alfa Cloud.
We are developing a number of practical customer-facing use cases on this foundation. Thea Notes is designed to summarise and interrogate notepad entries, helping users understand customer history more quickly while respecting existing access controls. Thea Lens is our intelligent document processing capability, aimed at classifying, extracting and reconciling information from documents within Alfa workflows. We are also progressing Thea Connect, an Alfa Cloud MCP, to explore how customers connect AI assistants directly into Alfa processes while Alfa Systems remains the system of record for permissions, approvals, business rules and audit.
We are also using AI internally to improve productivity and delivery efficiency. Two implementation pilots, one in EMEA and one in the US, have been tasked with using AI wherever appropriate to accelerate Alfa-owned implementation activities. Early examples include data migration, where AI-assisted development of transformation code reduced the effort for a significant migration task by around 75%, reconciling migration output, assisting with documentation and supporting analysis and configuration-related activities. We have also completed a pilot using AI tooling to accelerate software development and are moving into business-as-usual adoption where it supports quality and productivity.
Overall, advances in AI strengthen the strategic logic of Alfa Cloud, Alfa Start and our product investment agenda. We believe our combination of deep asset finance expertise, enterprise-grade software, structured operational data and proven delivery capability positions Alfa well to benefit from AI adoption across our market.
Strong delivery execution
We delivered two go-lives and nine upgrades in the first half. In the first quarter we had a successful go-live for a long-standing customer who upgraded from v4 onto AS6. The go-live involved migrating portfolios in two different countries onto a single segregated instance on Alfa Cloud, allowing them to simplify their own internal systems infrastructure along with the product benefits of moving onto AS6. There was a second go-live in Q2. This was for a limited new-business pilot, with a ramp up in new business volumes expected over the coming months. Migrations of the existing finance book are expected to follow, resulting in due course in our largest Alfa Cloud implementation.
These two go-lives demonstrate the continued excellence of our delivery capability across the globe, demonstrating Alfa's ability to deliver complex, multi-country migrations at scale on Alfa Cloud.
Three of the nine upgrades were from V5 to AS6, and we now have just nine customers still on V5 versions of Alfa Systems.
We continue to invest in our Cloud hosting operations to support the strong growth of this area of the business. Our hosting team in Gdańsk, Poland has increased from seven employees at 30 June 2026 to ten employees today, providing additional capacity to meet growing customer demand.
Use of Capital
We remain a strongly cash generative business. We have consistently reviewed the use of the capital, and where we have more cash than required to grow the business we have returned this cash to shareholders through the payment of a progressive ordinary dividend and through special dividends and share buybacks. 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. This will enable us to retain optionality over how the capital might be deployed in the future, including considering whether there are any opportunities for small bolt-on M&A. If we conclude that there is no need to retain cash within the business then we will return any excess capital to shareholders. We will continue our policy of paying an ordinary progressive dividend.
Steady market conditions
We have seen over the last few years that the asset finance market and demand for software within it has remained robust despite a difficult and at times volatile macroeconomic environment.
We continue to see new prospects added into the early stage pipeline, and so the underlying demand for modern, scalable asset finance software remains robust. We have however seen some delays in projects getting through contracting.
Enterprise sales has always had long sales cycles, and for each prospect where we have seen delays in contracting we can see customer specific issues that seem unrelated to the wider market uncertainties. 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. Whilst we believe new prospects will continue to come to market, we think the more likely possible impact from the macro environment is on discretionary spend for already live customers. Once live, Alfa customers often want to continue to enhance and develop the solution, however if budgets were tight this spend could be deferred, so we continue to monitor this area.
The market itself is relatively robust and our software once installed with customers is even more resilient to changes as it is mission critical for our customers' businesses and is in effect heart and lungs software and so cannot be easily replaced.
Strong pipeline
We started the year with ten prospects in the late stage pipeline. In the first half year we had two wins, one loss and two additions to end with nine prospects. We are the preferred supplier with eight of these and have started working under letters of engagement with three. We remain encouraged by the strength of the late stage pipeline.
The first win was for the Canadian operations for a global OEM. This is a new implementation and includes the retail auto and commercial fleet lease and loan book. We currently have live operations for this global automotive OEM in three other countries and are doing paid work on a new multi-country program in another region. The second win was in the second quarter with a major European automotive manufacturer in the UK. The loss from the late-stage pipeline was an existing v4 customer where revenue will continue until at least the middle of next year while they migrate onto a new system. This was replaced by two additions to the pipeline: an equipment finance implementation at a large US bank, for which we are already implementing the Auto finance book; and a new customer in UK equipment finance.
ESG
We are advancing our ESG goals through a rich programme of awareness campaigns, employee engagement activities and volunteering initiatives. Alfa Communities have collaborated more than ever. We have also continued fundraising efforts for our regional charity partners. Alfa was also recognised as a Monitor 2026 Best Company in the Inclusion category, highlighting the importance we continue to place on diversity, equity and inclusion across the organisation.
FINANCIAL REVIEW
Financial results
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£m |
H1 2026 Unaudited |
H1 2025 Unaudited |
Movement % |
|
Revenue |
65.1 |
62.5 |
4% |
|
Gross profit |
39.2 |
40.1 |
(2)% |
|
Operating profit |
18.4 |
21.6 |
(15)% |
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Operating profit before severance costs and FX hedges |
20.3 |
19.9 |
2% |
|
Profit before tax |
18.2 |
21.5 |
(15)% |
|
Taxation |
(4.7) |
(5.6) |
(15)% |
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Profit for the period |
13.5 |
15.9 |
(15)% |
Revenues increased by 4% or £2.6m to £65.1m in the six months ended 30 June 2026 (H1 2025: £62.5m). On a constant currency basis, revenues were up 5% on last year. There was 6% growth in the Americas, 4% in EMEA and a 5% decline in AsiaPac.
Gross profit decreased to £39.2m (H1 2025: £40.1m), with gross margin reducing to 60.2% (H1 2025: 64.2%) largely due to reduced chargeability of our software engineering resources, along with the impact of £1.2m of severance costs. Operating profit decreased by £3.2m to £18.4m (H1 2025: £21.6m) with profit before tax of £18.2m (H1 2025: £21.5m). If the impact of the total severance costs of £1.6m (£1.2m is in costs of sales and £0.4m is in SG&A) is excluded, along with the impact of FX hedge gains of £1.7m in H1 2025 turning into a loss of £0.3m in H1 2026 then Operating profit increased from £19.9m last year to £20.3m in 2026.
The Effective Tax Rate ("ETR") for the 2026 half year is 26.0% (H1 2025: 26.0%) in line with last year. For the full year 2026 we expect the ETR to be around 26.0% (2025 full year ETR: 24.9%). Profit for the period was £13.5m (H1 2025: £15.9m).
Revenue
|
Revenue - by type |
H1 2026 |
H1 2025 |
Movement |
|
£m |
Unaudited |
Unaudited |
% |
|
Subscription |
24.1 |
21.2 |
14% |
|
Software Engineering |
8.6 |
10.3 |
(17)% |
|
Delivery |
32.4 |
31.0 |
5% |
|
Total revenue |
65.1 |
62.5 |
4% |
Subscription - Continuing strong growth in subscription revenues
Subscription revenues arise from revenues from SaaS and other recurring services
Overall subscription revenues increased strongly by 14% to £24.1m (H1 2025: £21.2m) with growth driven from both new and existing customers. Subscription customers now total 44 (H1 2025: 41), of which 24 are on Alfa Cloud (H1 2025: 23), 15 are on their own private cloud the same as last year and two are on v4 of Alfa. In addition, there are three customers in the late-stage pipeline on Alfa Cloud, up from one the previous year.
We have a single-tenant SaaS solution. We and our customers benefit from a single standard code-set and database, but with multi-layer data segregation as opposed to code-based segregation used in multi-tenant SaaS models. One of the big benefits of this approach is that customers can control their release cycles rather than having a timetable dictated to them. We mitigate the extra cost from this approach by encouraging customers to share branches and release dates.
Our SaaS services are ISO 27001 and ISO 27018 certified and SOC1 and SOC2 audited to confirm compliance with controls around data security and availability. Given the mission-critical nature of our systems to our customers, having such third-party verification of our compliance with these standards is a key selling point.
Software Engineering - Swing to less chargeable development work in H1
Software Engineering revenues largely arise from chargeable development work for new and existing customers, along with a small amount of perpetual licence recognition.
Software Engineering revenue for the period decreased significantly against the high level of H1 2025, down to £8.6m (H1 2025: £10.3m), although the reduction was not as high as we had expected. Enhancement work for existing customers was at a similar level as last year at £4.0m (H1 2025: £4.5m). Last year there was a lot of chargeable work for new customers, whereas this year this has, as expected, dropped down and was £1.8m in the period (H1 2025: £4.5m).
Perpetual licence revenue was up in the period to £2.8m (H1 2025: £1.1m). The last perpetual licence was sold in 2023 and the implementation period came to an end in H1 2026 which resulted in this revenue increase. Going forward there will be a steady decline in perpetual licence revenues which will come to an end in 2031 and will be progressively replaced by the growing subscription revenues from new customers. There were no one-off licence revenues (H1 2025: £0.2m).
Our strategy is to continue to further develop our software, to ensure that we meet and exceed customer and market needs as they evolve and as the regulatory and commercial environment continues to change. We have the industry leading software and we continue to invest to increase that competitive advantage, through a balance of customer-funded and self-funded development.
Delivery - Continuing delivery execution
Delivery revenues arise from work for existing customers delivering new modules, upgrades, migrations and other services, as well as work with new customers on project definition and implementation of Alfa Systems.
We entered the year with a strong late-stage pipeline of which we were working with five. We needed to carry on working with all of these and start working with a number of other prospects in the late stage pipeline in order to deliver our expected revenue performance. In Q2, one of the customers in the late-stage pipeline we were working with decided to pause the project after the definition stage as a result of changed management and internal priorities. We also had some preferred supplier projects push back the start of the projects. Chargeability for our delivery teams was down a little versus our expectations. Delivery revenues were up 5% to £32.4m (H1 2025: £31.0m) at actual exchange rates.
We delivered two customer go-lives and nine customer upgrades in the first six months of the year. We now have just nine customers still on v5, with two on v4 who are upgrading to AS6 and two on v4 not upgrading.
We continue to look for opportunities to use partners to assist in delivering projects and they have been useful in managing the changes in demand we have seen in H1. Partner days accounted for 8% (H1 2025: 7%) of the delivery days in H1 2026. We have made good progress with one of our partners in clarifying how a Partner Led Delivery (PLD) project would run and where responsibilities would lie. Having done the work, we now need to identify the right prospect and put it into action.
Total Contract Value (TCV)
|
TCV - by type |
|
|
|
2026 |
2025 |
2025 |
|
£m |
|
|
|
HY |
FY |
HY |
|
Subscription |
|
|
|
176.0 |
161.5 |
144.8 |
|
Software Engineering |
|
|
|
13.3 |
14.2 |
18.7 |
|
Delivery |
|
|
|
57.7 |
51.8 |
47.2 |
|
Total TCV |
|
|
|
247.0 |
227.5 |
210.7 |
Definition of TCV is included in the definitions section of this Half Year Report
Total contract value (TCV) at 30 June 2026 was £247.0m (31 December 2025: £227.5m, 30 June 2025: £210.7m). We continue to see strong growth in our subscription and delivery TCV, both of which have been boosted by the two contract wins recorded in the first half. Software Engineering TCV is down compared with this time last year, however whilst it is down since year-end we have better visibility of work in the pipeline for the remainder of the year than we had at the start of the year.
Of the TCV at 30 June 2026, £100.6m (H1 2025: £89.9m) is currently anticipated to convert into revenue within the next 12 months. Subscription TCV increased strongly up 22% to £52.9m (H1 2025: £43.5m). The Delivery portion is also up strongly, up 16% at £39.1m (H1 2025: £33.7m). Software Engineering TCV of £8.6m is down on last year (H1 2025: £12.7m), but is up 13% versus Q1 and broadly in line with last year end (31 December 2025: £8.8m).
Operating profit
The Group's operating profit in comparison to a very strong first half last year reduced by £3.2m to £18.4m in H1 2026 (H1 2025: £21.6m), with the reduction in Software Engineering revenues being a significant contributor to this, alongside severance costs and the negative impact of FX from reduction in hedge gains.
Headcount was down 2% at 30 June 2026 at 502 (H1 2025: 512), with average headcount of 521 up 3% on last year (H1 2025: 508). Voluntary staff retention was 96% on a 12 month basis (30 June 2025: 98%).
|
Expenses - net |
H1 2026 |
H1 2025 |
Movement |
|
£m |
Unaudited |
Unaudited |
% |
|
Cost of sales |
25.9 |
22.4 |
16% |
|
Sales, general and administrative expenses |
21.1 |
18.8 |
12% |
|
Other income |
(0.3) |
(0.3) |
- |
|
Total expenses - net |
46.7 |
40.9 |
14% |
Cost of sales increased by £3.5m to £25.9m (H1 2025: £22.4m). The 16% increase was due to severance costs of £1.2m, £1.9m increase in salary costs along with £0.4m increase in hosting from the increasing scale of that business. These costs are net of capitalised intangible costs for internally generated software of £2.7m (H1 2025: £2.5m).
Sales, general and administrative expenses (SG&A) increased to £21.1m in the six-month period to 30 June 2026 (H1 2025: £18.8m). Salary costs were up 6% in the period to £7.9m (2025 H1: £7.5m) along with severance and legal costs of £0.4m. Profit Share Pay, including employer's costs, in the period was £2.1m (2025 H1: £2.6m). Share-based payment charges have decreased over last year by £0.5m to £0.4m (H1 2025: £0.9m), principally due to reassessment of performance outturn. Depreciation and amortisation increased to £2.1m (H1 2025: £1.5m) as a result of the increased capitalised development costs over the last couple of years. Realised and unrealised losses from FX hedges taken out to hedge USD flows were £0.3m (H1 2025: Gain £1.7m). Other transaction FX losses were £0.1m (H1 2025: £0.6m). Other operating costs totalling £7.8m increased £0.4m, or 6%, on last year (H1 2025: £7.4m). Other income of £0.3m was in line with last year (H1 2025: £0.3m).
Profit before tax
Overall profit before tax of £18.2m was down on last year (H1 2025: £21.5m). Net finance costs were £0.2m (H1 2025: £0.1m).
Profit for the period
Profit after taxation decreased by £2.4m to £13.5m (H1 2025: £15.9m). The Effective Tax Rate ("ETR") for the 2026 half year was 26.0% (H1 2025: 26.0%). For the full year 2026 we expect the ETR to be around 26.0% (2025 full year ETR: 24.9%).
Earnings per share
Basic earnings per share decreased by 15% to 4.55 pence (H1 2025: 5.38 pence). Diluted earnings per share decreased by 15% to 4.55 pence (H1 2025: 5.35 pence).
Cash flow
Cash generated from operations decreased to £17.6m (H1 2025: £22.0m) partly as a result of the reduced operating profit but also due to the unwind of the accelerated receipts of £2.8m at the end of 2025. Net cash generated from operating activities was £12.5m (H1 2025: £17.6m) with an increase in tax payments to £4.7m (H1 2025: £4.0m).
Net cash (including the effect of exchange rate changes) decreased by £4.2m to £22.2m at 30 June 2026, from £26.4m at 31 December 2025. We paid £13.7m of dividends in the period in respect of the FY 2025 Final Dividend and a 2026 Special Dividend (H1 2025: £11.2m). Purchases of own shares in the period for the EBT were £0.8m (H1 2025: £0.9m). Net capital expenditure of £3.0m was in line with last year (H1 2025: £2.8m) with capitalisation of software up slightly to £2.7m (H1 2025: £2.5m) and with other capex of £0.3m (H1 2025: £0.3m).
The Group's Operating Free Cash Flow Conversion (FCF) was 76% (H1 2025: 88%), impacted by advanced receipts at the end of 2025. We expect cash conversion for the full year to be in line with previous guidance of 80% - 90%.
Balance sheet
The significant movements in the Group's balance sheet, aside from the cash balance which is described above, from 31 December 2025 to 30 June 2026 are detailed below.
Trade receivables of £7.8m were down on last year end (31 December 2025: £8.5m) although accrued income increased to £8.7m on higher June revenues as compared to last year end (31 December 2025: £5.5m). Corporation tax recoverable of £1.2m (31 December 2025: £0.7m) increased slightly due to RDEC receivables.
Trade and other payables balance decreased by £1.3m to £11.9m at 30 June 2026 (31 December 2025: £13.2m) due to lower payroll related accruals.
Contract liabilities relating to software licences decreased by £3.9m to £5.3m at 30 June 2026 (31 December 2025: £9.2m) as the accounting for the last perpetual licence sold came to the end of its implementation period along with the unwind of the material right on other historic perpetual licences. Contract liabilities from deferred maintenance increased to £9.1m (31 December 2025: £4.7m) reflecting the timing of billing of a number of annual maintenance contracts on 1 May.
Subsequent events
There have been no significant subsequent events.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties facing the Group are set out on pages 37 to 44 of the Annual Report and Accounts for the year ended 31 December 2025, dated 11 March 2026, and remain unchanged at the date of this report.
UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2026
|
£m |
Note |
H1 2026 Unaudited |
H1 2025 Unaudited |
|
Continuing Operations |
|
|
|
|
Revenue |
3 |
65.1 |
62.5 |
|
Cost of sales |
|
(25.9) |
(22.4) |
|
Gross profit |
|
39.2 |
40.1 |
|
Sales, general and administrative expenses |
|
(21.1) |
(18.8) |
|
Other income |
|
0.3 |
0.3 |
|
Operating profit |
4 |
18.4 |
21.6 |
|
Finance income |
|
0.2 |
0.3 |
|
Finance costs |
|
(0.4) |
(0.4) |
|
Profit before taxation |
|
18.2 |
21.5 |
|
Taxation |
6 |
(4.7) |
(5.6) |
|
Profit for the period |
|
13.5 |
15.9 |
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
|
Exchange differences on translation of foreign operations |
|
0.1 |
(0.3) |
|
Other comprehensive income / (loss) net of tax |
|
0.1 |
(0.3) |
|
Total comprehensive income for the period |
|
13.6 |
15.6 |
|
|
|
|
|
|
Earnings per share (in pence) |
|
|
|
|
Basic |
|
4.55 |
5.38 |
|
Diluted |
|
4.55 |
5.35 |
The consolidated statement of profit or loss and comprehensive income should be read in conjunction with the accompanying notes.
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2026
|
£m |
Note |
30 June Unaudited |
31 Dec 2025 Audited |
|
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Goodwill |
7 |
24.7 |
24.7 |
|
Other intangible assets |
8 |
13.9 |
12.5 |
|
Property, plant and equipment |
9 |
0.8 |
0.7 |
|
Right-of-use assets |
10 |
6.5 |
6.7 |
|
Deferred tax assets |
|
0.4 |
0.4 |
|
Total non-current assets |
|
46.3 |
45.0 |
|
Current assets |
|
|
|
|
Trade receivables |
11 |
7.8 |
8.5 |
|
Accrued income |
12 |
8.7 |
5.5 |
|
Prepayments |
12 |
3.9 |
4.4 |
|
Other receivables |
12 |
0.1 |
0.2 |
|
Corporation tax recoverable |
12 |
1.2 |
0.7 |
|
Cash and cash equivalents |
|
22.2 |
26.4 |
|
Total current assets |
|
43.9 |
45.7 |
|
Total assets |
|
90.2 |
90.7 |
|
Liabilities and equity |
|
|
|
|
Current liabilities |
|
|
|
|
Trade payables |
|
0.9 |
0.8 |
|
Other payables |
|
11.0 |
12.4 |
|
Derivative financial instruments |
|
0.1 |
- |
|
Lease liabilities |
13 |
1.3 |
1.2 |
|
Provisions for other liabilities |
|
0.1 |
0.3 |
|
Contract liabilities |
3 |
11.4 |
10.0 |
|
Total current liabilities |
|
24.8 |
24.7 |
|
Non-current liabilities |
|
|
|
|
Lease liabilities |
13 |
7.7 |
8.1 |
|
Provisions for other liabilities |
|
0.5 |
0.6 |
|
Contract liabilities |
3 |
3.0 |
3.9 |
|
Deferred tax liabilities |
|
2.4 |
1.7 |
|
Total non-current liabilities |
|
13.6 |
14.3 |
|
Total liabilities |
|
38.4 |
39.0 |
|
Capital and reserves |
|
|
|
|
Share capital |
|
0.3 |
0.3 |
|
Translation reserve |
|
- |
(0.1) |
|
Own shares |
14 |
(4.1) |
(6.5) |
|
Retained earnings |
|
55.6 |
58.0 |
|
Total equity |
|
51.8 |
51.7 |
|
Total liabilities and equity |
|
90.2 |
90.7 |
The consolidated statement of financial position should be read in conjunction with the accompanying notes. The Dec-25 balance for contract liabilities has been reclassified between current and non-current liabilities, with no change to the total liability previously reported.
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2026
|
£m |
Note |
Share |
Own shares |
Translation reserve |
Retained |
Equity attributable to owners of the parent |
|
|
Balance as at 1 January 2025 |
|
0.3 |
(7.9) |
0.1 |
53.7 |
46.2 |
|
|
Profit for the financial period |
|
- |
- |
- |
15.9 |
15.9 |
|
|
Other comprehensive (loss) |
|
- |
- |
(0.3) |
- |
(0.3) |
|
|
Total comprehensive income for the period |
|
- |
- |
(0.3) |
15.9 |
15.6 |
|
|
Equity-settled share-based payment schemes |
|
- |
- |
- |
0.6 |
0.6 |
|
|
Equity-settled share-based payment schemes - deferred tax impact |
|
- |
- |
- |
0.1 |
0.1 |
|
|
Dividends |
|
- |
- |
- |
(11.2) |
(11.2) |
|
|
Own shares distributed |
14 |
- |
2.2 |
- |
(1.5) |
0.7 |
|
|
Own shares acquired |
14 |
- |
(0.9) |
- |
- |
(0.9) |
|
|
Balance as at 30 June 2025 |
|
0.3 |
(6.6) |
(0.2) |
57.6 |
51.1 |
|
|
|
|
|
|
|
|
|
|
|
Balance as at 1 January 2026 |
|
0.3 |
(6.5) |
(0.1) |
58.0 |
51.7 |
|
|
Profit for the financial period |
|
- |
- |
- |
13.5 |
13.5 |
|
|
Other comprehensive income |
|
- |
- |
0.1 |
- |
0.1 |
|
|
Total comprehensive income for the period |
|
- |
- |
0.1 |
13.5 |
13.6 |
|
|
Equity-settled share-based payment schemes |
|
- |
- |
- |
0.3 |
0.3 |
|
|
Equity-settled share-based payment schemes - deferred tax impact |
|
- |
- |
- |
(0.4) |
(0.4) |
|
|
Dividends |
|
- |
- |
- |
(13.7) |
(13.7) |
|
|
Own shares distributed |
14 |
- |
3.2 |
- |
(2.1) |
1.1 |
|
|
Own shares acquired |
14 |
- |
(0.8) |
- |
- |
(0.8) |
|
|
Balance as at 30 June 2026 |
|
0.3 |
(4.1) |
- |
55.6 |
51.8 |
|
The consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2026
|
£m |
Note |
H1 2026 Unaudited |
H1 2025 Unaudited |
|
Cash flows from operating activities |
|
|
|
|
Profit before tax |
|
18.2 |
21.5 |
|
Net finance costs |
|
0.2 |
0.1 |
|
Operating profit |
|
18.4 |
21.6 |
|
Adjustments: |
|
|
|
|
Depreciation |
9/10 |
0.7 |
0.8 |
|
Amortisation |
8 |
1.3 |
0.7 |
|
Share-based payment charge |
|
0.3 |
0.6 |
|
Research and Development Expenditure (Credit) |
|
(0.2) |
(0.3) |
|
Unrealised fair value loss/(gain) on derivatives |
|
0.1 |
(1.2) |
|
(Decrease) in provisions |
|
(0.3) |
(0.1) |
|
Movement in working capital: |
|
|
|
|
Increase in contract liabilities |
|
0.5 |
2.7 |
|
(Increase) in trade and other receivables |
|
(1.9) |
(2.2) |
|
(Decrease) in trade and other payables (excluding contract liabilities) |
|
(1.3) |
(0.6) |
|
Cash generated from operations |
|
17.6 |
22.0 |
|
Interest element on lease payments |
|
(0.3) |
(0.4) |
|
Other interest paid |
|
(0.1) |
- |
|
Income taxes paid |
|
(4.7) |
(4.0) |
|
Net cash generated from operating activities |
|
12.5 |
17.6 |
|
Cash flows from investing activities |
|
|
|
|
Payments for purchases of property, plant and equipment |
9 |
(0.3) |
(0.3) |
|
Payments for internally developed software |
8 |
(2.7) |
(2.5) |
|
Interest received |
|
0.2 |
0.3 |
|
Net cash outflow from investing activities |
|
(2.8) |
(2.5) |
|
Cash flows from financing activities |
|
|
|
|
Dividends paid to Company shareholders |
17 |
(13.7) |
(11.2) |
|
Payment of lease liabilities (principal) |
13 |
(0.6) |
(0.2) |
|
Purchase of own shares |
14 |
(0.8) |
(0.9) |
|
Sale of own shares |
|
0.9 |
0.5 |
|
Net cash used in financing activities |
|
(14.2) |
(11.8) |
|
Net (decrease)/increase in cash and cash equivalents |
|
(4.5) |
3.3 |
|
Cash and cash equivalents at the beginning of the period |
|
26.4 |
20.5 |
|
Effect of foreign exchange rate changes on cash and cash equivalents |
|
0.3 |
0.1 |
|
Cash and cash equivalents at the end of the period |
|
22.2 |
23.9 |
The consolidated cash flow statement should be read in conjunction with the accompanying notes.
Notes to the Condensed Consolidated Half Year Financial Statements for the six months ended 30 June 2026
1. General information
Alfa Financial Software Holdings PLC ("Alfa" or the "Company") is a public company limited by shares and is incorporated and domiciled in England. Its registered office is at Moor Place, 1 Fore Street Avenue, London, EC2Y 9DT, United Kingdom. Alfa's company registration number is 10713517.
The principal activity of the Group is to develop, implement and support software and SaaS solutions to the auto and equipment finance industry in the United Kingdom, Europe, Africa, Americas, and Australasia.
These Half Year Financial Statements have been approved for issue by the Board of Directors on 2 September 2026. These Half Year Financial Statements have been reviewed but not audited.
2. Accounting policies
2(a) Basis of preparation
The Half Year Financial Statements have been prepared in accordance with IAS 34 "Half Year Financial Reporting" as contained in UK-adopted International Accounting Standards and the Disclosure and Transparency Rules of the Financial Conduct Authority.
These Half Year Financial Statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Accordingly, this report should be read in conjunction with the annual report for the year ended 31 December 2025 (the "Annual Financial Statements") which was prepared in accordance with UK-adopted International Accounting Standards and any public announcements made by Alfa during the Half Year reporting period. The Annual Financial Statements constitute statutory accounts as defined in section 434 of the Companies Act 2006 and a copy of these statutory accounts has been delivered to the Registrar of Companies. The auditor's report on the Annual Financial Statements was not qualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
The accounting policies adopted in the preparation of the Half Year Financial Statements are consistent with those used to prepare Alfa's consolidated financial statements for the year ended 31 December 2025 and the corresponding Half Year reporting period.
The preparation of the Half Year Financial Statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these Half Year Financial Statements, the significant judgements made by management in applying the Group's accounting policies were the same as those that applied to the consolidated Annual Financial Statements described above.
The Half Year Financial Statements have been prepared on a going concern basis, under the historical cost convention.
2(b) Going concern
The Half Year Financial Statements are prepared on the going concern basis. The Group continues to be cash-generative and the Directors believe that the Group has a resilient business model. The Group meets its day-to-day working capital requirements through its cash reserves generated from operating activities. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group has sufficient cash reserves to operate for a period of not less than 12 months from the date of approval of these Half Year Financial Statements.
The going concern assessment performed also includes downside stress testing in line with FRC guidance which demonstrates that even in the most extreme downside conditions considered reasonably possible, given the existing level of cash held, the Group would continue to be able to meet its obligations as they fall due.
On this basis, the Directors consider it appropriate to continue to adopt the going concern basis of accounting in preparing the Half Year Financial Statements.
2(c) Changes in accounting policies
The Group has not adopted any new accounting standards in the period. Other changes to accounting standards in the period had no material impact.
2(d) Seasonality
The Group is not normally significantly influenced by seasonality or cyclical fluctuation because the Group's revenues are relatively consistent throughout the year. The Group's revenue is influenced by the number and maturity of software implementations during the period. Separately, the Group's cash flows are subject to seasonal fluctuations because the Group invoices a proportion of its customers for maintenance annually in advance in the first six months of each year, resulting in a higher inflow of cash receipts in the first half of the Group's financial year in respect of maintenance revenues.
2(e) Financial derivatives
The Group enters into derivative financial instruments (forward contracts) to hedge against foreign currency exposure. These instruments are initially recognised at fair value and are subsequently measured at fair value at each reporting date. The carrying value of the derivative financial instruments therefore equals their fair value. Fair values are determined with reference to observable market inputs, including spot and forward foreign exchange rates as at the reporting date. Accordingly, these instruments are classified as Level 2 in the fair value hierarchy under IFRS 13 Fair Value Measurement.
2(f) Foreign currency
The following exchange rates were used in the financial statements:
|
|
|
|
|
USD |
EUR |
AUD |
NZD |
|
|||
|
|
Average rate 6 months to: |
|
|
|
|
|
|
||||
|
|
|
30 June 2026 |
|
1.35 |
1.15 |
1.92 |
2.29 |
|
|||
|
|
|
30 June 2025 |
|
1.30 |
1.19 |
2.05 |
2.25 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
Closing rate: |
|
|
|
|
|
|
|
|||
|
|
|
30 June 2026 |
|
1.33 |
1.16 |
1.92 |
2.33 |
|
|||
|
|
|
31 Dec 2025 |
|
1.35 |
1.15 |
2.02 |
2.34 |
|
|||
3. Segment information and revenue from contracts with customers
3(a) Revenue by stream
The Group assesses revenue by type of activity, being Subscription, Software Engineering and Delivery, as summarised below:
|
£m |
H1 2026 Unaudited |
H1 2025 Unaudited |
|
Subscription |
24.1 |
21.2 |
|
Software Engineering |
8.6 |
10.3 |
|
Delivery |
32.4 |
31.0 |
|
Total revenue |
65.1 |
62.5 |
3(b) Revenue by geography
Revenue attributable to each geographical market based on where the customer mainly utilises its instance of Alfa, or where the service is rendered, is as follows:
|
£m |
H1 2026 Unaudited |
H1 2025 Unaudited |
|
EMEA |
32.3 |
31.2 |
|
Americas |
29.0 |
27.2 |
|
Rest of the World |
3.8 |
4.1 |
|
Total revenue |
65.1 |
62.5 |
Revenue attributable to the UK is £19.1m (H1 2025: £16.9m) and this is included within the EMEA revenue.
3(c) Revenue by currency
Revenue by contractual currency is as follows:
|
£m |
H1 2026 Unaudited |
H1 2025 Unaudited |
|
GBP |
22.3 |
23.1 |
|
USD |
28.8 |
27.1 |
|
EUR |
9.7 |
8.3 |
|
Other |
4.3 |
4.0 |
|
Total revenue |
65.1 |
62.5 |
3(d) Liabilities from contracts with customers
|
£m |
H1 2026 Unaudited |
FY 2025 Audited |
|
Contract liabilities - deferred licence and fees |
5.3 |
9.2 |
|
Contract liabilities - deferred maintenance |
9.1 |
4.7 |
|
Total contract liabilities |
14.4 |
13.9 |
3(e) Timing of revenue
Timing of revenue - the Group derives revenue from the transfer of goods and services as follows over time and at a point in time in the following revenue streams:
|
H1 2026 - £m Unaudited |
Subscription |
Software Engineering |
Delivery |
Total revenue |
|
At a point in time - time and materials |
- |
3.9 |
18.1 |
22.0 |
|
At a point in time - fixed price |
- |
0.1 |
- |
0.1 |
|
Over time - time and materials |
- |
3.9 |
13.7 |
17.6 |
|
Over time - fixed price |
24.1 |
0.7 |
0.6 |
25.4 |
|
Total revenue |
24.1 |
8.6 |
32.4 |
65.1 |
|
H1 2025 - £m Unaudited |
Subscription |
Software Engineering |
Delivery |
Total revenue |
|
At a point in time - time and materials |
- |
4.6 |
19.7 |
24.3 |
|
At a point in time - fixed price |
0.1 |
0.3 |
- |
0.4 |
|
Over time - time and materials |
- |
4.8 |
11.1 |
15.9 |
|
Over time - fixed price |
21.1 |
0.6 |
0.2 |
21.9 |
|
Total revenue |
21.2 |
10.3 |
31.0 |
62.5 |
4. Operating profit
The following items have been included in arriving at operating profit in the table below:
|
£m
|
|
|
|
£m |
H1 2026 Unaudited |
H1 2025 Unaudited |
|
Research and development costs |
1.5 |
1.5 |
|
Depreciation of property, plant and equipment |
0.2 |
0.3 |
|
Depreciation of right-of-use lease assets |
0.5 |
0.5 |
|
Amortisation of intangible assets |
1.3 |
0.7 |
|
Foreign exchange loss |
0.1 |
0.6 |
|
Realised and unrealised net loss/(gain) on forward contracts |
0.3 |
(1.7) |
|
Share-based payments (including social security contributions) |
0.4 |
0.9 |
|
Severance costs (including legal fees) |
1.6 |
- |
5. Employee costs
|
£m |
H1 2026 Unaudited |
H1 2025 Unaudited |
|
Wages and salaries |
26.6 |
25.1 |
|
Social security contributions (on wages and salaries) |
3.2 |
2.6 |
|
Pension costs |
2.2 |
2.0 |
|
Profit share pay* |
2.1 |
2.6 |
|
Share-based payments (including social security contributions) |
0.4 |
0.9 |
|
Severance costs |
1.4 |
- |
|
Gross employee costs |
35.9 |
33.2 |
|
Less: capitalisation |
(2.7) |
(2.5) |
|
Employee costs recognised in profit or loss |
33.2 |
30.7 |
|
|
|
|
* Profit share pay refers to a pool of money (that equates to approximately 10% of the Group's pre-tax profits before charging profit share) which is shared amongst the employees, excluding Directors and some other senior managers, as a percentage of basic salary. The amount disclosed includes the related social security contributions.
|
Average monthly number of people employed (including Directors) |
H1 2026 Unaudited |
H1 2025 Unaudited |
|
EMEA |
365 |
366 |
|
Americas |
128 |
112 |
|
Rest of the World |
28 |
30 |
|
Total average monthly number of people employed |
521 |
508 |
At 30 June 2026 the Group had 502 employees (30 June 2025: 512).
6. Income tax expense
Income tax expense is calculated on management's best estimate of the full financial year expected rate, which is then adjusted for discrete items occurring in the reporting period.
The income tax expense for the six-month period ended 30 June 2026 was £4.7m (H1 2025: £5.6m).
The Effective Tax Rate ("ETR") for the 2026 half year is 26.0% (H1 2025: 26.0%).
For the full year 2026 the ETR is forecast to be around 26.0% (2025 full year ETR: 24.9%), above the UK statutory tax rate of 25% (2025: 25%), reflecting increased activities outside the UK subject to higher rates of tax.
7. Goodwill
|
|
H1 2026 Unaudited |
FY 2025 Audited |
|
£m |
||
|
Cost |
|
|
|
At 1 January |
24.7 |
24.7 |
|
At 30 June / 31 December |
24.7 |
24.7 |
Goodwill arose on the acquisition of subsidiaries in 2012 and represents the excess of the consideration transferred over the fair value of the identifiable assets acquired and the liabilities and contingent liabilities assumed.
Management assessed whether any indicators of impairment of goodwill existed at 30 June 2026. In reaching its conclusion, consideration was given to the Group's strong trading performance during the period and the fact that the Company's market capitalisation remained significantly in excess of its net asset value. No indicators of impairment were identified and, accordingly, no detailed impairment assessment was required at the interim reporting date.
8. Other intangible assets
|
£m |
Computer software |
Internally generated software |
Total |
|
Cost |
|
|
|
|
At 1 January 2025 |
1.0 |
12.4 |
13.4 |
|
Additions |
- |
5.0 |
5.0 |
|
At 31 December 2025 |
1.0 |
17.4 |
18.4 |
|
Amortisation |
|
|
|
|
At 1 January 2025 |
0.6 |
3.5 |
4.1 |
|
Charge for the period |
0.1 |
1.7 |
1.8 |
|
At 31 December 2025 |
0.7 |
5.2 |
5.9 |
|
Net book value |
|
|
|
|
At 31 December 2025 |
0.3 |
12.2 |
12.5 |
|
Cost |
|
|
|
|
At 1 January 2026 |
1.0 |
17.4 |
18.4 |
|
Additions |
- |
2.7 |
2.7 |
|
At 30 June 2026 |
1.0 |
20.1 |
21.1 |
|
Amortisation |
|
|
|
|
At 1 January 2026 |
0.7 |
5.2 |
5.9 |
|
Charge for the period |
0.1 |
1.2 |
1.3 |
|
At 30 June 2026 |
0.8 |
6.4 |
7.2 |
|
Net book value |
|
|
|
|
At 30 June 2026 |
0.2 |
13.7 |
13.9 |
Significant movement in other intangible assets
During H1 2026, Alfa developed new internally generated software at a cost of £2.7m (H1 2025: £2.5m). This software will be amortised over three to five years. The 30 June 2026 information is unaudited and the comparative 31 December 2025 information is audited.
9. Property, plant and equipment
|
£m |
Fixtures and fittings |
IT equipment |
Total |
|
Cost |
|
|
|
|
At 1 January 2025 |
1.5 |
1.8 |
3.3 |
|
Additions |
- |
0.4 |
0.4 |
|
Disposals |
- |
(0.4) |
(0.4) |
|
At 31 December 2025 |
1.5 |
1.8 |
3.3 |
|
Depreciation |
|
|
|
|
At 1 January 2025 |
1.2 |
1.4 |
2.6 |
|
Charge for the period |
0.1 |
0.3 |
0.4 |
|
Disposals |
- |
(0.4) |
(0.4) |
|
At 31 December 2025 |
1.3 |
1.3 |
2.6 |
|
Net book value |
|
|
|
|
At 31 December 2025 |
0.2 |
0.5 |
0.7 |
|
Cost |
|
|
|
|
At 1 January 2026 |
1.5 |
1.8 |
3.3 |
|
Additions |
- |
0.3 |
0.3 |
|
At 30 June 2026 |
1.5 |
2.1 |
3.6 |
|
Depreciation |
|
|
|
|
At 1 January 2026 |
1.3 |
1.3 |
2.6 |
|
Charge for the period |
- |
0.2 |
0.2 |
|
At 30 June 2026 |
1.3 |
1.5 |
2.8 |
|
Net book value |
|
|
|
|
At 30 June 2026 |
0.2 |
0.6 |
0.8 |
The 30 June 2026 information is unaudited and the comparative 31 December 2025 information is audited.
10. Right-of-use assets
|
£m |
Motor vehicles |
Property |
Total |
|
Cost |
|
|
|
|
At 1 January 2025 |
0.7 |
13.3 |
14.0 |
|
Additions |
0.1 |
- |
0.1 |
|
Disposals |
(0.1) |
(0.3) |
(0.4) |
|
At 31 December 2025 |
0.7 |
13.0 |
13.7 |
|
Depreciation |
|
|
|
|
At 1 January 2025 |
0.3 |
6.0 |
6.3 |
|
Charge for the period |
0.2 |
0.9 |
1.1 |
|
Disposals |
(0.1) |
(0.3) |
(0.4) |
|
At 31 December 2025 |
0.4 |
6.6 |
7.0 |
|
Net book value |
|
|
|
|
At 31 December 2025 |
0.3 |
6.4 |
6.7 |
|
Cost |
|
|
|
|
At 1 January 2026 |
0.7 |
13.0 |
13.7 |
|
Additions |
0.3 |
- |
0.3 |
|
At 30 June 2026 |
1.0 |
13.0 |
14.0 |
|
Depreciation |
|
|
|
|
At 1 January 2026 |
0.4 |
6.6 |
7.0 |
|
Charge for the period |
0.1 |
0.4 |
0.5 |
|
At 30 June 2026 |
0.5 |
7.0 |
7.5 |
|
Net book value |
|
|
|
|
At 30 June 2026 |
0.5 |
6.0 |
6.5 |
The 30 June 2026 information is unaudited and the comparative 31 December 2025 information is audited.
11. Trade receivables
The Group holds the following trade receivables:
|
£m |
|
H1 2026 Unaudited |
FY 2025 Audited |
|
Trade receivables |
|
7.8 |
8.5 |
|
Provision for impairment |
|
- |
- |
|
Total trade receivables - net |
|
7.8 |
8.5 |
Trade receivables ageing
|
Ageing of net trade receivables £m |
H1 2026 Unaudited |
FY 2025 Audited |
|
Within agreed terms |
7.4 |
7.8 |
|
Past due 1-30 days |
0.4 |
0.7 |
|
Trade receivables - net |
7.8 |
8.5 |
The Group believes that the unimpaired amounts that are past due are fully recoverable as there are no indicators of future delinquency or potential litigation.
12. Other receivables
|
£m |
H1 2026 Unaudited |
FY 2025 Audited |
|
Accrued income |
8.7 |
5.5 |
|
Prepayments |
3.9 |
4.4 |
|
Corporation tax recoverable |
1.2 |
0.7 |
|
Other receivables |
0.1 |
0.2 |
|
Total other receivables |
13.9 |
10.8 |
Accrued income represents fees earned, but not invoiced, at the reporting date, which have no right of offset with contract liabilities - deferred licence amounts. Accrued income increased by £3.2m since last year-end driven by increased revenues and invoice timing.
Prepayments include £0.6m (FY 2025: £0.7m) of deferred costs in relation to costs to fulfil contracts and £0.3m (2025: £0.3m) of deferred costs in relation to costs to obtain contracts.
During the period £0.1m (HY 2025: £0.2m) relating to costs to fulfil contracts has been recognised within cost of sales and £0.1m (HY 2025: £nil) in relation to costs to obtain contracts has been recognised within sales, general and administrative expenses.
13. Lease liabilities
The following table sets out the reconciliation of the lease liabilities from 1 January 2025 to the amount disclosed at 30 June 2026:
|
£m |
|
|
Total |
|
Lease liabilities recognised at 1 January 2025 |
|
|
9.3 |
|
Additions |
|
|
0.1 |
|
Interest charge |
|
|
0.7 |
|
Payments made on lease liabilities |
|
|
(0.8) |
|
At 31 December 2025 |
|
|
9.3 |
|
Additions |
|
|
0.3 |
|
Interest charge |
|
|
0.3 |
|
Payments made on lease liabilities |
|
|
(0.9) |
|
At 30 June 2026 |
|
|
9.0 |
The 30 June 2026 information is unaudited and the comparative 31 December 2025 information is audited.
Additions to lease liabilities include extensions to existing lease agreements.
Below is the summary of timing of the lease payments:
|
£m |
|
H1 2026 Unaudited |
FY 2025 Audited |
|
Non-current liability |
|
7.7 |
8.1 |
|
Current liability |
|
1.3 |
1.2 |
|
|
|
9.0 |
9.3 |
Below is the maturity analysis of the lease liabilities:
|
£m |
|
H1 2026 Unaudited |
FY 2025 Audited |
|
No later than 1 year |
|
1.9 |
1.8 |
|
Between 1 year and 5 years |
|
4.9 |
5.2 |
|
Later than 5 years |
|
5.2 |
5.7 |
|
Total future lease payments |
|
12.0 |
12.7 |
|
Total future interest payments |
|
(3.0) |
(3.4) |
|
|
|
9.0 |
9.3 |
The movement in lease liabilities is set out above and represents the only movement in liabilities arising from financing activities during the period. The related cash flows are presented in the cash flow statement.
14. Own shares
|
£m |
|
H1 2026 Unaudited |
FY 2025 Audited |
|
Balance at 1 January |
|
6.5 |
7.9 |
|
Acquired in the period |
|
0.8 |
0.9 |
|
Distributed on exercise of options |
|
(3.2) |
(2.3) |
|
Balance at 30 June / 31 December |
|
4.1 |
6.5 |
The own shares reserve represents the cost of shares in Alfa Financial Software Holdings PLC that have been:
- Purchased in the market and held by the Group's employee benefit trust to satisfy options under the Group's share options plans. The number of shares held at 30 June 2026 was 1,050,055 (31 December 2025: 539,667); and
- Purchased in the market and held by the Group as a result of the share buyback programme that was launched on 18 January 2022 and ended on 30 June 2023. The number of shares held at 30 June 2026 was 1,429,656 (31 December 2025: 3,369,802). The movement in the period relates to the satisfying of options under the Group's share options plans.
Own shares distributed relate to shares issued to employees on exercise of share options and for bonus awards deferred in shares.
15. Financial and liquidity risk management
The Group's activities expose it to a variety of financial risks: market risk (including currency risk), credit risk and liquidity risk. The Half Year Financial Statements do not include all financial risk management information and disclosures required in the Annual Financial Statements; they should be read in conjunction with the Annual Financial Statements. The responsibility for risk management has remained with the Board and there have been no changes to risk management policies since year-end.
16. Controlling party and related party transactions
The ultimate parent undertaking as at 30 June 2026 and 31 December 2025 was CHP Software and Consulting Holdings Limited (the 'ultimate parent'), being the parent undertaking of the smallest and largest group in relation to these consolidated financial statements. The ultimate controlling party is Andrew Page. There was no trading between the Group and the Parent in H1 2026 or H1 2025.
Dividends to the amount of £7.4m were paid to the ultimate parent in H1 2026 (H1 2025: £6.1m).
At 30 June 2026 there was £nil balances outstanding from, or to, the ultimate parent (30 June 2025: £nil).
17. Dividends
A special dividend of 3.1 pence per share, equating to £9.2m, was paid on 29 May 2026 with a record date of 1 May 2026. An ordinary dividend of 1.5 pence per share for the year ended 31 December 2025 equating to £4.5m was paid on 26 June 2026, with a record date of 29 May 2026.
18. Subsequent events
There have been no reportable subsequent events.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors confirm that these condensed consolidated Half Year financial statements (the 'Half Year Financial Statements') have been prepared in accordance with International Accounting Standard 34, 'Half Year Financial Reporting', as contained in UK-adopted international accounting standards and that the Half Year management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
• an indication of important events that have occurred during the first six months and their impact on the condensed Half Year Financial Statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
• material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.
The current directors are listed below all of whom were directors during the whole of the period:
Andrew Page
Andrew Denton
Duncan Magrath
Matthew White
Steve Breach
Charlotte de Metz
Peter George (appointed 1 January 2026)
Reena Raichura
Chris Sullivan
Adrian Chamberlain served as a director throughout the period ended 30 June 2026 and stepped down from the Board on 10 August 2026.
By order of the Board
Duncan Magrath
Chief Financial Officer
2 September 2026
INDEPENDENT REVIEW REPORT TO ALFA FINANCIAL SOFTWARE HOLDINGS PLC
Conclusion
We have been engaged by Alfa Financial Software Holdings PLC ('the Company') to review the condensed set of financial statements of the Company and its subsidiaries (the 'Group') in the half-yearly financial report for the six months ended 30 June 2026 which comprises the consolidated statement of profit or loss and comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated statement of cash flows and related notes 1 to 18. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent material misstatements of fact or material inconsistencies with the information in the condensed set of financial statements.
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2026 is not prepared, in all material respects, in accordance with International Accounting Standard 34, "Interim Financial Reporting" as contained in UK-adopted International Accounting Standards, and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" ('ISRE (UK) 2410') issued for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with UK-adopted International Accounting Standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as contained in UK-adopted International Accounting Standards.
Conclusions Relating to Going Concern
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410, however future events or conditions may cause the Group and the Company to cease to continue as a going concern.
Responsibilities of Directors
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with International Accounting Standard 34, "Interim Financial Reporting" as contained in UK-adopted International Accounting Standards and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible for assessing the Group's and the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Review of the Financial Information
In reviewing the half-yearly financial report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.
Use of our report
This report is made solely to the Company in accordance with International Standard on Review Engagements (UK) 2410 "Review of Interim Financial Information performed by the Independent Auditor of the Entity". Our review work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.
RSM UK Audit LLP
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
2 September 2026
DEFINITIONS
Constant currency
When the Group believes it would be helpful for understanding trends in its business, the Group provides percentage increases or decreases in its revenues to eliminate the effect of changes in currency values. When trend information is expressed herein "in constant currencies", the comparative results are derived by re-calculating comparative non-GBP denominated revenues using the average exchange rates of the comparable months in the current reporting period.
Operating free cash flow (FCF) conversion
Operating FCF conversion is calculated as cash from operations, less capital expenditures and the principal element of lease payments, as a percentage of operating profit. Operating FCF is calculated as follows:
|
|
H1 2026 |
H1 2025 |
|
Unaudited |
£m |
£m |
|
Cash generated from operations |
17.6 |
22.0 |
|
Capital expenditure |
(3.0) |
(2.8) |
|
Principal element of lease payments |
(0.6) |
(0.2) |
|
Operating FCF generated |
14.0 |
19.0 |
|
Operating FCF Conversion |
76% |
88% |
Total contract value (TCV)
Total contract value ("TCV") - TCV is calculated by analysing future contract revenue based on the following components:
(i) an assumption of three years of Subscription payments (including maintenance, Cloud Hosting and subscription licence) assuming these services continued as planned (actual contract length varies by customer);
(ii) the estimated remaining time to complete Delivery and Software Engineering deliverables within contracted software implementations, and recognise deferred licence amounts (which may not all be under a signed statement of work); and
(iii) Pre-implementation and ongoing Delivery and Software Engineering work which is contracted under a statement of work.
As TCV is a reflection of future revenues, forward looking exchange rates are used for the conversion into GBP. The exchange rates used for the TCV calculation are as follows:
|
Exchange rates used for TCV |
H1 2026 |
H2 2025 |
H1 2025 |
|
USD |
1.33 |
1.32 |
1.35 |
|
EUR |
1.16 |
1.17 |
1.19 |
Investment in software
This represents the cost of time invested into developing and enhancing the software, including on specific customer developments that are largely chargeable. It is calculated by multiplying the time spent by a day rate which is based on salary costs (varying by seniority) plus a flat overhead allocation. This is the same metric that was previously disclosed as 'Investment in product' and the name was changed to better reflect the nature of the cost.
Annual Recurring Revenue (ARR)*
Represents the average value of customer subscription contracts in the six months to the reporting date, annualised.
Excludes any revenues that are one-time or, at contract inception, not expected to be recurring for a period more than 12 months.
Net Revenue Retention % (NRR)*
Measures the percentage of recurring revenue retained from customers over the last 12 months, including upsells and expansions, and net of customer losses.
* These measures have been included to reflect the increased importance of subscription revenues to the Group.
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