REG - Alpha Group Intl PLC - Full Year Results
19/03/2025 07:15
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RNS Number : 2715B Alpha Group International PLC 19 March 2025
19 March 2025
Alpha Group International plc
("Alpha" or the "Group")
Full Year Results
for the year ended 31 December 2024
Alpha Group International plc, a global provider of high-tech, high-touch
financial solutions to businesses is pleased to announce its audited Full Year
Results for the year ended 31 December 2024.
Highlights FY 2024
Group Highlights
- Group revenue increased 23% to £135.6m (2023: £110.4m) and
increased organically (excluding Cobase(1)) by 20% to £132.7m (2023:
£110.2m)
- Private Markets (formerly "Institutional") revenue increased 20%
to £69.0m (2023: £57.4m)
- Corporate revenue increased 21% to £63.8m (2023: £52.8m)
- Cobase revenue increased to £2.9m (2023: £0.2m(2))
- Total income, including Net Treasury Income, increased 19% to
£220.9m (2023: £186.0m)
- Profit before tax increased 6% to £123.1m (2023: £115.9m)
- Underlying(3) profit before tax grew 10% to £47.4m (2023:
£43.0m)
- Underlying(3) profit before tax margins of 35% (2023: 39%), and
excluding Cobase 37% (2023: 39%)
- Client balances from Accounts & Payments solution (formerly
"Alternative Banking" solution) increased by 10% to £2.3bn in Q4 (2023 Q4:
£2.1bn)
- Net treasury income from interest on client balances, NTI -
client funds, increased by 14% to £84.0m (2023: £73.7m)
- Adjusted net cash(4) increasing by £38.7m to £217.5m (2023:
£178.8m) reflecting our strong cash generation and debt-free position (and on
a statutory basis increasing by £55m to £252.5m)
- Basic earnings per share up 5% to 215.7p (2023: 206.2p), and
underlying basic earnings per share up 13% to 86.4p (2023: 76.7p)
- Final dividend of 14.0 pence per share, payable on 23 May 2025
to shareholders on the register at 25 April 2025, making a total final
dividend for 2024 of 18.2 pence per share (2024: 16.0p)
- Inclusion in the FTSE 250 index in June 2024, following a
successful listing on the Premium Segment of the Main Market in May 2024
- Appointment of Dame Jayne-Anne Gadhia to the Board as Chair
- Clive Kahn succeeded Morgan Tillbrook as Chief Executive Officer
on 1 January 2025
- Trading momentum in H2 2024 has continued into the year to date,
and we remain confident in the outlook for FY25 and beyond
- Change of division name from "Institutional" to "Private
Markets" (aka "Private Capital Markets") in order to improve understanding of
our target market both internally and externally with clients
(1) Financial Transaction Services B.V. trading as Cobase.
(2) Cobase was acquired on 1 December 2023, and during the month generated
revenue of £0.2m, EBITDA of £0.0m, and a PBT loss of £0.2m.
(3) Underlying excludes the impact of non-cash shared-based payments expense,
net treasury income on client balances, one-off listing-related and M&A
costs.
(4) Excluding collateral received from clients, collateral paid to banking
counterparties, early settlement of trades and the unrealised mark-to-market
profit or loss from client swaps and rolls.
Outlook
The Group's positive trading momentum in H2 2024 has continued into 2025,
which combined with the increasing benefits of our investments to date, means
we remain confident in the outlook for FY25 and beyond.
We remain very excited to see the progress of our Corporate overseas offices
and fully believe each has significant potential to scale and recreate the
successes of our UK team, which has itself had a strong start to the year. At
the same time, our Private Markets division now has four highly compelling
product offerings, each still scratching the surface of its addressable
market. This focus on innovation and diversification has subsequently enabled
it to deliver strong underlying growth, even in a suppressed market, while
also generating significant levels of interest income. Cobase, meanwhile,
continues to impress, and we are confident it will make increasingly
significant contributions to the Group as time goes on.
Enquiries:
Alpha Group International plc Via Alma Strategic Communications
Clive Kahn, CEO
Tim Powell, CFO
Alma Strategic Communications +44 (0) 20 3405 0205
(Financial Public Relations)
Josh Royston
Andy Bryant
Kinvara Verdon
Louisa El-Ahwal
Notes to editors
Alpha is a global provider of high-tech, high-touch financial solutions to
corporate and private market organisations. Working with clients across 50+
countries, we blend intelligent human capabilities with new technologies to
provide an enhanced alternative to traditional banking services, with
solutions covering: FX risk management, global accounts, mass payments, fund
finance, and cash management.
Key to our success is our team - over 500 people based across eleven global
offices, brought together by a high-performance culture and a partnership
structure that empowers them to act as owners of our business.
Despite being an established business listed on the London Stock Exchange, we
remain relentlessly focused on maintaining the same level of operational
agility and client focus we had when we first started in 2009. This dynamic,
combined with the passion of our people, has enabled us to make a substantial
and enduring difference to our clients, and deliver a growth story to match.
Chief Executive's Statement
Introduction
At the time of drafting this report, I have completed two months as CEO of
Alpha and spent a total of four months as an executive director, enough time
to assess the main merits and de-merits of an organisation, and to develop
views on the strategy required. This assessment was also helped by my previous
eight years as Chairman of the Group. During this time as Chair, I was
continually impressed by the quality of Alpha's offering, the calibre of the
Alpha management team and the scale of the future opportunities in front of
them. Following my time working even more closely within the business, that
admiration has only deepened. It is even clearer than before that Alpha's
founder, Morgan Tillbrook, who I have the honour to succeed, has created a
remarkable business based on a tremendous culture and admirable values. I feel
extremely fortunate to have inherited a strong foundation of talented people
and a business offering with exceptional potential. Therefore, I have resisted
the natural tendency of incoming CEOs to establish their authority by
instituting major change. Strategically, little needs to be changed; my
primary objective is to help Alpha fulfil its growth potential through
continued focus on those factors that drove our success in the past, plus
thoughtful, incremental value-adding adjustments rather than major overhauls.
Alpha's strategy remains focused on sustained top-line growth across our three
divisions, driven by continued investment that improves the quality and
effectiveness of our customer offerings. This organic growth strategy requires
the correct balance between investing in systems and people to drive future
revenue growth, whilst ensuring that we continue to achieve meaningful growth
in the current year. We strive to prioritise quality, increased
competitiveness, and efficiency to ensure that every investment drives
meaningful value. We will continue to recruit, coach, and inspire a motivated
team, upholding the high-performing but humble Alpha culture that has defined
the past growth of our business. Alpha is built on exceptional talent, and I
have no doubt that together, we will continue to deliver outstanding results.
To strengthen alignment across our divisions, I have also established an
Executive Committee which is also designed to enhance collaboration,
accelerate decision-making and foster a shared vision. The table below shows
Alpha's Executive Committee members.
Name Role Year started with Alpha
Clive Kahn Chief Executive Officer 2016
Tim Powell Chief Financial Officer 2022
Tim Butters Chief Risk Officer 2019
Alex Howorth CEO, Corporate 2014
Sam Marsh CEO, Private Markets 2018
David Christie COO, Private Markets 2024
Jorge Schafraad CEO, Cobase 2023
Matt Knowles Strategic Advisor 2018
The impressive top-line growth reflected in our 2024 financial performance is
driven by initial returns on the investments made over the last three years to
improve our customer offering and market coverage. I am excited by the number
of product and market opportunities, the majority of which remain in
relatively nascent stages, and I am confident in the scale of untapped demand
for our products and services and our ability to execute effectively and
deliver sustainable growth for all stakeholders. I believe the future belongs
to companies that think smart, move fast and execute with precision. My role
is focused on ensuring that Alpha masters these attributes and is therefore
built to win.
Reporting
In line with the Group's decentralised structure, as previously set out, the
Group now reports its performance against its two markets: the Corporate
market and the Private Markets (previously "Institutional"). We also continue
to separate out the performance of our recent acquisition, Cobase. This move
from a product-centric reporting focus to a client-centric reporting focus was
undertaken to align with Alpha's revised organisational structure. Our
Institutional division has also been renamed to our Private Markets division,
in order to better reflect the types of clients that we serve. Additionally,
our "alternative banking" product now becomes our "accounts & payments"
product. We have changed this label as we believe that the whole of Alpha's
Private Markets offering can be categorised as a "banking alternative", whilst
"accounts and payments" is a more specific description of the individual
products being provided in this segment.
The next chapter of growth
Alpha's growth capabilities derive from over a decade of continuous
investment, and are further driven by significant opportunities for expansion,
spanning geographies, industries, product lines, and business cycles. Our
Alpha teams continue to work closely to identify and develop new products that
address emerging client needs and market demands. Our strong, long-standing
client relationships with C-suite decision-makers of some of the world's most
respected companies have established Alpha as a leading banking alternative
and expert in financial risk management globally. All the above factors
combine to produce a substantial runway for future growth.
The resilience of Alpha's performance is aided by an increasingly diverse
portfolio of products, client types and geographies, reducing exposure to
specific market cycles. This diversified approach also ensures we have the
market reach, expertise and talent to capitalise on a wide range of new
opportunities, helping to deliver sustainable, long-term success.
We will continue to analyse and manage risk, balanced with commercial
opportunity. In 2023 Alpha (and our clients) had to quickly adapt to a new
higher interest rate environment. Mindful of this, we chose to reduce our
credit appetite in these years, which prevented us from working with some
existing clients, whilst reducing the pool of new clients we were willing to
work with. However, more than a year on, our teams have significantly more
insight into clients' business models and end markets within this environment,
allowing them to make more informed client credit decisions, increasing our
appetite in some areas, without compromising on our standards.
Corporate
Highlights
· Revenue growth of 21% to £63.8m (2023: £52.8m)
· Client numbers increased 16% to 974 (2023: 838)
· Average revenue per client increased by 12%
· Headcount increased to 199, 65% of which were Front Office (2023:
171, 59% of which were Front Office)
· Underlying profit before tax margin(1) of 49% (2023: 47%) as a
result of increasing operational gearing and front office productivity
(1) The Group does not report a statutory profit before tax measure for its
divisions, therefore no statutory comparator is presented.
About
Alpha's Corporate division operates from its own UK HQ (consisting of sales
and operations), and six additional international sales offices in the
Netherlands, Spain, Italy, Germany, Australia and Canada.
This increasing global coverage allows Alpha to provide a 24-hour financial
risk management service to our client base, driven by native speakers in every
office. Our risk management offerings seek to protect our clients against
volatility in FX and interest rates. We have also begun helping some clients
with their exposures to changes in lower-volatility commodity prices,
primarily fuel. Revenues are derived primarily from the provision of FX risk
management services to corporates across more than 50 countries.
Business Environment
Corporate macroeconomic conditions were largely unchanged from the previous
year, with clients continuing to face challenges such as high borrowing costs,
reduced cash flow, and limited access to credit. However, we observed a
gradual normalisation of financial forecasting and risk hedging in the second
half of 2024, as corporates acclimatised to this new reality and felt more
prepared to plan for the future.
Performance
I am pleased to report a strong performance for 2024 in our Corporate
division, particularly given the challenging conditions. Overall, the division
grew revenues by 21% to £64m (2023: £53m), with client numbers increasing
16% to 974 (2023: 838). Average revenue per client grew 12%, reflecting our
continued ability to work with larger businesses, as well as increase our
wallet share with existing clients as we grow. The underlying profit before
tax margin increased from 47% to 49%, reflecting the improved operational
gearing filtering through from our overseas offices, as these earlier
investments begin to scale.
Delivering such growth is a testament to the strength of our offering in these
markets, the quality of talent we have available, and the fruits of our
investments, both in London and overseas).
As planned, we made a significant investment into our front office operations
in 2024, growing our headcount by 28% during the year to 129 people (2023:
101) across all seven of our Corporate offices.
As we expand our Front office headcount, productivity remains a key focus for
us. We measure this by comparing the total cumulative tenure of our front
office teams against our revenues.
The widening gap between revenue and cumulative years of experience shown
above illustrates that we have increased productivity levels, despite both the
market headwinds and experienced salespeople moving into roles focused on
leading international expansion and/or the growth and development of our front
office teams. When excluding new joiners, whose contribution in their first
year is naturally lower than more seasoned colleagues, the growth in
productivity is even more pronounced.
We believe the increase in productivity ultimately stems from the growth in
our capabilities, cash position, reputation, experience and training over the
years. In short - our proposition has never been more compelling and our
people have never been better equipped to sell it.
Our Corporate London office delivered a return to growth in FY24, reporting
revenues up 7% to £36.6m (2023: £34.0m) and an increasing momentum in H2
with revenue up 9% against the first half. Following a decline in revenues in
2023, our growth was driven by new talent and investments in the team, having
previously been impacted by the necessary exporting of talent to launch the
overseas offices in the prior years. The 2024 Corporate performance
demonstrates our ability to regrow the Corporate London team, whilst
maintaining our high standards for talent and cultural fit, positioning London
more strongly than ever to continue driving growth.
Having invested significantly into our overseas offices over the past few
years, we are now seeing a real return on our initial investments, with the
businesses beginning to scale. It is important to note that London now
represents 57% of our Corporate revenues compared to 64% last year, reflecting
the diversification of our revenues and the increasing value of our overseas
offices as a contributor to the Group. Indeed, overseas offices reported
revenue growth of 44% collectively in 2024, with excellent contributions from
all offices, except Canada, which was flat. As previously reported, we took
the decision to change the leadership within our Canada office at the back end
of 2023. Encouragingly, revenue performance in the second half of 2024 was
stronger than the first and we will look to support its continued growth into
2025.
The strong foundations of Alpha's model and culture, as well as highly
knowledgeable and incentivised management teams based across all our overseas
offices, fuels confidence that these offices can, over time, scale to mirror
the success of our Corporate London operation.
Corporate Growth Strategy
This year will see continued investment across our Corporate division to drive
further sustainable growth, while not sacrificing our unwavering focus on our
high-quality, client-centric service. We will expand our front-office
headcount and invest in our technology to produce further improvements in the
quality and efficiency of service to our Corporate clients. This will include
improving integration and connectivity into their systems via APIs, which
strengthens our relationships.
Above all else, we will continue to uphold Alpha's reputation for integrity by
always acting in the long-term interests of our clients. In an industry often
driven by short-term sales targets, and where clients frequently fall victim
to poor advice, having a provider that prioritises their interests above all
else - even if it means walking away from a deal - is a real differentiator
for Alpha, and a rare quality that is increasingly recognised and appreciated
by the market.
Private Markets Division (formerly "Institutional")
· Revenue increased by c. 20% to c. £69.0m (2023: £57.4m)
· Account numbers increased 10% to 7,103 (2023: 6,467)
· Risk management client numbers increased by 33% to 311 (2023:
233)
· 37 fund finance mandates signed
· Average revenue per RM client decreased by 2% following significant
increase in new clients, combined with continued macro headwinds
· Headcount increased to 267, 18% of which were Front Office (2023:
251, 14% of which were Front Office)
· Underlying profit before tax margin of 27% (2023: 32%)
About
Our Private Markets division, headquartered in the UK, and with operations in
Luxembourg and Malta, is becoming a leading banking alternative for the
private capital markets sector, covering: private equity, private credit,
venture capital, real estate, infrastructure, and fund of funds.
Aligned with our high-tech, high-touch approach, we offer financial solutions,
traditionally provided by banks, but designed to address the complexities and
specific needs of private markets. Our services include:
- Accounts & Payments: simplified formation and management of
accounts, coupled with efficient and reliable multi-currency payments with a
global reach.
- Risk management: strategic advisory and execution services for
managing currency exposures, with an emerging focus on interest rate risk
management.
- Fund finance: streamlined debt-sourcing and expert advisory around
the structuring of fund finance facilities.
Business Environment
The macroeconomic environment in 2024 remained challenging, with subdued deal
and transaction volumes persisting across private markets. Data provider
Preqin showed total deal value up 0.1% year-on-year, whilst deal volumes
remained significantly below historic norms, largely due to relatively high
interest rates. The growth in total deal value relative to deal volume
reflects the fact that fewer but larger transactions are being made,
highlighting a preference for larger investments in more established companies
- known within the industry as 'mega-deals'.
In response, we expanded our focus upstream to encompass the larger end of the
market. Whilst larger funds typically require a higher level of stature and
financial standing from their suppliers, with our enhanced balance sheet and
FTSE 250 reputation, this approach has begun to yield results, providing a
foundation to pursue even more opportunities as macro conditions improve.
While we are not relying on any material change in the macro backdrop in 2025
to deliver on our ambitions, there is nonetheless an encouraging view within
the market that we will see an increase in activity. Private equity firms face
growing pressure to generate returns and exit long-held assets, as easing
inflation and falling interest rates also drive an improvement in valuation
multiples. As a result, more funds are expected to take advantage of
acquisition opportunities and deploy new capital in 2025 than in previous
years.2
(2) S&P Global 2024
(https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/1/private-equity-backed-megadeals-jumped-higher-in-2024-87094719)
Performance
Despite the challenging environment, 2024 was a year of very encouraging
progress for Alpha's Private Markets division, with revenues increasing by 20%
to £69m. Alpha's growing product portfolio, solid demand for these products,
and the team's cross-selling capabilities are key drivers in this
outperformance. A detailed breakdown of performance across our core offerings
is provided below.
Risk Management (RM)
The Private Markets RM team delivered another strong performance. Revenue
increased 20% in the period to £28.3m (FY 2023: £23.5m) with client numbers
increasing 33% to 311 (December 2023: 233). This strong performance reflects
the rewards of investing in our sales team, their high levels of productivity
(see chart below), and our growing reputation, helped by the inclusion in the
FTSE 250 and the expansion of our product offerings. In addition, we see
continued success in the cross-selling between these product offerings, with
accounts & payments, and fund finance facilitating introductions to our RM
offering (and vice versa). Average revenue per client decreased by 2%, but
this is a natural by-product of the record number of new clients we have
onboarded, many of which are in the earlier stages of us growing wallet share.
For context, client numbers increased by 33% from 233 to 311 between 2023 and
2024, whereas between 2022 and 2023 they increased by 10%, from 211 to 233.
The narrowing gap between revenue and cumulative years of front office
experience reflects a small reduction in productivity in the year. This was
not unexpected given private market deal volumes continued to decline across
our core markets. As the market unwinds and our teams continue to mature and
scale, we expect to see productivity increase, much like we have seen in our
Corporate division.
Accounts & Payments (formerly alternative banking)3
Accounts & Payments revenues increased by 20% to £40.6m (FY 2023:
£33.9m) and account numbers increased to 7,103 (2023: 6,467), despite the
subdued levels of deal activity within the market and the knock-on effect this
had on the need for accounts.
Our market outperformance reflects the investments in the efficiency and
capabilities of our purpose-built technology, the increasing automation of
sophisticated client onboarding, the growing penetration into larger asset
managers, increasing levels of cross-selling between our products, and the
expansion of our sales teams, which we began to build in 2023.
The interest rate environment contributed an additional £84m in net treasury
income from client balances. This income stream serves as a natural hedge
against the adverse impact that high interest rates have on private markets
deal activity, which is the main factor impacting demand for our services.
2024 client balances averaged £2.15bn, which earned an average interest rate
of 3.8% across the year, as the table below shows in more detail.
3 Our "alternative banking" product has been renamed to our "accounts &
payments" product. We have changed this label as we believe that the whole of
Alpha's offering can be categorised as a "banking alternative", whilst
"accounts and payments" is a more specific description of the individual
products being provided in this segment.
Quarter Blended average client balance, Accounts & Payments Blended average interest rate
Q4 2024 £2.3bn 3.5%
Q3 2024 £2.2bn 3.8%
Q2 2024 £2.1bn 3.9%
Q1 2024 £2.0bn 4.0%
Q4 2023 £2.1bn 3.8%
Q3 2023 £1.9bn 3.8%
Q2 2023 £1.9bn 3.8%
Q1 2023 £1.6bn 2.8%
We will continue to disclose this income stream separately from our underlying
revenues, to reflect the fact that interest rates are a variable we cannot
control. Nonetheless, as interest rates are likely to remain
"higher-for-longer", this provides a significant income stream that we will
continue to benefit from, particularly as the aggregate balances we hold for
our clients are likely to continue to increase as the number of accounts
grows. Alpha is able to obtain an attractive interest rate return on these
client balances through our ability to aggregate numerous individual balances,
most of which are transitory in nature and individually low in value. In
addition to the interest income received on these balances, Alpha is investing
in a new offering designed to allow customers to gain access to a wider
variety of interest rate products in return for an arrangement fee.
The previous years' investments into the operational scalability of our
accounts & payments offering continue to drive increasing levels of
operational gearing. The number of accounts per staff member continues to
increase, driven by increasing levels of automation and process optimisation.
Fund Finance
The Fund Finance team continues to make very pleasing progress in both adding
new clients and winning increasingly larger-value mandates, which has resulted
in revenues increasing by over 130% to £1.7m (2023: £0.7m). This is against
the backdrop of a quiet market and highlights the quality of the team and the
modular client proposition they have built, as well as the potential of the
business as the market recovers.
Work is also underway to continue upgrading our digital debt-sourcing
platform, Alpha Match. These upgrades will represent another industry-first
within the private markets, and we look forward to providing more details once
publicly launched.
Private Markets Growth Strategy
Alpha's Private Markets division has demonstrated impressive recent profit
growth, supported by a favourable working capital profile, despite a period of
low deal activity within its market. Given the investments we have made in
people and technology over the last three years, we view the division as still
very much in a build-out stage, highlighting the significant future
opportunity, and potential operational gearing as the division scales.
Although we place no reliance on it, any increase in deal activity in 2025
will naturally lead to more demand for our services. Beyond the anticipated
market recovery, we have identified several long-term levers that can drive
growth beyond volume increases.
First, alongside our channel partnerships with various service providers,
there is significant potential to establish deeper, more direct client
relationships with investment managers across all of our product lines.
Historically, our direct interactions with investment managers have primarily
focused on managing their FX exposures, with accounts & payments services
largely managed through channel partners. By fostering more direct
relationships across all of our product lines, we expect to enhance client
loyalty, increase our stickiness, improve our ability to cross-sell, and
expand our share of wallet.
Second, we see a potential long-term opportunity to extend our offering, in a
measured way, beyond Europe, unlocking new markets and revenue streams in the
US and Singapore. Many of our existing European clients already operate in
these jurisdictions and have expressed an appetite for us to service their
needs in North America and South East Asia, creating an exciting opportunity
to quickly increase wallet share with firms that already know and trust us.
Finally, as we solidify our role as a trusted advisor to these fund clients,
we have the chance to innovate and not only upgrade our existing solutions but
also deliver new solutions in adjacent product areas that are cost-effective
for Alpha to launch and support more of our clients' banking and financial
risk management needs.
Cobase
Highlights (proforma)4
· Revenue growth of 70% to €3m (2023: €2m)
· Client numbers increased 59% to 214 (2023: 135)
· Annual recurring revenue ("ARR") at the end of the year at €5m
· Headcount remained at 21, with 6 Front Office and 15 Back Office
(2023: 21)
4 Cobase was acquired on 1 December 2023, and during that month generated
revenue of £0.2m, EBITDA of £0.0m, and a PBT loss of £0.2m, which was
included in the Group's 2023 results.
Amsterdam-based Cobase is the Group's treasury-focused technology platform
providing bank connectivity technologies that enable corporates and private
market companies to manage all their banking relationships, accounts and
transaction activity through one portal.
Operating under a SaaS-based subscription fee model with its own brand and
team, Cobase has performed strongly during its first full year with the Group,
following its acquisition in December 2023.
On a pro-forma basis, client numbers increased 59% to 214 (2023: 135), and
revenues grew by 70% to €3m (2023: €2m), with increasing momentum seen in
H2. During the year, Cobase achieved particular success with larger clients
and saw some encouraging signs of cross-selling across our existing Corporate
and Private Markets client base.
Cobase's simplicity of use, cost-effectiveness and ease of implementation,
along with its flexible commercial terms with no onerous long-term contracts,
represent a tangible competitive advantage in the treasury technology market.
We have seen first-hand how CFOs and Treasurers managing multiple bank
relationships value the ability to view and manage all their banking
information and transactions in one place.
During the last year, the focus was allowing Cobase to optimise its treasury
platform, over driving operational integration. We now feel the business is
better prepared to work more closely with our Corporate and Private Markets
teams to cross-sell to the Group's clients, as well as continuing to capture
new clients of their own. This year we will therefore continue to invest in
Cobase's existing sales teams, technology and integrations.
We expect further financial growth and increased client numbers in 2025 and,
over the long term, expect this to deliver an increasingly meaningful
contribution to Alpha as it integrates across the wider Group.
Capital Allocation and Share Buyback
The Group generated significant levels of cash in 2024. As at 31 December 2024
we had net assets of £279m (2023: £223m), with adjusted net cash increasing
by c. £40m to £218m (2023: £179m).
We review our cash position on a regular basis, and if we feel our cash
position becomes greater than we require, will look to reassess our capital
allocation.
During the year, we were pleased to initiate two Share Buyback programmes,
totalling £40m. The first £20m buyback programme was announced on 29 January
and completed in full on 27 June. Our second buyback, announced on 1 May,
commenced on 28 June. We have completed roughly half of this second buyback
programme and expect it to conclude in the first half of 2025.
Our overarching preference remains to allocate capital into high-confidence
organic growth initiatives, within both existing and potential new business
units. Such initiatives include extending and improving product lines and tech
solutions, expanding our territories when appropriate, or any other
moat-widening opportunities that differentiate us from competitors. Although
we are not actively seeking them out, we will consider complementary
acquisitions that could further amplify revenue growth and enhance our
proposition.
In view of the Group's confidence in the sizable and exciting market
opportunities presented to us, the Board believes that, after maintaining our
progressive dividend policy and executing value-capped share buybacks,
retaining and deploying our remaining cash to grow the business will deliver
the best value for shareholders long-term.
In addition to providing cash for investment, a strong balance sheet is also
important to our counterparties. A healthy cash profile also provides our
clients with confidence.
Chief Financial Officer's Report
Revenue
2024 has seen strong growth across both divisions despite a challenging
macroeconomic environment, with total revenue increasing 23% to £136m (2022:
£110m). Corporate revenue grew 21% to £63.8m (2023: £52.8m), and Private
Markets (formerly "Institutional") grew 20% to £69.0m (2023: £57.4m).
Cobase, the group's first acquisition, contributed £2.9m of revenue in its
first full year of ownership.
Corporate
The Corporate division focuses on supporting corporates in managing their
business risks associated with foreign currency, interest rates and, most
recently, commodities, through the Group's sales teams located in London,
Toronto, Amsterdam, Milan, Madrid, Munich, and Sydney. Revenue grew by 21%
over the prior year to £63.8m (2023: £52.8m).
The UK office returned to growth in 2024 following an investment in
rebuilding the talent and experience in the team, having been impacted by the
necessary exporting of talent to launch the overseas offices in the prior
year. UK revenue growth in 2024 was c. 7% year on year, with momentum
building in the second half.
All overseas offices showed excellent YoY growth except Canada, which was
flat. A new Canadian leadership team was installed in late 2023 and
Canada has begun to see the benefits of this change in 2024, with revenue
growing sequentially in H2 over H1, giving confidence that the right structure
is in place to return to growth in 2025. The collective growth rate of Alpha's
remaining overseas offices meanwhile was nearly 60%, highlighting the merit of
the Group's global expansion strategy.
Overall the division saw strong underlying profit margin growth to c. 49%
(2023: c. 47%).
Private Markets (formerly "Institutional")
Private Markets revenue grew 20% from £57.4m in the prior year to £69.0m in
2024, driven by an increased number of accounts, increased risk management
revenue and a full year of revenue from our new Fund Finance offering which
was launched in 2023.
Each of the division's core products showed strong growth despite the subdued
levels of deal activity within the market:
· The Private Markets Risk Management team delivered another strong
performance. Revenue increased 17% in the period, with client numbers
increasing 33% to 311 (2023: 233).
· Accounts & Payments revenues increased by 20%, from £33.9m to
£40.6m and account numbers increased to 7,103 (2023: 6,467). Revenue from
annual account fees is recognised on a straight-line basis over the 12 months
from the date the account was opened or renewed. At 31 December 2024 deferred
revenue was £8.1m (2023: £7.1m), and this will be recognised as revenue in
2025.
· Fund finance continued its encouraging growth with over £1.7m of
revenue in its first full year of operations (143% growth).
The underlying operating profit margin of the division was c. 27% (2023: c.
32%). The reduction against 2023 was predominately due to the timing mismatch
of in-year investment, increased deferred account fees and the macro
environment suppressing revenues.
Cobase
Momentum continues to build in Cobase following its acquisition in December
2023. Cobase operates a SaaS-based subscription fee model, and on a proforma
basis, client numbers and revenue increased by 59% and 70% respectively in the
year to 214 and €3m (2023: €2m). This growth in its first full year of
ownership validates the acquisition rationale and supports confidence in
Cobase's ability to make an increasingly meaningful contribution over time as
it continues to integrate with the wider group.
Group Profitability
Statutory profit before tax increased by 6% to £123.1m (2023: £115.9m).
Underlying profit is presented in the income statement to allow a better
understanding of the Group's financial performance on a comparable basis from
year to year. The underlying profit excludes the impact of the net treasury
income on client balances (see below) and non-underlying items. On this basis,
the underlying profit before tax increased by 10% to £47.4m (2023: £43.0m).
The underlying organic profit before tax (excluding Cobase) growth was 15%.
As previously highlighted, the Group continued to invest in the year,
specifically in the Private Markets division as we build out our products and
offerings. Investments included a full year of the new Private Markets HQ in
London, and further technology improvements to increase scalability and
digitisation. Overall headcount increased in the year from 480 to over 524 at
31 December 2024 to support future long-term growth. Importantly, the ratio of
front office versus back office staff has increased in both divisions, laying
the foundations for future growth. The underlying profit before tax margin,
excluding Cobase, reduced slightly to 37% (2023: 39%) due to us continuing to
invest in long-term growth, and the suppressed macro environment. The
statutory profit before tax margin remained high at 56% reflecting the net
treasury income from client balances.
Net Treasury Income (NTI)
The current interest rate environment has allowed the Group to continue
benefitting from interest income generated from client balances. 'Net treasury
income - client funds' has contributed £84.0m of net treasury income in the
year (2023: £73.7m), with the number and size of client balances growing to
an average of £2.3bn in Q4 2024.
Whilst this interest income stream is a positive boost for the Group and a
natural by-product of our increasingly diversified product offering, we are
mindful that aspects of its dynamics are driven by macroeconomics beyond our
control. As previously outlined, we recognise this income on client balances
as 'net treasury income - client balances' and continue to exclude it from our
underlying results.
The Group has also generated net treasury income on the initial and variation
margins it requires for its Risk Management client relationships. These
balances contribute to the Group's cash and cash equivalent balances and
directly relate to the business's operating activities. Therefore, we have
decided to separately disclose these amounts within total income at the top of
the Income Statement, as opposed to within finance income, 2024: £1.3m (2023:
£1.8m).
Taxation
The effective tax rate for the period was 24.7% (2023: 23.4%). The increase in
effective rate is primarily due to the change in UK corporation tax from 19%
to 25% in April 2023. The rate was lower than the pro rata UK headline rate of
25% due to the mix of profits across our global subsidiaries. There were no
other material changes in underlying rates.
Earnings Per Share
Underlying basic earnings per share was up 13% at 86.4p (2023: 76.7p), whilst
statutory basic earnings per share was up 5% at 215.7p (2023: 206.2p).
Key Performance Indicators
The Group monitors its performance using several key performance indicators
which are reviewed at Executive Committee and Board level. The key financial
performance indicators are revenue, total income, underlying profit before
tax, profit before tax, PBT margin, adjusted free cash, number of Corporate
clients, number of Private Markets Risk management clients, number of Accounts
& Payments client accounts, and the front office to back office headcount
ratios.
Cash Flow and Balance Sheet
In the year ended 31 December 2024, 53% of the revenue in the year was derived
from products where the revenue is converted into cash within a few days of
the trade date (2023: 53%). Including net treasury income, cash conversion was
72% in 2024 (2023: 72%). This has continued to have a positive impact on the
Group's cash flow. On a statutory basis, net cash and cash equivalents
increased in the year by £55m to £252.5m.
The Group's statutory cash position can fluctuate significantly from day to
day due to the impact of changes in: collateral paid to banking partners,
margin received from clients, early settlement of trades, or the unrealised
mark-to-market profit or loss from client swaps. These movements result in an
increase or decrease in cash with a corresponding change in other payables and
trade receivables. Therefore, in addition to the statutory cash flow, the
Group presents an adjusted net cash summary excluding these items, shown
below. On this basis, adjusted net cash increased in the year by £39m to
£217.5m.
31 December 31 December
2024
2023
£'m £'m
Net cash and cash equivalents 252.5 197.9
Variation margin (owed by)/paid to banking counterparties* (13.1) 11.1
239.4 209.0
Margin received from clients** (35.3) (51.1)
Net MTM timing of profit from client drawdowns and extensions within trade
receivables
13.4 20.9
Adjusted net cash*** 217.5 178.8
*Includes MTM on Alpha's interest rate swaps
**Included in 'other payables' within 'trade and other payables'.
*** Excluding collateral received from clients, collateral paid to banking
counterparties, early settlement of trades and the unrealised mark-to-market
profit or loss from client swaps and rolls.
The overall net assets of the Group increased in the year by £56m to £279m
(2023: £223m).
Buyback
During 2024 we announced two share buyback programmes of up to £20m. The
first programme completed in June 2024. As at 31 December, £10m of the second
programme had also been completed. As at 18 March 2025, a further £4m of
the second programme had been completed.
Dividend
Following the strong full-year results, the Board is pleased to declare a
final dividend of 14.0p per share (2023: 12.3p). Subject to shareholder
approval, the final dividend will be payable to shareholders on the register
at 25 April 2025, and will be paid on 23 May 2025. This represents a total
dividend for the year of 18.2p per share (2023: 16.0p).
Despite having sufficient reserves across the Group, the Board recently became
aware that the Company's reserves were insufficient, meaning certain dividends
and share purchases were made other than in accordance with the Companies Act
2006. Details of the transactions which are affected by this issue (the
"Relevant Purchases") are set out in Notes 14 and 17 to the Consolidated
financial statements. Resolutions will be proposed to shareholders at the
forthcoming AGM to remedy this matter.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2024
Year ended Year ended
31 December 2024 31 December 2023
Note £'000 £'000
REVENUE 4 135,600 110,442
Net treasury income - client funds 4 83,996 73,676
Net treasury income - own funds 4 1,307 1,843
TOTAL INCOME 220,903 185,961
Operating expenses (102,608) (73,809)
OPERATING PROFIT 5 118,295 112,152
Underlying operating profit 42,556 39,205
3
Net treasury income - client funds 83,996 73,676
Non-underlying items (8,257) (729)
Finance income 6 6,053 4,616
Finance expenses 6 (1,234) (834)
PROFIT BEFORE TAXATION 123,114 115,934
Underlying profit before taxation 47,375 42,987
Net treasury income - client funds 83,996 73,676
Non-underlying items 3 (8,257) (729)
Taxation 7 (30,389) (27,142)
PROFIT FOR THE YEAR 92,725 88,792
Attributable to:
Equity holders of the parent 93,019 88,825
Non-controlling interests (294) (33)
PROFIT FOR THE YEAR 92,725 88,792
OTHER COMPREHENSIVE INCOME/(LOSS):
Items that will or may be reclassified to the profit or loss:
Exchange loss on translation of foreign operations (2,485) (679)
(Loss)/gain recognised on hedging instruments (1,318) 3,193
Tax relating to items that may be reclassified 329 (798)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 89,251 90,508
Attributable to:
Equity holders of the parent 89,576 90,541
Non-controlling interests (325) (33)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 89,251 90,508
Earnings per share (EPS) attributable to equity owners of the Parent (pence
per share)
- basic 8 215.7p 206.2p
- diluted 8 211.7p 203.4p
- underlying basic 8 86.4p 76.7p
- underlying diluted 8 84.8p 75.6p
Consolidated Statement of Financial Position
As at 31 December 2024 Company number: 07262416
As at As at
31 December 2024 31 December 2023
Restated(1)
NON-CURRENT ASSETS Note £'000 £'000
Goodwill 4,526 4,707
Intangible assets 14,957 14,007
Property, plant and equipment 7,670 8,800
Right-of-use assets 10 18,993 20,894
Derivative financial assets 11 28,699 14,369
TOTAL NON-CURRENT ASSETS 74,845 62,777
CURRENT ASSETS
Cash and cash equivalents 13 252,468 197,941
Derivative financial assets 11 132,446 90,966
Trade and other receivables 12 12,715 12,033
Fixed collateral 13 10,063 8,810
Current tax asset - 73
TOTAL CURRENT ASSETS 407,692 309,823
TOTAL ASSETS 482,537 372,600
EQUITY
Share capital 14 87 87
Share premium account 52,566 52,566
Treasury shares 14 (6,697) -
Retained earnings 235,256 170,939
Other reserves (3,086) (632)
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 278,126 222,960
Non-controlling interests 879 531
TOTAL EQUITY 279,005 223,491
CURRENT LIABILITIES
Derivative financial liabilities 11 84,080 34,288
Other payables 15 45,747 59,750
Deferred income 15 8,059 7,072
Lease liability 10 2,180 1,028
Current tax liability 12,086 11,293
TOTAL CURRENT LIABILITIES 152,152 113,431
NON-CURRENT LIABILITIES
Derivative financial liabilities 11 24,695 5,922
Other payables 15 885 875
Redemption liability 1,812 1,884
Deferred tax liability 7 3,661 5,305
Lease liability 10 20,327 21,692
TOTAL NON-CURRENT LIABILITIES 51,380 35,678
TOTAL LIABILITIES 203,532 149,109
TOTAL EQUITY AND LIABILITIES 482,537 372,600
The Consolidated Financial Statements of Alpha Group International plc were
approved by the Board of Directors on 18 March 2025 and signed on its behalf
by:
C Kahn,
Director
T Powell,
Director
1 See note 12 for details of the prior year restatement.
Consolidated Statement of Cash Flows
For the year ended 31 December 2024
Year ended 31 December 2024 Year ended 31 December 2023
Restated2
CASH FLOWS FROM OPERATING ACTIVITIES Note £'000 £'000
Profit before taxation 123,114 115,934
Net treasury income - client funds (83,996) (73,676)
Net treasury income - own funds (1,307) (1,843)
Finance income 6 (6,053) (4,616)
Finance expense 6 1,234 834
Amortisation and impairment of intangible assets 6,598 3,137
Depreciation of property, plant and equipment 1,782 1,325
Depreciation of right-of-use assets 10 2,793 1,939
Loss on disposal of property, plant and equipment 224 8
Gain on disposal of right-of-use asset (93) -
Share-based payment expense/(credit) 5,325 (58)
Increase in other receivables (752) (3,858)
Decrease in other payables (13,670) (15,550)
(Increase)/decrease in derivative financial assets (53,712) 22,435
Increase/(decrease) in derivative financial liabilities 65,149 (9,232)
Increase in fixed collateral (1,253) (4,084)
CASH INFLOWS FROM OPERATING ACTIVITIES 45,383 32,695
Net treasury income received 85,598 73,975
Tax paid (30,451) (15,881)
NET CASH INFLOWS FROM OPERATING ACTIVITIES 100,530 90,789
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of subsidiary, net of cash acquired - (8,227)
Payments to acquire property, plant and equipment (1,038) (6,927)
Payments to acquire right-of-use assets (25) (235)
Proceeds from the disposal of right-of-use assets 20 -
Proceeds from sale of property, plant and equipment 4 5
Expenditure on intangible assets (7,739) (8,025)
Finance income received 6,053 4,616
NET CASH OUTFLOWS FROM INVESTING ACTIVITIES (2,725) (18,793)
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of ordinary shares by Parent Company - 491
Issue of treasury shares by Parent Company 303 -
Purchase of own shares (30,004) -
Acquisition of non-controlling interest (48) -
Issue of share options 26 -
Dividends paid to equity holders of Parent Company 9 (7,084) (6,368)
Dividends paid to subsidiary shareholders 9 (2,229) (2,762)
Payment of lease liabilities - principal 10 (1,065) (779)
Payment of lease liabilities - interest 10 (1,145) (793)
NET CASH OUTFLOWS FROM FINANCING ACTIVITIES (41,246) (10,211)
INCREASE IN NET CASH AND CASH EQUIVALENTS IN THE YEAR 56,559 61,785
Net cash and cash equivalents at beginning of year 197,941 136,799
Net exchange loss (2,032) (643)
NET CASH AND CASH EQUIVALENTS AT END OF YEAR 13 252,468 197,941
2 Prior year has been restated for the balance sheet reclassification outlined
in note 12.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
Attributable to the owners of the Parent
Share capital Share premium account Treasury shares Retained earnings Other reserves Total Non- controlling Total
interests
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2023 84 52,075 - 88,807 1,931 142,897 - 142,897
Profit/(loss) for the year - - - 88,825 - 88,825 (33) 88,792
Other comprehensive income/(expense):
Gains recognised on hedging instruments - - - 2,395 - 2,395 - 2,395
Exchange differences arising on translation of foreign operations - - - - (679) (679) - (679)
Transactions with owners:
Acquisition of subsidiary - - - 103 (1,884) (1,781) 564 (1,217)
Shares issued on vesting of share option schemes 3 491 - (3) - 491 - 491
Share-based payments - - - (58) - (58) - (58)
Dividends paid (note 9) - - - (9,130) - (9,130) - (9,130)
Balance at 31 December 2023 87 52,566 - 170,939 (632) 222,960 531 223,491
Profit/(loss) for the year - - 93,019 93,019 (294) 92,725
Other comprehensive expense:
Losses recognised on hedging instruments - - - (989) - (989) - (989)
Exchange differences arising on translation of foreign operations - - - - (2,454) (2,454) (31) (2,485)
Transactions with owners:
Capital contribution to subsidiary with minority interest - - - (676) - (676) 676 -
Acquisition of non-controlling interest - - - (45) - (45) (3) (48)
Acquisition of treasury shares (note 14) - - (10,721) (19,283) - (30,004) - (30,004)
Treasury shares issued in relation to subsidiary earnout (note 14) - - 4,024 - - 4,024 - 4,024
Issue of share options in subsidiary undertakings - - - (3,721) - (3,721) - (3,721)
Share-based payments - - - 5,325 - 5,325 - 5,325
Dividends paid (note 9) - - - (9,313) - (9,313) - (9,313)
Balance at 31 December 2024 87 52,566 (6,697) 235,256 (3,086) 278,126 879 279,005
Notes to the Consolidated Financial Statements
For the year ended 31 December 2024
1. General information
Alpha Group International plc (the "Company") is a public limited company,
with ordinary shares on the Main Market of The London Stock Exchange since 2
May 2024 (previously listed on AIM, since 7 April 2017). The Company is
incorporated and domiciled in the UK (registered number 07262416) and its
registered office is Brunel Building, 2 Canalside Walk, London, England, W2
1DG.
Statutory accounts for the year ended 31 December 2023 have been delivered to
the Registrar of Companies. The statutory accounts for the year ended 31
December 2024 will be delivered to the Registrar of Companies following the
Group's Annual General Meeting.
The auditors' reports on the financial statements for 31 December 2023 and 31
December 2022 were unqualified, did not draw attention to any matters by way
of emphasis, and did not contain a statement under 498(2) or 498(3) of the
Companies Act 2006.
2. Material accounting policies
Basis of preparation
The Consolidated Financial Statements have been prepared in accordance with UK
adopted international accounting standards using the measurement bases
specified by UK IFRS for each type of asset, liability, revenue or expense.
The financial information set out above does not constitute statutory accounts
for the purposes of section 435 of the Companies Act 2006, for the years ended
31 December 2024 and 31 December 2023, but is derived from those accounts.
The Directors have assessed the Group's projected business activities and
available financial resources together with detailed forecasts for cash flow
and relevant sensitivity analysis. The directors believe that the Group
remains well placed to manage its business risks successfully. After making
appropriate enquiries the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, the directors continue to adopt the going
concern basis in preparing the statutory accounts for the year ended 31
December 2024.
The preparation of consolidated financial statements in conformity with UK
adopted IFRS requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets,
liabilities, income and expenses. The estimates and associated assumptions are
based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis of
making judgements about the carrying value of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
3. Alternative performance measures
The Group uses alternative performance measures to monitor financial
performance and cash flows (we refer to these results as 'adjusted' or
'underlying'). This is consistent with the way that financial performance is
measured by management and reported to the Executive Committee and Board.
These measures are not measures of performance under IFRS and should be
considered in addition to, and not as a substitute for, IFRS measures of
financial performance and liquidity. These measures may not be comparable
across companies.
Financial performance
This note analyses non-underlying items, which are included in our results for
the year but are excluded from underlying operating profit, underlying Profit
before taxation and underlying EPS.
Non-underlying items in the year are made up of the below charges/ (credits):
31 December 2024 31 December 2023
£'000 £'000
Acquisition costs in relation to business combinations 104 487
Other M&A related integration and transaction costs - 62
Costs associated with the move from AIM to the Main Market 2,746 248
Amortisation of purchased intangible assets 82 (10)
Share-based payments charge/(credit) 5,325 (58)
Total non-underlying items 8,257 729
Share based payments and amortisation of intangible assets are non-cash
underlying items, the cash flow impact of the other non-underlying items is
not materially different from their impact on the Consolidated Statement of
Comprehensive Income.
The following tables show the reconciliation of the Group's statutory
financial performance measures to our underlying financial performance
measures:
Operating profit Profit before tax Profit after tax Earnings attributable to equity holders Basic EPS
Year ended 31 December 2024 £'000 £'000 £'000 £'000 Pence
Statutory measure 118,295 123,114 92,725 93,019 215.7
(Deduct)/add back:
NTI - client funds (83,996) (83,996) (83,996) (83,996) (194.8)
Non-underlying items 8,257 8,257 8,257 8,257 19.2
Tax effect of above items* - - 19,971 19,971 46.3
Underlying measure 42,556 47,375 36,957 37,251 86.4
*The tax effect includes £20,999k on the NTI client funds, £876k of
allowable share-based payment charges across the Group and £152k of allowable
costs associated with the move from AIM to the Main Market.
3. Alternative performance measures (continued)
Operating profit Profit before tax Profit after tax Earnings attributable to equity holders Basic EPS
Year ended 31 December 2023 £'000 £'000 £'000 £'000 Pence
Statutory measure 112,152 115,934 88,792 88,825 206.2
(Deduct)/add back:
NTI - client funds (73,676) (73,676) (73,676) (73,676) (171.0)
Non-underlying items 729 729 729 729 1.7
Tax effect of above items - - 17,143 17,143 39.8
Underlying measure 39,205 42,987 32,988 33,021 76.7
Cash flows
The Group's statutory cash position can fluctuate significantly from day to
day due to the impact of changes in: collateral paid to banking partners,
margin received from clients, early settlement of trades, or the unrealised
mark-to-market profit or loss from client swaps. These movements result in an
increase or decrease in cash with a corresponding change in other payables and
trade receivables. Therefore, in addition to the statutory cash flow, the
Group presents an adjusted net cash summary excluding these items, shown
below. On this basis, adjusted net cash increased in the year by £39m to
£217.5m.
31 December 2024 31 December 2023
£'000 £'000
Statutory cash and cash equivalents 252,468 197,941
Variation margin (receivable from)/paid to banking counterparties* (13,097) 11,125
239,371 209,066
Margin received from clients** (35,336) (51,137)
Net MTM timing of profit from client drawdowns and extensions within trade 13,503 20,897
receivables
Adjusted net cash*** 217,538 178,826
*Includes MTM on Alpha's interest rate swaps
** Included in 'other payables' within 'trade and other payables'.
*** Excluding collateral received from clients, collateral paid to banking
counterparties, early settlement of trades and the unrealised mark to market
profit or loss from client swaps and rolls.
4. Segmental reporting
During the year the Group has evolved its organisational structure from a
product centric structure to a client centric structure and as a result this
structure has been mirrored within the presentation of the financial
statements in accordance with IFRS. The Group now comprises three operating
segments which are Corporate, Private Markets* and Cobase. These align with
the management accountabilities for performance management and the basis for
internal financial reporting and represent our reportable segments. These
three segments are explained further as below:
· Corporate focuses on currency risk management to corporate clients,
primarily for the purpose of hedging commercial foreign exchange exposures.
· Private Markets includes accounts & payments- simplified
formation and management of currency accounts, coupled with efficient and
reliable multi-currency payments across key investment jurisdictions. Currency
management: strategic advisory and execution services for managing currency
exposures, with a growing focus on interest rate risk management and Fund
finance: streamlined debt-sourcing and expert advisory around the structuring
of facilities.
· Cobase, a Dutch based company that was acquired by the Group in
December 2023. Cobase is a cloud-based provider of bank connectivity
technology that enables corporates to manage their banking relationships and
transactions.
*As described further in the Chief Executive's Statement, the Institutional
division has been renamed to "Private Capital Markets" or "Private Markets"
for short. This change has been made as it is a clearer description of the
types of clients that Alpha service.
The chief operating decision makers, being the Group's Chief Executive Officer
and the Chief Financial Officer, monitor the results of the three operating
segments separately each month. Key measures of operating segments used to
evaluate performance are revenue, and underlying profit before taxation.
Management believe that these measures are the most relevant in evaluating the
performance of the segment and for making resource allocation decisions.
The Group has disclosed revenue for each segment disaggregated between Risk
Management, Accounts & payments and platform fees, to assist users in
understanding the product mix. All costs are attributed to these segments.
As explained further in note 3, the Group excludes 'Net treasury income -
client funds' from the definition of underlying profit. 'Net treasury income -
own funds' relates to interest earned on client margin held by the Corporate
division and is incorporated in the definition of underlying profit for that
business as this income is a direct consequence of operational activities.
The Corporate division has overseas offices in Australia, Canada, Netherlands,
Italy, Spain and Germany. In 2024, these offices contributed aggregate revenue
of £27.2m and underlying profit before taxation of £6.6m (£18.7m and £3.8m
underlying profit respectively in prior year). A small component of Private
Markets costs arise in Luxembourg, and the profit related to the Malta office
has been allocated between the various European entities it supports.
4. Segmental reporting (continued)
2024
Corporate Private Markets Cobase Total
£'000 £'000 £'000 £'000
Risk Management* 63,759 28,344 - 92,103
Accounts & payments** - 40,610 - 40,610
Platform fees - - 2,887 2,887
Total revenue 63,759 68,954 2,887 135,600
Net treasury income - own funds 1,307 - - 1,307
Segment income 65,066 68,954 2,887 136,907
Operating costs*** (39,261) (49,893) (5,197) (94,351)
Underlying operating profit 25,805 19,061 (2,310) 42,556
Finance Income 6,016 37 - 6,053
Finance expense (457) (777) - (1,234)
Underlying profit before taxation 31,364 18,321 (2,310) 47,375
Net treasury income - client funds 4,059 79,937 - 83,996
Non-underlying items (8,257)
Profit before taxation 123,114
2023
Re-presented Corporate Private Markets Cobase Total
£'000 £'000 £'000 £'000
Risk Management* 52,811 23,518 - 76,329
Accounts & payments** - 33,927 - 33,927
Platform fees - - 186 186
Total revenue 52,811 57,445 186 110,442
Net treasury income - own funds 1,843 - - 1,843
Segment income 54,654 57,445 186 112,285
Operating costs*** (34,060) (38,586) (434) (73,080)
Underlying operating profit 20,594 18,859 (248) 39,205
Finance Income 4,611 - 5 4,616
Finance expense (399) (435) - (834)
Underlying profit before taxation 24,806 18,424 (243) 42,987
Net treasury income - client funds 5,534 68,142 - 73,676
Non-underlying items (729)
Profit before taxation 115,934
4. Segmental reporting (continued)
*Risk Management represents revenue derived from forward, spot, and option
contracts provided to corporate and private market clients, primarily for the
purpose of hedging commercial foreign exchange exposures.
**Accounts & payments represents revenues derived from fees and foreign
exchange spot contracts
generated from the provision of cross border payments, collections and annual
account fees to corporates and private markets, as well as Fund Finance
advisory fees.
***Operating costs excludes non-underlying items as set out in Note 4 above.
All revenue is from external customers and is based on the location of those
customers.
Revenue by region of customer 31 December 2024 31 December 2023
£'000 £'000
United Kingdom 43,578 40,252
Europe 68,847 55,238
Canada 4,389 4,251
Rest of the world 18,786 10,701
Total 135,600 110,442
No customer represents more than 10% of revenue and the Group does not believe
there is undue reliance on any specific sub-set of customers.
Revenue by product 31 December 2024 31 December 2023
£'000 £'000
Forward transactions 63,268 51,966
Spot transactions 32,590 31,791
Option contracts 11,650 7,823
Payments, accounts and advisory fees 25,205 18,676
Platform fees 2,887 186
Total 135,600 110,442
Forward, spot and option revenues are accounted for under IFRS 9 - Financial
Instruments, and the remaining revenue streams i.e. payments, accounts,
advisory and platform fees fall under IFRS 15 - Revenue from Contracts with
Customers.
The table below discloses non-current assets (excluding financial instruments
and deferred tax) by location:
31 December 2024 31 December 2023
Non-current assets £'000 £'000
Re-presented*
United Kingdom 26,879 29,911
Malta 6,068 5,287
The Netherlands 10,454 11,855
Canada 1,032 1,336
Other 1,713 19
Total non-current assets 46,146 48,408
4. Segmental reporting (continued)
* The 2023 prior year re-presentation relates to the exclusion of derivative
financial assets which has been disclosed separately in line with IFRS 9 (see
note 11).
No information is provided for segment assets or segment liabilities as this
measure is not reported to the chief operating decision makers.
5. Operating profit
Operating profit is stated after charging/(crediting):
31 December 2024 31 December 2023
£'000 £'000
Staff costs 56,596 37,665
Depreciation of owned property, plant and equipment 1,782 1,325
Amortisation of intangible assets* 6,595 3,111
Depreciation of right-of-use assets 2,793 1,939
Rental costs for short-term leases 1,022 897
Loss on disposal of fixed assets 224 8
Gain on disposal of right-of-use asset (93) -
Impairment of intangible assets 3 26
Bad debt expense 508 135
Net foreign exchange (gains)/losses (409) 372
Audit fees
Audit fees in respect of the Group, Company and subsidiary financial 758
statements
896
Non-Audit fees
Fees in respect of CASS Limited Assurance 10 10
Fees associated with the move from AIM to the Main Market 498 -
*Amortisation of intangible assets includes a charge of £6,513k (2023: charge
of £3,121k) relating to internally generated software and a charge of £82k
(2023: credit of £10k) relating to brand and customer relationships.
6. Finance income and expenses
31 December 2024 31 December 2023
£'000 £'000
Finance income
Interest on bank deposits 5,945 4,491
Other interest receivable 108 125
Total 6,053 4,616
Finance expenses
Finance expense on dilapidation provisions (34) (41)
Finance expense on lease liabilities (note 10) (1,200) (793)
Total (1,234) (834)
7. Taxation
Tax charge
31 December 2024 31 December 2023
£'000 £'000
Current tax:
UK Corporation tax on the profit for the year 31,172 24,536
Adjustments relating to prior years (215) (633)
Overseas corporation tax on the profit for the year 744 219
Total current tax 31,701 24,122
Deferred tax
Origination and reversal of temporary differences current year (427) 3,020
Adjustment relating to prior year (885) -
Total deferred tax (1,312) 3,020
Total tax expense 30,389 27,142
Deferred tax has decreased due to the comparatively high level of prior year
investments in assets and the acquisition of Cobase.
Factors affecting tax charge for the year
31 December 2024 31 December
2023
£'000 £'000
Profit on ordinary activities before tax 123,114 115,934
Profit on ordinary activities multiplied by the effective standard rate of UK 30,779 27,244
corporation tax of 25% (2023: 23.5%)
Effects of:
Expenses not deductible for tax purposes 610 561
Unutilised trading losses different tax rates applied in overseas 44 93
jurisdictions
Adjustments relating to prior years (1,101) (633)
Deferred tax not recognised on losses unutilised 57 -
Unutilised trading losses - (102)
Trading losses brought forward - (21)
Total tax charge for the year 30,389 27,142
7. Taxation (continued)
Factors affecting tax charge for the year (continued)
During the year, management identified that a £1.1m deferred tax liability
recognised at 31 December 2023 in relation to the Cobase business had been
overstated and the charge has been corrected in the current year. In addition,
the Group has recognised a deferred tax asset of £0.4m in respect of future
tax deductions for the amortisation of customer lists in Malta. This asset is
expected to be amortised over the next two years.
Deferred tax
The deferred taxation liability is based on the expected future rate of
corporation tax of 25% (2023: 25%) and comprises the following:
31 December 2024 31 December 2023
£'000 £'000
Liabilities
At 1 January 5,305 1,387
UK & overseas tax charge relating to current year from continuing (343) 1,960
operations
UK tax charge relating to current year from acquired operations (971) 1,060
Fair market value at acquisition - 102
Tax credit relating to foreign exchange rate movements - (2)
Tax (credit)/charge on other comprehensive income (330) 798
Total deferred tax liability 3,661 5,305
The UK deferred tax liability as at 31 December 2024 and as at 31 December
2023 principally relates to the tax effect of timing differences in respect of
fixed assets.
Deferred tax - balance
31 December 2024 31 December 2023
£'000 £'000
Liabilities
Fixed asset differences 3,890 4,564
Fair market value at acquisition - 102
Right-of-use assets 2 -
Losses (115) -
Foreign exchange rate movements - 1
Future tax deductions for amortisation of customer lists in Malta (405) -
Gain recognised on hedging instruments 289 638
Total deferred tax liability 3,661 5,305
Losses of €28m (tax effect €4.4m) arose for periods prior the 2023
acquisition of Financial Transaction Services B.V. (Cobase). Under Dutch tax
regulations these losses can be carried forward indefinitely but are only
available for offset against a limited portion of profits in any given year.
Based on the latest forecasts, no material losses are expected to be utilised
in the near term and accordingly no deferred tax asset has been recognised.
Losses in other jurisdictions carried forward for which no deferred tax asset
has been recognised total £0.14m.
7. Taxation (continued)
Deferred tax on each component of other comprehensive income/(expense) is as
follows:
31 December 2024 31 December 2023
Before tax Tax After tax Before tax Tax After tax
£'000 £'000 £'000 £'000 £'000 £'000
Cash flow hedges
(Losses)/gains recognised on hedging instruments (1,318) 329 (989) 3,193 (798) 2,395
Exchange loss arising on translation of foreign operations (2,485) - (2,485) (679) - (679)
Total tax (charge)/credit on other comprehensive income/(expense) (3,803) 329 (3,474) 2,514 (798) 1,716
8. Earnings per share
Basic earnings per share is calculated by dividing the profit for the year
attributable to equity holders of the Parent, by the weighted average number
of ordinary shares in issue during the financial year. Diluted earnings per
share additionally includes in the calculation, the weighted average number of
ordinary shares that would be issued on conversion of any dilutive potential
ordinary shares. The dilutive effect is calculated on the full exercise of all
potentially dilutive ordinary share options granted by the Group.
The underlying calculation excludes the impact of net treasury income on
client funds and other non-underlying items and their tax effect. This
better enables comparison of financial performance in the current year with
comparative years.
31 December 2024 31 December 2023
Pence Pence
Basic earnings per share 215.7p 206.2p
Diluted earnings per share 211.7p 203.4p
Underlying - basic 86.4p 76.7p
Underlying - diluted 84.8p 75.6p
8. Earnings per share (continued)
The calculation of basic and diluted earnings per share is based on the
following number of shares:
31 December 31 December 2023
2024
No. No.
Basic weighted average shares 43,119,507 43,072,098
Contingently issuable shares 818,677 593,955
Diluted weighted average shares 43,938,184 43,666,053
The number of shares which are contingently issuable in respect of a number of
employee incentive schemes will be determined based on the change in market
capitalisation of the Group over a 60 business-day period running from 20
December 2024 to 18 March 2025. For the purposes of diluted EPS shown above
the figure has been determined as if the market condition was finalised at the
balance sheet date i.e. it has been based on the change in market
capitalisation between 20 December 2024 and 31 December 2024.
As set out in note 14, £19.3m of purchases of shares by the Company during
the year, and a further £3.5m post year end had been made otherwise than in
accordance with the Companies Act 2006. The basic and diluted weighted
average number of shares in issue shown above excludes these purchases. Had
these been made in accordance with the legal requirements, the basic weighted
average number of shares would have been 470,609 lower.
As at market close on 18 March 2025, excluding these purchases, the Group had
42,976,487 shares in issue. Had all purchases of shares been in accordance
with the Act, this figure would have been 1,063,556 lower, or 41,912,931.
9. Dividends
31 December 2024 31 December 2023
£'000 £'000
Final Plc dividend for the year ended 31 December 2022 of 11.0p per share - 4,765
Interim Plc dividend for the year ended 31 December 2023 of 3.7p per share - 1,603
Final Plc dividend for the year ended 31 December 2023 of 12.3p per share 5,308 -
Interim Plc dividend for the year ended 31 December 2024 of 4.2p per share 1,776 -
7,084 6,368
All dividends paid by Alpha Group International plc are in respect of the
ordinary shares of £0.002 each.
In addition to the dividends paid to ordinary shareholders of the Group shown
above, the Consolidated Statement of Changes in Equity includes £2,229k
(2023: £2,762k) of dividends paid to subsidiary shareholders.
9. Dividends (continued)
The Directors propose that a final dividend in respect of the year ended 31
December 2024 of 14.0p per share amounting to circa £5,870k will be paid on
23 May 2025 to all shareholders on the register of members on 25 April 2025.
This dividend is subject to approval by shareholders at the AGM and has not
been accrued as a liability in these Financial Statements in accordance with
IAS 10 'Events after the reporting period'.
The Directors have proposed the final dividend having satisfied themselves as
to the adequacy of distributable reserves of the Company as at 28 February
2025.
As noted in Financial Review, the Company has discovered that the interim
dividend for the year ended 31 December 2024 (£1.8m) and the interim
dividends paid on 13 October 2017 and the FY21 interim dividend paid on 8
October 2021 (together £0.7m) were made otherwise than in accordance with the
Companies Act 2006.
As a result, the Company and its Directors at the relevant time could have
claims against the shareholders who received these dividends. The Company has
no intention of pursuing any such claims and the financial statements have
accordingly not been restated for the effect of the distributions made
otherwise than in accordance with the Act.
Instead, the Company is proposing certain resolutions at its forthcoming AGM
to put the Company, its current and former shareholders and its current and
former directors in the position they would have been in, had the dividends
fully complied with the Act. This includes resolutions to appropriate
distributable profits to the dividends that have arisen subsequently. This
also includes entering into deeds of release to release the shareholders who
received these dividends, and the Directors of the Company at the time the
dividends were made, from any liability to repay any amounts to the Company.
The Directors are related parties of the Company and therefore the entry by
the Company into a deed of release in favour of the Directors will constitute
a related party transaction for the purposes of the Listing Rules.
Subsequent to the reporting date, on 28 February 2025, the Company received a
£50m dividend from its subsidiary, Alpha FX Limited. As at that date, the
Company's distributable reserves were £26.9m. Interim Accounts for the
Company have been drawn up to that date and have been lodged with Companies
House as they comprise 'Relevant Accounts' for the purposes of the final
dividend declaration.
10. Right-of-use assets and lease liabilities
Leases where the Group is a lessee are accounted for by recognising a
right-of-use asset and a lease liability except for leases of low value assets
and leases with a term of 12 months or less. The Group has only property
leases.
During the year, the Group signed two new leases for office premises in Italy
and Australia. The Group exited a lease early in Bristol and recognised a gain
on disposal of £92,822 (see note 5).
Right-of-use assets
31 December 31 December 2023
2024
£'000 £'000
At 1 January 20,894 11,848
Additions 1,347 10,954
Additions in relation to business combination - 182
Depreciation charge for the year (2,793) (1,939)
Disposals (164) -
Foreign exchange translation (291) (151)
At 31 December 18,993 20,894
Lease liabilities
31 December 31 December 2023
2024
£'000 £'000
At 1 January 22,720 13,074
Additions 1,288 10,405
Additions in relation to business combination - 182
Disposals (194) -
Finance cost (note 6) 1,200 793
Payments in the year (2,210) (1,572)
Foreign exchange translation (297) (162)
At 31 December 22,507 22,720
31 December 31 December 2023
2024
£'000 £'000
Maturity analysis:
Not later than 1 year 2,180 1,028
Later than 1 year and not later than 5 years 10,661 11,014
Later than 5 years 9,666 10,678
Total lease liabilities 22,507 22,720
11. Derivative financial assets and financial liabilities
31 December 2024 31 December 2023
Derivative financial assets not designated as hedging instruments Notional principal Notional principal
Fair value Fair value Restated2
Restated1
£'000 £'000 £'000 £'000
Forward and option contracts with customers
156,570 4,332,514 99,738 1,939,848
Forward and option contracts with banking counterparties
1,634 140,240 3,043 2,013,748
Other forward contracts 842 54,074 - -
159,046 4,526,828 102,781 3,953,596
31 December 2024 31 December 2023
Derivative financial assets designated as hedging instruments Notional Notional principal
Fair value Principal Fair value
£'000 £'000 £'000 £'000
Forward contracts - - 156 3,913
Swap contracts 2,099 699,831 2,398 825,546
2,099 699,831 2,554 829,459
31 December 2024 31 December 2023
Total Derivative financial assets Notional Notional principal
Fair value Principal Fair value Restated(2)
Restated(1)
£'000 £'000 £'000 £'000
161,145 5,226,659 105,335 4,783,055
31 December 31 December
2024 2023
Fair value Fair value
Restated
Analysis: £'000 £'000
Current 132,446 90,966
Non-current 28,699 14,369
Total derivative financial assets 161,145 105,335
1 See note 12 for details of the prior year restatement.
2 The prior year notional principal has been restated to reflect the correct
GBP notional amounts.
11. Derivative financial assets and financial liabilities (continued)
31 December 2024 31 December 2023
Derivative financial liabilities not designated as hedging instruments Notional Notional principal
Fair value Principal Fair value Restated2
£'000 £'000 £'000 £'000
Forward and option contracts with customers
98,839 3,771,123 37,584 3,293,038
Forward and option contracts with banking counterparties
9,073 2,553,445 2,559 441,478
Other forward contracts - - 67 33,090
107,912 6,324,568 40,210 3,767,606
31 December 2024 31 December 2023
Derivative financial liabilities designated as hedging instruments Notional Notional principal
Fair value Principal Fair value
£'000 £'000 £'000 £'000
Forward contracts - - - -
Swap contracts 863 355,000 - -
863 355,000 - -
31 December 2024 31 December 2023
Total Derivative financial liabilities Notional Notional principal
Fair value Principal Fair value Restated(1)
£'000 £'000 £'000 £'000
108,775 6,679,568 40,210 3,767,606
31 December 2024 31 December 2023
Fair value Fair value
Analysis: £'000 £'000
Current 84,080 34,288
Non-current 24,695 5,922
Total derivative financial liabilities 108,775 40,210
2 The prior year notional principal has been restated to reflect the correct
GBP notional amounts.
11. Derivative financial assets and financial liabilities (continued)
Items that will or may be reclassified to the Consolidated Statement of
Comprehensive Income:
31 December 31 December
2024 2023
Movement in year £'000 £'000
Cash flow hedges
(Losses)/gains recognised on hedging instruments (1,318) 3,193
Tax relating to items that may be reclassified 329 (798)
(989) 2,395
Interest rate swap contracts
The Group has historically operated in a low interest rate environment. Since
Q3 2022, when interest rates started to rise, the Group started to receive a
large amount of interest on its own free cash balances as well as client cash
balances. In line with the Group's treasury policy, we have entered into
interest rate swap contracts to manage interest rate risk.
The interest rate swap contracts designated as hedging instruments relate to
transactions entered into in 2022, 2023 and 2024 to fix the rate of interest
receivable on cash balances held by the Group in respect of its own free cash
balances as well as client cash balances. With the interest rate swap, the
Group receives a fixed rate of interest and pays a floating interest rate
based on SONIA.
The contracts have commencement dates between June 2023 and June 2025 with
expiries between June 2025 and December 2025 for notional amounts of £650m
and between January 2026 and December 2026 for notional amounts of £404m.
Should the contracts no longer qualify for hedge accounting, the deferred
gains/losses in other comprehensive income relating to the Group's own free
cash balances will be reclassified within finance income and those relating to
client cash balances will be reclassified within net treasury income - client
funds. The hedge effectiveness is reassessed monthly and all hedges remained
effective throughout 2024.
The following table analyses other comprehensive income in relation to hedge
accounting:
31 December 31 December 2023
2024
£'000 £'000
At 1 January 2,554 (639)
Net fair value (losses)/gains (1,318) 3,193
At 31 December 1,236 2,554
11. Derivative financial assets and financial liabilities (continued)
The following table shows the effects of hedge accounting on the Statement of
Financial Position and the year-to-date performance for cash flow hedges taken
out to hedge interest rate risk:
Hedging instrument Hedged item
Carrying amount Change in fair
Hedged interest rate risk Notional amount £'000 Assets Liabilities Balance sheet presentation value
£'000 £'000 £'000
As at 31 Dec 2024 1,054,831 2,099 863 Derivatives 1,318
As at 31 Dec 2023 825,546 2,554 - Derivatives (3,193)
No changes in fair value have been taken to the income statement as there has
been no hedge ineffectiveness to date.
Foreign currency forward contracts
The forward contracts designated as hedging instruments relate to hedges
entered into in December 2022 and February 2023 to fix the exchange rate of
interest receivable denominated in dollars and euros. The contracts had
monthly expiries up to January 2024. Upon expiry of the contracts, the
deferred gains/losses in comprehensive income relating to the hedges on the
Group's free cash balances and client cash balances were reclassified to
finance income and NTI - client funds respectively.
12. Trade and other receivables
31 December 2024 31 December 2023
Restated*
£'000 £'000
Trade receivables 4,041 4,237
Other receivables 4,926 4,538
Prepayments 3,748 3,258
Total trade and other receivables 12,715 12,033
Trade receivables consist of invoices owed from clients. Other receivables
consist primarily of accrued interest, amounts held on account with the
Group's broker available for share buybacks and rental deposits. Receivables
are considered current assets and reported at their fair value.
*Current derivative financial assets and trade receivables have been restated
due to several invoices' receivable being incorrectly classified as current
derivative assets. The correction is made by reclassifying the related balance
from derivatives financial assets to trade receivables. The amounts
reclassified as of 1 January 2023 and 31 December 2023 were £1,722k and
£4,237k respectively. There is no impact on net assets for the year.
13. Cash
Cash and cash equivalents comprise cash balances and deposits held at call
with banks for which the Group has immediate access.
Fixed collateral comprises cash held as collateral with banking counterparties
for which the Group does not have immediate access.
Cash balances included within derivative financial assets (see note 11) relate
to the variation margin called by banking counterparties for which the Group
does not have immediate access.
31 December 2024 31 December 2023
£'000 £'000
Cash & cash equivalents 252,468 197,941
Variation margin (note 11) (14,333) 11,125
Fixed collateral 10,063 8,810
Total cash 248,198 217,876
14. Capital and reserves
Share capital and Treasury shares
Ordinary shares Share capital Treasury shares
No. £'000 £'000
Authorised, issued and fully paid
At 1 January 2023 - shares of £0.002 each 42,196,554 84 -
Shares issued on vesting of share option schemes 1,125,259 3 -
At 31 December 2023 43,321,813 87 -
Acquisition of treasury shares* (524,772) - (10,721)
Treasury shares issued on vesting of share option schemes** 234,627 - 4,024
At 31 December 2024 43,031,668 87 (6,697)
In January 2024, Alpha initiated a £20m share buyback programme. In June
2024, a second buyback programme of £20m was implemented which continued to
run into 2025. At 31 December 2024, £10m of this second programme had been
executed.
*During the year, in addition to the £10.7m of treasury share purchases shown
above, £19.3m of purchases of shares by the Company were made otherwise than
in accordance with Companies Act 2006. At 31 December 2024, this amount has
been classified within retained earnings, rather than the Treasury share
reserve. See note 8 for details of the impact of these purchases on the
Company's ordinary shares in issue. Resolutions to release all claims the
Company has against shareholders and Directors in respect of this matter will
be presented to shareholders at the forthcoming AGM.
**In March 2024, the Company issued 234,627 shares from treasury totalling
£4,024,051 following the vesting of shares under the Institutional, Canada,
Alpha Pay and Netherlands share schemes.
On 27 March 2023, the Company issued 1,125,259 new shares following the
vesting of shares under the B, C and E Growth Share Schemes, and the
Institutional, Canada and Alpha Pay share schemes.
15. Other payables and Deferred income
31 December 2024 31 December 2023
Current: £'000 £'000
Other payables 35,735 51,243
Other taxation and social security 1,340 1,455
Accruals 8,672 7,052
45,747 59,750
Non-current:
Provisions 885 875
885 875
Total other payables 46,632 60,625
Other payables consists of margin received from clients. The carrying value of
other payables classified as financial liabilities measured at amortised cost,
approximates fair value.
Deferred income
The changes in the Group's deferred income during the year are as follows:
31 December 31 December 2023
2024
£'000 £'000
At 1 January 7,072 4,924
Recognised as revenue during the year (17,184) (13,470)
Deferred during the year 18,171 15,618
At 31 December 8,059 7,072
16. Business combinations
On 1 December 2023, Alpha Group International plc acquired 86.36% of Financial
Transaction Services B.V., trading as "Cobase", a leading multibank
connectivity platform. Cobase is an innovative, cloud-based provider of bank
connectivity technology that enables corporates to manage their banking
relationships, accounts, and transaction activity via one single interface. In
doing so, the company unlocks significant operational and financial
efficiencies, especially for international businesses with multiple banking
counterparties across the world. Alpha believes there are opportunities to
amplify one another's growth by leveraging and sharing each other's unique
capabilities and experience.
The purchase price allocation (shown in the table below) has now been
finalised and is unchanged from that disclosed in the prior year on a
provisional basis in accordance with IFRS 3 Business Combinations. The initial
consideration for the acquisition was €9.6m (£8.3m) in cash, with the
remaining stake to be acquired via a performance-based earn-out between 2025
and 2028.
The fair value of the net assets acquired on 1 December 2023 is set out below:
Book value Fair value adjustments Fair value
£'000 £'000 £'000
Intangible assets 3,292 980 4,272
Property, plant and equipment 9 - 9
Right-of-use-asset 182 - 182
Trade and other receivables 1,322 - 1,322
Cash and cash equivalents 53 - 53
Trade and other payables (1,354) - (1,354)
Lease liabilities (182) - (182)
Dilapidation provision (63) - (63)
Deferred tax liabilities 143 (245) (102)
Total identifiable net assets 3,402 735 4,137
Non-controlling interest (564)
Goodwill on the business combination 4,707
Discharged by:
Cash consideration 8,280
Goodwill of £4,707k reflects certain intangible assets that cannot be
individually separated and reliably measured due to their nature. These items
include the value of expected synergies arising from the business combination
and the experience and skill of the acquired workforce. The fair value of the
acquired software, brand name and customer relationships identified are
included in intangible assets.
Transaction costs relating to professional fees and integration costs
associated with the business combination in the year ended 31 December 2024
were £486,633 and have been expensed within non-underlying items (note 3).
16. Business combinations (continued)
Included in the Consolidated Statement of Financial Position at 31 December
2023 was redemption liability of £1.9m. This represents the fair value of the
consideration payable to the non-controlling interest of the subsidiary Cobase
on the date that the agreement was entered into, based on the acquisition date
fair value determination. The opposite entry was recognised on acquisition
within the redemption reserve in equity. 25% of the non-controlling interest
is to be acquired each period over a four-year period between 31 December 2025
and 31 December 2028.
During the year, the Group acquired a further 0.6% interest in Cobase, leaving
a residual 13.13% outstanding. The consideration payable for each of the four
tranches to be acquired will be determined based on actual revenue and/or
profit realisation by the Cobase business in the relevant financial year
ending 31 December. The carrying value of the liability has accordingly been
re-assessed at the end of 2024 to be £1.8m, based on the latest budgeted and
forecast revenue and profit estimates for the next four years, discounted at a
rate commensurate with the risk around realisation and time value of money.
The resulting gain of £0.1m has been reflected through operating expenses. As
set out in note 3, this item has been excluded from the definition of
underlying performance on the basis that excluding this amount is critical to
understanding in year and year on year performance of the business.
17. Events after the reporting period
Distributable reserves
As set out in note 14, £19.3m of purchases of shares by the Company during
the year were made otherwise than in accordance with the Companies Act 2006.
In addition, during the period from 1 January 2025 to 12 March 2025, the Group
similarly repurchased £3.5m of shares otherwise than in accordance with the
Act.
Details of the transactions which are affected by this issue (the "Relevant
Purchases") are set out in the below table.
Aggregate number of shares Aggregate price paid (£) Average price per share (£)
Date range
Total for the year ended 31 December 2024 919,945 19,283,343 20.96
1 Jan 2025- 12 March 2025 (inclusive) 143,611 3,447,131 24.00
Total for the period to 12 March 2025 1,063,556 22,730,474 21.37
In addition, and as set out in Note 9, the Company has discovered that the
interim dividend for the year ended 31 December 2024 (£1.8m) and the interim
dividends paid on 13 October 2017 and the FY21 interim dividend paid on 8
October 2021 (together £0.7m) were made otherwise than in accordance with the
Companies Act 2006.
17. Events after the reporting period (continued)
As a result, the Company and its Directors at the relevant time could have
claims against the shareholders who received these dividends. The Company has
no intention of pursuing any such claims and the financial statements have
accordingly not been restated for the effect of the distributions made
otherwise than in accordance with the Act.
Instead, the Company is proposing certain resolutions at its forthcoming AGM
to put the Company, its current and former shareholders and its current and
former directors in the position they would have been in, had the dividends
fully complied with the Act. This includes resolutions to appropriate
distributable profits to the dividends that have arisen subsequently. This
also includes entering into deeds of release to release the shareholders who
received these dividends, and the Directors of the Company at the time the
dividends were made, from any liability to repay any amounts to the Company.
The Directors are related parties of the Company and therefore the entry by
the Company into a deed of release in favour of the Directors will constitute
a related party transaction for the purposes of the Listing Rules.
Subsequent to the reporting date, on 28 February 2025, the Company received a
£50m dividend from its subsidiary, Alpha FX Limited. As at that date, the
Company's distributable reserves were £26.9m. Interim Accounts for the
Company have been drawn up to that date and have been lodged with Companies
House as they comprise 'Relevant Accounts' for the purposes of the final
dividend declaration.
As at 18 March, the Company held distributable reserves in excess of the
amount required in respect of both the historic payments noted above and the
known future committed capital returns in FY25, including the 2024 Final
dividend to be proposed at the forthcoming AGM and the remaining £6m from the
current buyback programme.
Founder incentive grants
On 11 February 2025, Morgan Tillbrook, founder and former CEO of Alpha pledged
1,103,555 ordinary shares (delivered in the form of nil cost options) of 0.2p
each from his personal holding with a total value of circa £28m based on the
closing share price of £25.40 on 11 February 2025. These shares were awarded
to Board directors and members of the senior leadership team to both thank
them for historic performance and incentivise them for future performance.
These shares meet the definition of Share based payments under IFRS 2,
therefore will be treated accordingly moving forward within the financial
statements. The group is in the process of assessing the value and the vesting
period for these awards.
18. Availability of Annual Financial Report
The Group notes that the Annual Report & Accounts for the year ended 31
December 2024 will be posted to Alpha Group International shareholders w/c
14th of April 2025. The document will also be available on the Group's
website at www.alphagroup.com and in hard copy at Brunel Building, 2 Canalside
Walk, London, W2 1DG.
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