Alfa Financial Software’s shares are trading up 4% t0 148.8p on Wednesday morning after the company said revenues increased 5% in 2021, helped by a growing customer base.
Revenue increased by 5% from £78.9m in 2020 to £83.2m in 2021.
Subscription revenues increased by 30% to £23.5m. Increased revenues are a reflection of rise in customer base. Under the subscription services, Alfa increased clients from 10 to 12 in 2021 through cloud hosting services of the company.
Customers numbers for their ongoing maintenance contracts increased by 2 to 29.
In terms of their software division, Alfa launched a new user interface (UI) last year which is now delivering results with the use of collections and curtailments feature developed with the help of eight clients and Alfa’s UI methods.
The revenue from the software division reduced by 32% to £13.6m because of license income being impacted.
The services division contributed the highest to revenues with £46.1m with increased exposure to partner resources, and the group had partners working with them for 7 customers, up from 4 in 2020.
Alfa iQ is actively recruiting for the joint venture of Alfa and Bitfount. Alfa iQ received ISO 27001 certification.
Operating profits rose 3% to £24.7m in 2021. The operating profits were up £0.8m with an increase of £4.3m in revenues. However, the operating profits were reduced by a £3.5m rise in expenses.
The growth in expenses was due to pay rises and hirings, which resulted in salary costs to increase by £1.8m. Hosting costs and computer costs both increased by £0.8m which also contributed to the total rise in expenses.
Pretax profit saw a 3% rise to £23.8m. Alfa’s balance sheet reflects no debt and cash of £23m.
Andrew Denton, Chief Executive Officer said, “we started 2021 with a strong financial and delivery performance and maintained this through the whole of the year. The market opportunity for Alfa is very exciting.”
“We have good visibility of work for 2022, and assuming we continue our excellent recent record of attracting and retaining talent, we will see good revenue growth in 2022, albeit with some additional margin pressure due to salary inflation and return to normal costs. With the improving quality of our revenue mix, the strategic improvements made across the business, the quality of our people and strength of the intellectual property in our software, we have great confidence in Alfa’s prospects.”
the total dividend for 2021 is 26p including an ordinary dividend of 1.1p and a special dividend of 10p.