26th Feb 2021 10:12
(Alliance News) - Alfa Financial Software Holdings PLC on Friday said it expects revenue recognition from a recently won contract to be GBP4 million, ahead of management's prior expectations.
In October 2020, the asset finance-focused software developer announced the winning of a five-year extension to a maintenance and licence subscription from an existing client.
Alfa noted that the contract was different in that there was no implementation project associated with it, meaning that several accounting judgements were needed that would affect the period in which revenue would be recognised.
Initially, when the contract was announced Alfa expected to recognise at least 15% of its value in 2020. However, on further analysis, the company found that some of the revenue from the contract should be accelerated, due to no further work being needed to deliver the licence.
This component, which reflects around 40% of the total contract value, will be recognised as a one-off amount on signing the contract for 2020.
"I am delighted to announce another increase in our expectations for 2020, and I continue to be excited about the prospects for our business," said Chief Executive Officer Andrew Denton.
Alfa Financial Software will publish its annual results on March 23.
Shares in the company were up 6.5% at 138.90 pence on Friday in London.
By Dayo Laniyan; [email protected]
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