AFA contract wins fail to dispel gloom

AFA contract wins fail to dispel gloom

New contract wins at AFA Systems have failed to lift the gloom cast by a recent round of staff cuts amid repeated warnings that trading in the second half of the year remains difficult.

The software vendor is reporting its second-largest UK contract order for Interlink, one of AFA's investment management software products, signed with an un-named financial services provider. Under the terms of the agreement, in the current financial year AFA will receive an initial licence fee, services revenues, and an annual recurring licence fee. The contract value is worth approximately £400,000 of which £110,000 will be recognised in this financial year.

Interlink allows fund managers to control the diversification of investments across various asset types, sectors and regions and is targeted at the rapidly growing multi-manager and funds of funds markets. AFA says it is in discussions with a number of major organisations and expect to sign additional new business in the coming months.

The company has also signed a £150,000 contract to supply its Interlink product to Rand Merchant Bank Asset Management, a major South African asset manager based in Johannesburg. In addition, AFA is reporting a £285,000 contract with another South African institution for the asset management product Aims and CRM software Common Knowledge.

Despite this spate of orders, AFA warns that the industry continues to experience a lengthening of sales cycles and a number of project delays.

AFA recently completed a £1 million cost reduction programme, involving redundancies in London and the merging of the two South African offices into one base in Cape Town.

Mike Hart, AFA chairman and chief executive comments: "The cost reduction measures we have effected, coupled with our low cost development, mean that we are well positioned during these difficult industry conditions. All our products have important market positions in a number of financial markets, not just the City of London, and this international applicability, means that we have the ability to lever off this base as the market improves."

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