Alfa Financial Software Holdings (ALFA)

Sector:

IT Services

Index:

FTSE Small Cap

86.90p
   
  • Change Today:
    -0.100p
  • 52 Week High: 167.00
  • 52 Week Low: 73.60
  • Currency: UK Pounds
  • Shares Issued: 300.00m
  • Volume: 67,285
  • Market Cap: £260.70m
  • RiskGrade: 293
  • Beta: 0.46

Berenberg upgrades Alfa Financial following 'difficult year'

By Iain Gilbert

Date: Wednesday 12 Dec 2018

LONDON (ShareCast) - (Sharecast News) - Analysts at Berenberg upgraded software outfit Alfa Financial to 'hold' on Wednesday, noting that after a "disappointing year", the risks to the firm's profit and loss was being priced-in as a result of its recent share price weakness.
Over the past year, Berenberg had cut its estimates for Alfa "by as much as 55%" as a result of customer delays and cancelled contracts, but changed its tune somewhat on Wednesday.

"While we still think there is some risk to 2019 guidance as highlighted in our previous note when we downgraded to 'sell' in September, we cannot ignore that the shares have fallen a further 25% since this time," said Berenberg.

"With the company still cash generative and boasting an almost £40m cash pile, we feel the P&L risk is being priced in."

However, the German broker highlighted how there were still risks to the firm's guidance in the form of lower-than-expected revenues going forward.

Berenberg expects Alfa to record £72m in revenues next year, in line with management guidance, but with £55m coming from contracted revenue, the group must deliver £17m worth of incremental revenue from a mixture of new software implementation contracts and increased revenues from its ongoing development and services and maintenance divisions.

"Our issue, however, has been that with fewer customers finishing implementations in 2018 so far, we struggle to see how the other two business segments grow."

In our view, this leaves the majority of the sales gap to be filled through new implementation customers, of which there are approximately five in the company's pipeline."

On the other hand, Berenberg, which reiterated its 115p target price on the firm, said Alfa's light capital structure and simple cash flow meant it could generate a ROIC upward of 100%, despite its difficulties.

"With close to £40m cash on its balance sheet, no M&A ambitions and no dividend policy in place, we believe the company could look to reinvigorate some investor interest through capital returns."

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

ALFA Market Data

Currency UK Pounds
Share Price 86.90p
Change Today -0.100p
% Change -0.11 %
52 Week High 167.00
52 Week Low 73.60
Volume 67,285
Shares Issued 300.00m
Market Cap £260.70m
Beta 0.46
RiskGrade 293

ALFA Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
34.6% below the market average34.6% below the market average34.6% below the market average34.6% below the market average34.6% below the market average
36.73% above the sector average36.73% above the sector average36.73% above the sector average36.73% above the sector average36.73% above the sector average
Price Trend
78.96% below the market average78.96% below the market average78.96% below the market average78.96% below the market average78.96% below the market average
71.7% below the sector average71.7% below the sector average71.7% below the sector average71.7% below the sector average71.7% below the sector average
Income Not Available
Growth
66.46% below the market average66.46% below the market average66.46% below the market average66.46% below the market average66.46% below the market average
80.2% below the sector average80.2% below the sector average80.2% below the sector average80.2% below the sector average80.2% below the sector average

What The Brokers Say

Strong Buy 3
Buy 0
Neutral 2
Sell 0
Strong Sell 0
Total 5
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

ALFA Dividends

No dividends found

Trades for 18-Nov-2019

Time Volume / Share Price
16:35 2,592 @ 86.90p
16:29 314 @ 86.90p
15:42 10 @ 87.10p
15:39 59 @ 87.10p
15:39 78 @ 87.10p

ALFA Key Personnel

CEO Andrew Denton
COO Matthew White

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