The value of software company Alfa fell by around a fifth following an update on trading, ahead of its interim results to be released next Thursday.
Revenues for the half-year are expected to be approximately £31m (2018: H1 £32.9m) with operating profit of approximately £5m (2018: H1 £8.6m).
According to the company statement, the profits warning is reflecting delays in the implementation of particular projects, a reduction in customer spend on optional upgrades, and non-critical work driven by broader uncertainties in the wider economy.
As a result, Alfa’s board expects its full-year profit for 2019 to be significantly below its previous expectations.
Baseline revenue for the full year is projected to be in the region of £63m-£65m, based on existing customer agreements and assuming that the challenging market conditions that prevailed in the first half of the year continue.
This range does not include potential revenue upside of up to approximately £4m, partly relating to finalising new licence agreements and partly relating to finalising licence and maintenance settlement arrangements with an existing customer.
In the statement Alfa also asserted that they were continuing to generate significant levels of cash in H1, ending H1 with net cash of £53.3m (2018: H1 £44.9m). Economic uncertainty was also expected to affect company performance going into 2020, though this was not directly related to Brexit in the statement.
Alfa will announce its interim results for the period ended 30 June 2019 on Thursday 26 September. A presentation will be held for analysts on the day of the results.
Andrew Denton, co-founder of The Leasing Foundation and chief executive officer of Alfa Financial Software, became chairman of the board in May replacing Carol Roberts who will instead focus on diversity and inclusion. The Leasing Foundation is a non-profit organisation that organises seminars and events encouraging engagement with and publicity for the leasing industry.