REG - Alpha Group Intl PLC - Interim Report
13/09/2023 07:15
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RNS Number : 2302M Alpha Group International PLC 13 September 2023
13 Sept 2023
Alpha Group International plc
("Alpha", the "Company" or the "Group")
Interim Report
Alpha Group International plc (AIM: ALPH), a global provider of financial
solutions dedicated to corporates and institutions, today announces its
Unaudited Interim Report for the six months ended 30 June 2023.
Highlights for H1 2023
Financial Highlights
- Group revenue increased by 20% to £55m (H1 2022: £46m)
- Underlying profit before tax up 9% to £19.6m (H1 2022: £18.0m), and on a
statutory basis increased 194% to £52.4m (H1 2022: £17.8m)(1)
- Underlying profit before tax margin of 35%, whilst continuing with accelerated
investment programme (H1 2022: 39%)(1)
- Basic earnings per share up 163% at 87.8p (H1 2022: 33.3p) and on an
underlying basis decreased by 2% to 33.0p (H1 2022: 33.7p), reflecting
increased UK corporation tax rates
- FX Risk Management revenue increased by 21% to £39m (H1 2022: £32m)
- Alternative Banking revenue increased by 17% to £16m (H1 2022: £14m), and
increased 30% when including deferred revenue from account fees
- Other operating income from interest on client balances of £33m in H1,
driving exceptional statutory profit growth, with average Alternative Banking
client balances in Q2 2023 of £1.9bn and blended average interest rates of
3.8% (Q1 2023: £1.6bn and 2.8%)
- Strong cash and liquidity position with adjusted net cash increasing 25% in
six months to over £142m(2)
- Proposed interim dividend of 3.7 pence per share (H1 2022: 3.4 pence)
Operational Highlights
- FX Risk Management client numbers increased 12% to 1,089 (H1 2022: 975) and
average revenue per client increased by 6%.
- Alternative Banking accounts increased 75% to 5,350 (H1 2022: 3,061)
- Group headcount increased to 430 (H1 2022: 288, H2 2022: 357)
- Launch of Fund Finance offering to the Institutional market in May, with over
£450k contracted revenue generated to date
- Proposed acquisition of Cobase, a leading provider of bank connectivity
technology (post period end)
- Launch of FXRM sales office in Madrid, focused on Spanish-speaking markets
- Opening of second office in Paddington to bring together teams focused on the
Institutional market (on track for October)
(1) Underlying excludes the impact of interest on client funds reported as
Other Operating Income, and share-based payments
(2) Calculation can be seen in the cashflow and balance sheet section of the
Financial Review
Outlook
Whilst we are mindful of macro headwinds, we have proven in H1 that we can
grow strongly despite these, given the resilience and momentum within our
business. Moving into H2, macro headwinds are likely to remain, however as a
result of the strategic diversification of our business, and our performance
to date, we remain confident in delivering full-year results in line with our
expectations.
Enquiries:
Alpha Group International plc Via Alma PR
Morgan Tillbrook, Founder and CEO
Tim Powell, CFO
+44 (0) 20 3100 2000
Liberum (Nominated Adviser and Joint Broker)
Max Jones
Ben Cryer
Kane Collings
+44 (0) 20 7418 8900
Peel Hunt (Joint Broker)
Neil Patel
Paul Gillam
Richard Chambers
+44 (0) 20 3405 0205
Alma PR (Financial Public Relations)
Josh Royston
Andy Bryant
Kieran Breheny
Market Abuse Regulation
This announcement is released by Alpha Group International plc and contains
inside information for the purposes of the Market Abuse Regulation (EU)
596/2014 ("MAR") and is disclosed in accordance with the Company's obligations
under Article 17 of MAR. The person who arranged for the release of this
announcement on behalf of Alpha Group International plc was Tim Powell, Chief
Financial Officer.
Notes to editors
Alpha is a high-tech, high-touch provider of enhanced financial solutions
dedicated to corporates and institutions operating internationally. Working
with clients across 50+ countries, we blend intelligent human capabilities
with new technologies to solve complex problems across three key areas: FX
risk management, global accounts and mass payments.
Key to our success is our team - over 350 people based across seven 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, have enabled us to make a substantial
and enduring difference to our clients, and deliver a growth story to match.
Overview
In the first six months of this year, both our Corporate and Institutional
markets have faced significant external headwinds. Despite these challenges,
we have continued to deliver in line with expectations, with Group revenue
increasing by 20% against the same period last year to £55m (H1 2022: £46m),
and rising 25% when including deferred revenue from Alternative Banking
account fees (which are invoiced but not yet recognised as revenue).
This performance has been underpinned by the strategic steps we have taken to
diversify our business across geographies, product offerings and client types,
as well as the strength of our highly differentiated service offerings. In our
institutional markets our FX hedging business has benefitted from increasing
levels of cross-selling with our Alternative Banking and Fund Finance
divisions, whilst our Alternative Banking division has continued to grow its
account numbers and revenues as the value of its product offering becomes
increasingly recognised. Meanwhile, in our corporate markets, whilst the rate
of growth in our UK business has been impacted by macroeconomic factors, this
has been counterbalanced by our increasingly global footprint, which is the
result of the strategic investments we have made in new international offices
over the past five years.
In addition to the resilient underlying performance, we also generated a
further £33m in other operating income, as interest rates and the adoption of
our alternative banking solution both continued to increase, helping to
support a 25% increase in our adjusted net cash figure of £142m at the period
end (FY 2022: £114m).
Both our divisions continue to make good progress against their strategies and
are proving they can deliver attractive levels of sustainable growth, even in
testing environments. Moving into H2, this is giving us the confidence to
continue investing in scaling our business for the long term and ensure we
have the foundations in place to deliver on our ambitions.
FX Risk Management ("FXRM")
Read an overview of our offering here
(https://www.alphagroup.com/download/10162/)
H1 Highlights
- 21% revenue growth to £39m (H1 2022: £32m)
- Client numbers increased to 1,089 (H1 2022: 975)
- 29% increase in FXRM Front Office headcount to 117 (H1 2022: 91)
- 6% increase in average annual revenue per client
- Underlying profit before tax margin of c. 35%
FXRM Business Environment
When faced with supply chain shortages in 2022, many corporates overstocked
and therefore entered H1 2023 with excess inventory. In H1 2023, however,
supply chain pressures have fallen to their lowest levels since records
began(1), and this, combined with the increased cost of borrowing and macro
uncertainty, means we saw companies in H1 taking a more short-term and
conservative approach to their sales forecasts, the amount of stock they hold,
and consequently their future orders. Even for companies that don't hold
inventory (such as those in the services sector), the macro uncertainty has
resulted in a noticeably more conservative approach to forecasting and thus
hedging. As a division that helps clients hedge their orders and forecasts,
the combination of the above factors has temporarily reduced our corporate
clients' appetite for FX hedging contracts which has been more pronounced
across our larger UK client base.
(1) Federal Reserve Bank of New York, Global Supply Chain Pressure Index
(https://www.newyorkfed.org/research/policy/gscpi#/interactive)
FXRM Performance
Collectively our FXRM division delivered revenue growth of 21% in H1, with
client numbers increasing from 1,047 to 1,089 in the half (H1 2022: 975).
These divergent growth rates reflect a continued focus on larger, higher
revenue potential businesses, as well as an evolution of our credit appetite
in response to the macro environment, resulting in a number of clients having
hedging facilities removed or reduced over the past 18 months. Consequently,
average revenue per client has increased by 6% in the last twelve months.
As we grow our headcount, Front office productivity is a key metric for us. We
track this by looking at the total cumulative tenure of our Front Office,
compared to our revenues. The graph below shows that we have been able to
maintain productivity despite both the market headwinds, and experienced sales
people moving into roles focused on leading international expansion and/or the
growth and development of our Front Office teams. When we take into account
new joiners, whose contribution in their first year is naturally lower than
more experienced colleagues, this is even more pronounced.
FXRM Front Office Productivity
Alongside this performance, we have continued to invest strongly in the growth
of our FXRM global locations and teams, and have not let temporary headwinds
dampen our long-term ambitions, with Front Office headcount increasing in the
half by 15 people to 117 (FY 22: 102). Our decision to continue investing
despite these headwinds means we have experienced a short-term reduction in
profit before tax margins within FXRM, from 39% in FY 2022 to 35% in H1. We
do, however, expect this to unwind as macro conditions improve, hedging
activity resumes, our investments mature, and our Front Office hires progress
along their learning curves.
Corporate FXRM(2)
Despite the subdued backdrop, our Corporate FXRM revenues continued to grow;
revenue from forwards was broadly flat and revenue from spot contracts (which
are inherently lower-margin) increased by almost 50%, reflecting the strength
and relevance of our service throughout different economic cycles. Breaking
this performance down, revenue for our UK Corporate office was broadly flat,
but has undoubtedly been the most impacted by the current environment, and
because it has the largest client base, has also been affected the most by the
adjustments to our credit appetite. Meanwhile, our newer overseas offices all
delivered year-on-year revenue growth, except for Toronto, which was expected.
We are, however, pleased to report that Toronto has resumed its growth
trajectory, with revenues increasing in H1 2023 against H2 2022.
Corporate FXRM Product Expansion | Acquisition of Cobase
To date, our corporate teams have been helping businesses more effectively and
efficiently manage their finances through a product suite that is
predominantly focused on FX risk management and payments. In the fourteen
years that we have been helping corporates solve challenges around these
areas, we have also gained first-hand knowledge of other challenges that we
could be solving for them, but have lacked the appropriate product set to do
so. One particularly common challenge is the difficulty international
businesses face managing multiple bank accounts and providers across different
countries - a problem that compounds as they become larger and more global.
Here, the solutions available in the market have traditionally been provided
by Treasury Management Systems ("TMS"). Such systems are focused on
streamlining and centralising cash management functions by providing greater
connectivity and automation. In our experience, however, uptake within our
core target market has been low as the time, cost, resource, and technological
expertise required to implement and manage them outweighs their perceived
benefits. In short, a traditional TMS is "inappropriate" for most of our
target market, and research of our existing client base has confirmed this,
with less than 10% using one.
This is a dynamic we have been aware of for a while and we believed that our
target market would benefit considerably from a more flexible and accessible
form of TMS. Ultimately, building such a system ourselves would have
represented a significant undertaking and distraction from the growth of our
core business and required knowledge and expertise that we did not have. A
company that did have the capability to provide this, however, was Cobase - an
innovative provider of bank connectivity technology based in Amsterdam who had
been developing its product for over six years and invested in excess of
€20m.
As per our announcement on 12 September, we have entered into a conditional
agreement to acquire circa 85% of Cobase for an initial consideration of
€9.4m (£8.0m) in cash, with the remaining stake to be acquired via a
performance-based earn-out between 2025-2028. More details about the company
and our investment rationale can be found within that announcement here
(https://www.londonstockexchange.com/news-article/ALPH/acquisition-of-cobase/16119617)
. We are excited by the prospect of having their team and technology as part
of the Alpha Group, and over time believe the offering they have built will
provide a significant value-add to our target market, and enable us to become
increasingly more integrated with our clients whilst also enabling us to
attract new types of clients for whom bank connectivity is an initial
purchasing driver. Alongside its bank connectivity technology, key features of
Cobase's offering include a Central Payments Hub, as well as a Cash Management
and Treasury Management module. The company's current revenue is solely from
SaaS subscription fees, generating recurring revenues of circa £2m per annum.
It has a client base of circa 100 corporate groups across the world,
reflecting over 50% growth in the last 12 months.
(2 )Corporate FXRM refers to our seven Corporate offices across London,
Bristol, Amsterdam, Sydney, Toronto, Milan and Madrid. It does not include our
Institutional FXRM office in London.
Institutional FXRM
Our Institutional FXRM offering has continued to show particularly strong
growth over the period, with revenue increasing by 56% to £12.6m (H1 22:
£8.1m). This performance is particularly encouraging given the headline
contraction in the alternative investment market as a whole, and ultimately
reflects the team's growing reach as well as cross-selling opportunities
through the Group's alternative banking solution coming into fruition.
As we expand our offering to provide a whole-product solution to the
Institutional marketplace, we expect our Institutional FXRM team to continue
to benefit strongly from increased levels of awareness, cross-selling, and the
attractiveness of having an increasingly comprehensive solution for
alternative investment funds. At the same time, the strong levels of cash
generation created from these products is also enabling us to provide larger
hedging facilities to support larger funds, whilst also invest in new
offerings such as fund finance (as covered later).
Alternative Banking
Read an overview of our offering here
(https://www.alphagroup.com/download/10163/)
H1 Highlights
- 17% revenue growth to £16m (H1 2022: £14m), increasing to 30% when including
the deferred revenue from account fees (H1: 2023 £7m, H1 2022: £4m)
- Underlying profit before tax margin of c. 36%
- Account numbers increased to 5,350 (H1 2022: 3,061, FY 2022: 4,200)
- 70% growth in headcount to 214 (H1 2022: 126, FY 2022: 171)
- Technology roadmap delivering ahead of schedule and driving a step change in
operational gearing
- Record month for number of new accounts in August 2023 (363)
Alternative Banking Business Environment
Across the alternative investment market globally, the decline in deal
activity in the second half of 2022 has continued into 2023, with Preqin
reporting that both deal volumes and flows were significantly down in Q1 and
Q2 against the same periods last year, across all of the key asset classes we
serve. This backdrop has meant lower demand for new accounts and less payments
or FX spot transactions made.
At the same time, rising interest rates have meant that banks are generating
more income from the investment funds that hold accounts with them. This has
meant that banks have reduced their offboarding of alternative investment
clients, as their cost to serve them has for now been offset by the interest
income they are receiving (most of which is not being passed onto clients).
With funds less concerned about offboarding and facing numerous other
challenges in this environment, this has understandably pushed account
migrations down the priority list for both fund managers, and also the service
providers that support them, and who need a good reason to suggest a migration
to the fund managers. New SPV creation may be slower in the current
environment, but in the long-term remains an enormous opportunity in its own
right, with new SPVs opened every year, as existing SPVs come to the end of
their lifecycles.
Alternative Banking Performance
Despite these challenging market conditions, we delivered two record quarters
for new accounts, and revenue increased 17% in H1 against the same period last
year. In addition, deferred revenues from account fees grew from £4.9m as at
FY 2022 to £7.0m, which provides further confidence and visibility going
forward. When taking into account deferred revenue from account fees, growth
would be 30%. We also increased our account numbers by 1,150 during H1,
bringing our total to 5,350, and despite the market contracting significantly,
the vast majority of these accounts came from new SPVs, demonstrating the
attractiveness of our product offering.
Whilst the growth in account numbers is strong against the context of the
current climate, at the start of the year we were expecting growth to be even
stronger, with a total of 8,400 accounts forecasted for 2023. Given the
reported slowdown within the alternative investment market and our subsequent
pivot away from existing account migrations, we now expect a number of circa
7,000 accounts to be more likely for FY 2023. Our fundamentals remain strong,
and we are continuing to see good levels of growth in accounts onboarded, even
in this tougher environment; we had a record month in August for new accounts
(363), and at the time of writing, are on track for another record month in
September. As market conditions unwind, we therefore expect to see this trend
accelerate and the rate of new accounts onboarded to increase further. It is
also worth noting that as account fees are deferred over 12 months, the impact
on our FY 2023 revenue will be broadly immaterial. Equally, we have made
excellent operational progress throughout H1, particularly in the areas of
compliance and technological automation, to the extent that we anticipate we
will capture greater economies of scale as we grow. Indeed, our technology
roadmap is running ahead of schedule, and we expect to see the significant
benefits of this on operational gearing in H2, as shown by the continued
improvement in scalability in the chart below.
Ultimately, the operational progress we have made to date means our
market-leading offering is even stronger than it was at the start of the year,
and we continue to deepen our relationships with fund managers, service
providers and fund administrators. As market conditions and activity levels
improve, we will be well-placed to capitalise on this.
Fund Finance
Our fund finance offering was launched publicly in May (read announcement here
(https://polaris.brighterir.com/public/alpha_group/news/rns/story/ryeo13w) )
and is already surpassing our early expectations, having generated over £450k
in contracted revenue to date. By combining deep expertise in fund finance
with Alpha's high-tech, high-touch ethos, we enable borrowers to obtain
facilities quickly, efficiently and with the confidence that the terms they
receive are competitive and right for them. Our offering has also been built
in a modular manner, enabling clients to pick and choose the level of support
that best meets their requirements or level of experience. The offering is
most easily understood when we break it down into three parts - i) diagnosis,
ii) a lender screening tool and iii) a structuring and execution offering.
i) Diagnosis
The first part of our offering is focused on helping clients identify the most
optimal borrowing facility for them. To do this, we work in consultation with
each client to create a borrowing profile based on their individual objectives
and circumstances. We then align this borrowing profile to a facility that
will work best for them, with consideration not just for the type of the
facility (e.g. NAV, Sub-Line) but also how it might be structured and the
specific terms. The experience of the borrower will typically determine the
level of involvement required at the diagnosis phase - experienced borrowers
will usually have a good understanding of their requirements and therefore
only require a lightweight approach, whilst first-time borrowers benefit from
more of a "deep dive" that may evaluate the pros and cons of a number of
options.
Once we have established the optimal facility for the client, we are then able
to input this information into our lender screening platform, which is the
second phase of our offering.
ii) Lender Screening Platform
With over 300 lenders in the marketplace, each with their own unique lending
appetites, finding a suitable fund finance partner is a difficult and
time-consuming process for borrowers. Furthermore, even once a potential
partner has been identified, unless borrowers are prepared to engage with
multiple lenders, it is very difficult for them to validate which is the best
for them.
Using Alpha's lender screening platform, borrowers can now screen their
specific borrowing requirements (identified during our diagnosis phase) across
a current (and growing) marketplace of over 300 lenders. In doing so, we are
significantly streamlining a process that would typically take months, or
potentially never be undertaken. Whether the client is a first-time borrower
or an experienced one, this represents a significant value add.
After using our screening tool, borrowers will receive a report of relevant
lenders. From here, we then also provide a matching service, where we will
secure heads of terms for a facility from one or more lenders.
iii) Structuring & Execution
The third part of our offering is focused on using the fund finance team's
knowledge and expertise (built-up over 25 years of working in the industry) to
negotiate, structure and execute the client's facility on their behalf. Here
our focus is on ensuring the process is as efficient as possible for the
borrowers and that they can feel confident they are receiving the right
facility on the right terms.
Whilst the benefits outlined above are focused on borrowers, the lenders that
feature on Alpha's fund finance platform also stand to benefit considerably
from Alpha's solution, as it provides them with fast access to a large and
growing pool of pre-qualified borrowers, and streamlined administration of
their loans.
With its focus on the alternative investment market, our fund finance offering
has, and will continue to, benefit from cross-selling opportunities with
clients that come from Alpha's Institutional FXRM and Alternative Banking
teams. At the same time, the Fund Finance team are already reciprocating this
by creating new business opportunities of their own, which can then be
cross-sold Alpha's other services.
Our fund finance offering generates revenues from the fees it charges for each
of its respective modules, and similar to our FXRM offering, we do not charge
for our diagnosis phase. Due to the current size of these revenues and the
division's relationship with the Alternative Investment industry, these
revenues are currently recognised within Alternative Banking.
Our expansion into fund finance is another important part of our vision to
build a 'whole product' solution to the alternative investment market, in
order that we can cater for the full spectrum of their needs.
New Dual HQ
With our Group UK headcount approaching over 240, space within our existing
London HQ has run out, with many of our operations teams now working remotely
on rotation. We are therefore looking forward to launching a neighbouring HQ
in October for the teams focused on our Institutional marketplace, which
comprises c. 120 people across Alternative Banking, Institutional FXRM and
Fund Finance.
Given the shared clients, synergies and cross-selling opportunities between
these teams, organising ourselves around these markets is a natural evolution
for the Group and will support us in assembling an ecosystem of products and
services focused on the institutional market that can cater for a growing
range of their traditional banking needs - a bank alternative, for
Alternatives.
The same will become true for our Corporate teams who will remain in our
existing office, with our Central Services teams having the luxury of moving
between the two, given they are only a stone's throw apart.
Balance Sheet & Capital Allocation Update
Average Alternative Banking client balances in Q2 of £1.9bn and a blended
average interest rate of 3.8% (Q1 2023: £1.6bn and 2.8%) resulted in over
£33m of other operating income, helping to grow our adjusted net cash by 25%
to over £142m at the period end. With more clients adopting our alternative
banking solution, and interest rates at current levels, this is expected to
remain a significant tailwind for the Group, creating opportunities for new
and accelerated strategic investments, as has already been detailed in this
report. As a reminder, the Group's priorities for capital allocation fall into
four key areas:
i) Cash for existing investments
We continue to use our cash to invest in both our FXRM and Alternative Banking
divisions. Corporate FXRM has a fifteen-year track record of trading, and
therefore the appropriate levels of investment required to grow are more
forecastable. Our Institutionally focused divisions (Institutional FXRM,
Alternative Banking, Fund Finance), however, are in a far more nascent stage
and could see a significant step change in demand resulting from increasing
cross-selling and an improvement in the alternative investment market
conditions, which would therefore increase capital requirements. For example,
our Institutional FXRM division is already benefitting from increased
cross-selling from Alternative Banking and Fund Finance. This is enabling us
to attract not only more clients, but also increasingly larger ones, who then
often hold larger balances and require larger hedging facilities. As this
continues, we will likely:
I) be investing more in our teams and infrastructure to support this demand;
II) have more capital tied up in hedging facilities;
III) have more capital tied up as regulatory capital against the client balances we
hold; and
IV) want to have sufficient cash set aside to invest in further organic
opportunities in this market, through, for example, expansion into new
products like fund finance.
Given our Institutional-focused divisions have all performed strongly in a
market that has significantly contracted, when the market returns to normal,
this could further compound our growth potential and demand on our capital.
We, therefore, believe it is prudent to ensure we have sufficient cash kept
aside to ensure we can capitalise not only on the opportunities we have now,
but also have the ability to accelerate investment in the future when there is
scope for greater upside.
ii) Cash for regulatory capital
The Group is required to set aside regulatory capital of 2% against the client
balances it holds as part of its global accounts solution. Further regulatory
capital is required when entering into forward and derivative trades driven
from various risk factors, and the volume of our trading positions in the
market.
As our business grows and the average size of our clients increases, both the
balances we hold for our global accounts solution and the size of forward and
derivative trades we enter into are becoming larger, resulting in a growing
requirement for regulatory capital.
iii) Cash for inorganic investments
The Group has an appetite to explore potential M&A that may amplify or
accelerate our offering. Whilst our firm intention is to remain an organic
growth business, we recognise there are opportunities to accelerate our
product development and expand our offerings through the acquisition of
high-quality technology companies, such as the recent acquisition of Cobase.
iv) Cash for confidence
As a financial services business handling large amounts of client money, the
strength of our balance sheet is a key consideration for clients looking to
work with us. Furthermore, the larger our clients become, the greater
(typically) their expectations are for how large our balance sheet needs to
be. Maintaining a strong balance sheet is therefore important in ensuring we
can continue to move up the 'food chain' and win the business of larger
clients.
Summary
Alongside allocating capital to grow the business, the Group intends to
continue with its progressive dividend policy. When taking all of the above
into consideration, we believe the Group's current cash position creates
significant return-enhancing opportunities. We will of course review our cash
position on a regular basis, and if we feel it becomes excessive, will look to
adjust.
Financial Review
In the six months to 30 June 2023 revenue from operating activities increased
by 20% over the prior period to £55.5m. FX Risk Management revenue grew by
21% to £39.1m, with client numbers increasing in the period from 1,047 to
1,089 (30 June 2022: 975). Alternative Banking revenue grew by 17% to £16.2m.
The number of client accounts opened at the end of the period increased in the
period from 4,200 to 5,350 (30 June 2022: 3,061). Including deferred income
relating to the annual accounts fees Alternative Banking revenue growth would
have been 30% (deferred revenue H1 2023: £7.0m, H1 2022: £4.0m).
*FXRM London Office includes Corporate & Institutional FXRM
Interest earned on client balances in the six months was £33m (H1 2022:
£nil), £30m of which related to our Alternative Banking business.
Alternative Banking client balances were £1.9bn in Q2 and £1.6bn in Q1, with
an effective interest rate of 3.8% and 2.8% respectively.
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 interest on client
funds, (other operating income), and share-based payments. On this basis, the
underlying profit before tax in the year increased by 9% to £19.6m (H1 2022:
£18.0m). Statutory profit before tax increased by £34.6m to £52.4m (H1
2022: £17.8m).
In the six months to 30 June 2023 the investment programme has continued,
including the launch of the Spain office in March 2023 and ongoing
improvements to our technology and product offerings. A total of 73 new team
members were added in the period primarily focused on business development,
client services and compliance, taking our total Group headcount to 430 (H1
2022: 288, FY 2022: 357).
The underlying profit before tax margin for the period was 35% (FY 2022: 39%)
reflecting the increased investment in our cost base as well as subdued market
conditions. If the impact of the deferred account fee revenue is included, the
underlying profit before tax margin is 42% (FY 2022: 43%).
* Corporate division is primarily London but also includes other offices not
disclosed elsewhere (Bristol, Madrid, Milan, and Sydney).
** For the purpose of deriving margins for ABS and FX Risk Management, the
cost base of the Institutional division has been allocated based on revenue.
The effective tax for the period of 22.5% (FY 2022 of 17.3%) has been impacted
by the increase to the UK corporation tax rate in April 2023 and lower R&D
tax credits with Alpha now being designated a 'large company'.
Underlying basic earnings per share decreased by 2% (0.7p) in the period to
33.0p (H1 2022: 33.7p) primarily due to a 3.2p decrease resulting from the
higher corporation tax rate in the UK. Basic earnings per share were up 163%
at 87.8p (H1 2022: 33.3p).
Cash flow and Balance sheet
In the six months ended 30 June 2023, 60% of the revenue was derived from
products where the revenue is converted to cash within a few days of the trade
date (H1 2022: 62%). Including other operating income, cash conversion in H1
2023 increased to 74%.
On a statutory basis, net cash and cash equivalents increased in the six
months to 30 June 2023 by £5.8m to £142.6m. The Group's statutory cash
position can fluctuate significantly from period to period due to the impact
of changes in the collateral received from clients, early settlement of
trades, or the unrealised mark to market profit or loss from client swaps,
resulting 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 below which
excludes the above items.
In the six months to June 2023 adjusted net cash on this basis has increased
by £28m to £142m. This represents the net impact of the cash conversion from
trading in the period.
30 June 23 30 June 22 31 Dec 22
£m £m £m
Net cash & cash equivalents 142 126 137
Variation margin paid to banking counterparties 50 14 45
192 140 182
Margin received from clients & client held funds* (59) (57) (70)
Net MTM timing loss from client drawdowns and extensions with trade 9 14 2
receivables
Adjusted net cash** 142 97 114
* Included in 'other payables' within 'trade and other payables'
** Excluding collateral received from clients, early settlements and the
unrealised mark to market profit or loss from client swaps
As a result of the strong growth in the period, total net assets increased
from £144.5m at 31 December 2022 to £169.1m.
Dividend
The Board is pleased to declare an interim dividend of 3.7 pence per share
(2022: 3.4 pence). The interim dividend will be payable on 20 October 2023 to
shareholders on the register at 22 September 2023. The ex-dividend date is 21
September 2023.
Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
six months to six months to year ended
30 June 2023 30 June 2022 31 Dec 2022
Note £'000 £'000 £'000
Revenue 3 55,459 46,144 98,332
Other operating income 33,338 - 9,278
Operating expenses (38,703) (28,187) (60,722)
Operating profit 4 50,094 17,957 46,888
Underlying operating profit 17,240 18,109 38,274
Other operating income 33,338 - 9,278
Share-based payments expense (484) (152) (664)
Finance income 5 2,658 93 784
Finance expenses 5 (313) (240) (458)
Profit before taxation 52,439 17,810 47,214
Underlying profit before taxation 19,585 17,962 38,600
Other operating income 33,338 - 9,278
Share-based payments expense (484) (152) (664)
Taxation 6 (11,813) (2,931) (8,164)
Profit for the period 40,626 14,879 39,050
Attributable to:
Equity holders of the parent 37,601 13,866 36,372
Non-controlling interests 3,025 1,013 2,678
Profit for the period 40,626 14,879 39,050
Other comprehensive (loss)/income:
Items that may be reclassified to the profit or loss:
Exchange (loss)/gain on translation of foreign operations (983) 515 1,382
Loss recognised on hedging instruments
Tax relating to items that may be reclassified (11,661) - (639)
2,915 - 160
Total comprehensive income for the period 30,897 15,394 39,953
Attributable to:
Equity owners of the parent 27,872 14,381 37,275
Non-controlling interests 3,025 1,013 2,678
Total comprehensive income for the period 39,953
30,897 15,394
Earnings per share attributable to equity owners of the parent (pence per
share)
- basic 7 87.8p 33.3p 86.8p
- diluted 7 86.8p 32.4p 83.8p
- underlying basic 7 33.0p 33.7p 70.1p
- underlying diluted 7 32.6p 32.7p 67.7p
Consolidated Statement of Financial Position
Unaudited as at Unaudited as at Audited at
30 June 2023 30 June 2022 31 Dec 2022
Note £'000 £'000 £'000
Non-current assets
Intangible assets 7,348 3,779 4,814
Property, plant and equipment 5,724 2,720 3,248
Right-of-use assets 10,869 7,147 11,848
Derivative financial assets 28,596 35,000 27,819
Deferred tax asset 6 667 - -
Total non-current assets 53,204 48,646 47,729
Current assets
Cash and cash equivalents 10 142,633 125,952 136,799
Derivative financial assets 105,103 106,666 99,119
Other receivables 9 8,291 4,207 6,821
Fixed collateral 10 9,572 3,519 4,726
Total current assets 265,599 240,344 247,465
Total assets 318,803 288,990 295,194
Equity
Share capital 12 87 84 84
Share premium account 58,014 53,252 53,513
Capital redemption reserve 4 4 4
Merger reserve 667 667 667
Retained earnings 105,082 63,379 84,220
Translation reserve 275 391 1,258
Equity attributable to equity holders of the parent 164,129 117,777 139,746
Non-controlling interests 4,979 3,434 4,707
Total equity 169,108 121,211 144,453
Current liabilities
Derivative financial liabilities 40,598 82,065 42,764
Other payables 11 66,614 67,562 77,272
Deferred income 6,982 4,045 4,924
Lease liability 1,549 450 1,407
Current tax liability 8,609 2,758 3,781
Total current liabilities 124,352 156,880 130,148
Non-current liabilities
Derivative financial liabilities 14,255 1,512 7,317
Other payables 11 244 - 222
Deferred tax liability 6 - 1,291 1,387
Lease liability 10,844 8,096 11,667
Total non-current liabilities 25,343 10,899 20,593
Total liabilities 149,695 167,779 150,741
Total equity and liabilities 318,803 288,990 295,194
Consolidated Cash Flow Statement Unaudited Unaudited Audited
six months to six months to year ended
30 June 2023 30 June 2022 31 Dec 2022
Note £'000 £'000 £'000
Cash flows from operating activities
Profit before taxation 52,439 17,810 47,214
Other operating income (33,338) - (9,278)
Finance income (2,658) (93) (784)
Finance expense 313 240 458
Amortisation of intangible assets 1,254 725 1,573
Intangible assets written off - - 43
Depreciation of property, plant and equipment 542 380 764
Depreciation of right-of-use assets 784 512 1,154
Property, plant and equipment written off 1 - 50
Share-based payment expense 484 152 664
Decrease/(increase) in other receivables 444 (663) (1,547)
(Decrease)/increase in other payables (8,600) 29,416 40,006
(Increase) in derivative financial assets (6,761) (65,780) (51,052)
Decrease in financial assets at amortised cost - 5,803 5,803
(Decrease)/increase in derivative financial liabilities (6,889) 39,135 5,000
(Increase) in fixed collateral (4,846) (13) (1,220)
Cash (outflows)/inflows from operating activities (6,831) 27,624 38,848
Other operating income received 30,980 - 7,490
Tax paid (6,126) (3,790) (7,486)
Net cash inflows from operating activities 18,023 23,834 38,852
Cash flows from investing activities
Payments to acquire property, plant and equipment (3,017) (775) (1,739)
Payment to acquire right-of-use assets - - (46)
Proceeds from the sale of property, plant and equipment - 2 -
Expenditure on intangible assets (3,946) (1,509) (3,435)
Net cash (outflows) from investing activities (6,963) (2,282) (5,220)
Cash flows from financing activities
Issue of ordinary shares by Parent Company 490 996 996
Issue of shares to non-controlling interest in subsidiary undertakings 198 - 46
Dividends paid to equity owners of the Parent Company (4,765) (3,375) (4,810)
Dividends paid to non-controlling interests (2,111) (1,272) (1,877)
Payment of lease liabilities- principal (428) (305) (891)
Payment of lease liabilities- interest (285) (210) (452)
Net interest received 2,658 7 729
Net cash (outflows) from financing activities (4,243) (4,159) (6,259)
Increase in net cash and cash equivalents in the period 6,817 17,393 27,373
Net cash and cash equivalents at beginning of period 136,799 108,044 108,044
Net exchange (loss)/gain (983) 515 1,382
Cash and cash equivalents at end of period 10 142,633 125,952 136,799
Consolidated Statement of Changes in Equity
Attributable to the owners of the parent
Share premium account Capital redemption reserve
Share capital Merger reserve Retained earnings Translation reserve Non-controlling interests
Total Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 2021 82 50,783 4 667 54,189 (124) 105,601 4,193 109,794
Profit for the period - - - - 36,372 - 36,372 2,678 39,050
Other comprehensive income - - - - (479) 1,382 903 - 903
Transactions with owners
Shares issued on vesting of share option scheme 2 - - - (2) - - - -
Issue of shares to non-controlling interests in subsidiary undertakings - - - - - - - 46 46
Issue of shares in relation to subsidiary earnout - 1,906 - - (1,801) - 105 (105) -
Forfeiture of shares in subsidiary - - - - 87 - 87 (228) (141)
Shares issued in relation to SAYE share scheme - 824 - - - - 824 - 824
Share-based payments - - - - 664 - 664 - 664
Dividends paid - - - - (4,810) - (4,810) (1,877) (6,687)
Balance at 31 December 2022 84 53,513 4 667 84,220 1,258 139,746 4,707 144,453
Profit for the period - - - - 37,601 - 37,601 3,025 40,626
Other comprehensive income - - - - (8,746) (983) (9,729) - (9,729)
Transactions with owners
Shares issued on vesting of share option scheme 2 - - - (2) - - - -
Issue of shares to non-controlling interests in subsidiary undertakings - - - - - - - 198 198
Issue of shares in relation to subsidiary earnout 1 4,501 - - (3,710) - 792 (792) -
Forfeiture of shares in subsidiary - - - - - - - (48) (48)
Share-based payments - - - - 484 - 484 - 484
Dividends paid - - - - (4,765) - (4,765) (2,111) (6,876)
Balance at 30 June 2023 87 58,014 4 667 105,082 275 164,129 4,979 169,108
Notes to the Consolidated Financial Statements
1. Corporate information
The Company, Alpha Group International plc, is a public limited company having
listed its shares on AIM, a market operated by The London Stock Exchange, on 7
April 2017. The Company is incorporated and domiciled in the UK (registered
number 07262416). The consolidated financial statements incorporate the
results of the Company and its subsidiary undertakings.
2. Basis of preparation
The basis of preparation of this financial information is consistent with the
basis that will be adopted for the full year accounts which will be prepared
in accordance with UK international accounting standards using the measurement
bases specified by UK IFRS for each asset, liability, revenue or expense.
The financial information is presented in Pounds Sterling ("£"), which is the
Group's functional currency, and all values are rounded ("£'000") to the
nearest thousand except where otherwise indicated.
Whilst the financial figures included in this half-yearly report have been
computed in accordance with IFRS applicable to interim periods, this
half-yearly report does not contain sufficient information to constitute an
interim financial report as that term is defined in IAS 34.
This interim financial information has not been audited and the financial
information contained in this report does not constitute statutory accounts
within the meaning of Section 434 of the Companies Act 2006. The year to 31
December 2022 has been extracted from the audited financial statements for
that year.
The Group's financial statements for the year ended 31 December 2022 have been
reported on by auditors, BDO LLP, and have been delivered to the Registrar of
Companies. The auditors report on those financial statements was unqualified
and did not contain statements under Section 498(2) or Section 498(3) of the
Companies Act 2006.
Accounting policies
New accounting policies
There are no new standards and interpretations which became mandatorily
effective for the current reporting period which have had a material effect on
the financial statements of the Group.
3. Segmental reporting
During the period, the Group generated revenue from the sale of forward
currency contracts, option contracts, foreign exchange spot transactions and
fees received from payments collections and cash accounts.
The Group has five reportable operating segments under the provisions of IFRS
8, based on the individually reportable subsidiaries and divisions. These five
segments are:
· Corporate London represents revenue generated by Alpha FX Limited's
Corporate clients serviced from the London head office.
· Institutional represents revenue from Alpha FX Institutional Limited, which
primarily services funds. ·Corporate Toronto represents revenue generated by
Alpha Foreign Exchange (Canada) Limited, serviced from Toronto, Canada.
· Corporate Amsterdam represents revenue generated by Alpha FX Netherlands
Limited, which services corporate clients from Amsterdam, The Netherlands.
· Alpha Pay, a division of Alpha FX Limited which services clients who
require international payments and accounts. The offering is distributed via
our European Corporate offices and Alpha FX Institutional Limited as well as
Alpha Pay's own sales team.
The chief operating decision makers, being the Group's Chief Executive Officer
and the Chief Financial Officer, monitor the results of the operating segments
separately each month. Key measures used to evaluate performance are revenue,
and 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.
In April 2021, the Group decentralised into two divisions: Alternative
Banking Solutions and FX Risk Management. These two divisions are now the key
drivers to the Group strategy and growth of each operating segment. Revenue
for each operating segment has been split by the two divisions, as this
reflects how the chief operating decision-makers manage the business.
Revenue in the table below is in accordance with the methodology used for
preparing the financial information for management, for each operating
segment. Although a proportion of the revenue from EU clients is initially
booked through Alpha FX Europe Limited in Malta, revenue in the table below
has been reallocated to the relevant entity where the sales team is located.
Within 2022, the Group opened offices in Milan Italy, Sydney Australia and
Bristol. In H1 2023, the Group opened an office in Madrid, Spain. All of these
offices service Corporate clients from their local offices. The results of
these new offices are included within the Corporate London Segment. Under
IFRS 8 these segments do not meet the quantitative reporting thresholds. The
revenue of these offices in aggregate was £3.2m (£2.1m H1 2022).
Six months ended June 2023 Corporate London Institutional Corporate Toronto Corporate Amsterdam Alpha Pay Total
£'000 £'000 £'000 £'000 £'000 £'000
FX Risk Management* 19,811 12,584 2,346 4,403 - 39,144
Alternative Banking Solutions** - 2,142 - - 14,173 16,315
Total revenue 19,811 14,726 2,346 4,403 14,173 55,459
Underlying operating profit 4,226 5,091 287 2,499 5,137 17,240
Finance income 2,656 - (1) 3 - 2,658
Finance costs (106) (82) (27) (47) (51) (313)
Underlying profit before taxation 6,776 5,009 259 2,455 5,086 19,585
Other operating income 3,335 15,022 - - 14,981 33,338
Share-based payments (474) (10) - - - (484)
Profit before taxation 9,637 20,021 259 2,455 20,067 52,439
Six months ended June 2022 Corporate London Institutional Corporate Toronto Corporate Amsterdam Alpha Pay Total
£'000 £'000 £'000 £'000 £'000 £'000
FX Risk Management* 19,177 8,058 2,464 1,918 669 32,286
Alternative Banking Solutions** 169 2,872 - 431 10,386 13,858
Total revenue 19,346 10,930 2,464 2,349 11,055 46,144
Underlying operating profit 7,863 4,733 196 943 4,374 18,109
Finance income 93 - - - - 93
Finance costs (92) (40) - (44) (64) (240)
Underlying Profit before taxation 7,864 4,693 196 899 4,310 17,962
Other operating income - - - - - -
Share-based payments (136) (16) - - - (152)
Profit before taxation 7,728 4,677 196 899 4,310 17,810
Year ended December 2022 Corporate London Institutional Corporate Toronto Corporate Amsterdam Alpha Pay Total
£'000 £'000 £'000 £'000 £'000 £'000
FX Risk Management* 43,332 15,133 4,698 5,500 846 69,509
Alternative Banking Solutions** 581 4,703 - 888 22,651 28,823
Total revenue 43,913 19,836 4,698 6,388 23,497 98,332
Underlying operating profit 18,457 7,325 536 3,095 8,861 38,274
Finance income 779 - - - 5 784
Finance costs (146) (83) (31) (68) (130) (458)
Underlying profit before taxation 19,090 7,242 505 3,027 8,736 38,600
Other operating income 468 4,412 - - 4,398 9,278
Share-based payments (632) (32) - - - (664)
Profit before taxation 18,926 11,622 505 3,027 13,134 47,214
*FX Risk Management represents revenue derived from foreign exchange forward,
spot, and option contracts provided to corporate and institutional clients,
primarily for the purpose of hedging commercial foreign exchange exposures.
**Alternative Banking Solutions represents revenues derived from fees and
foreign exchange spot contracts generated from the provision of cross border
payments and accounts to corporates and institutions.
30 June 2023 30 June 2022 31 December 2022
£'000 £'000 £'000
Revenue by product
Foreign exchange forward transactions 24,689 19,307 41,073
Foreign exchange spot transactions 17,503 13,363 29,027
Option contracts 4,680 6,340 9,046
Payments, collections and account fees 8,587 7,134 19,186
Total 55,459 46,144 98,332
Other operating income
Interest is earned on overnight deposits with several credit institutions all
'A' rated with the leading rating agencies. The amount of interest earned is
dependent on several variables:
· The absolute balance we hold, which can move significantly from day-to-day
· The mix of currency balances we hold, and;
· The interest rate environment and rates that can be obtained from credit
worthy institutions.
Interest income is a natural by-product of our accounts solution, and as such
is an uncontrollable income stream for the Group, which would be transitory if
we return to a low interest rate environment. We have therefore chosen to
recognise interest income on client cash balances as 'other operating income',
not revenue.
Material interest income was earned on Alternative Banking Solutions balances
in the period to 30 June 2023. The blended average client balances and
interest rates to 30 June 2023 were:
Q1 23: £1.6bn and 2.8% respectively
Q2 23: £1.9bn and 3.8% respectively
PY 22: £1.6bn and 1.5% respectively (for the 4 months to December 2022).
Interest income was also earned on FX Risk Management clients in the period to
30 June 2023.
4. Operating profit
Operating profit is stated after charging/(crediting):
Six months Six months Year
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
£'000 £'000 £'000
Depreciation of owned property, plant and equipment 542 380 764
Amortisation of internally generated intangible assets 1,254 725 1,573
Depreciation of right-of-use assets 784 512 1,154
Rental cost of short-term leases 377 267 787
Staff costs 19,961 14,699 31,713
Bad debt expense - - 235
Net foreign exchange losses/(gains) 669 312 (274)
5. Finance income and expenses
Six months Six months Year
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
£'000 £'000 £'000
Finance income
Interest on bank deposits 2,591 - 622
Finance income to reverse the discount relating to the Norwegian client - 56 55
Other interest receivable 67 37 107
Total 2,658 93 784
Finance costs
Interest on bank deposits - (30) -
Finance cost on dilapidation provision (28) - (6)
Finance cost on lease liabilities (285) (210) (452)
Total (313) (240) (458)
6. Taxation
Tax charge
Six months Six months Year
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
£'000 £'000 £'000
Current tax:
UK Corporation tax on profit for period 11,231 2,613 8,056
Adjustments relating to prior years - (183) (591)
Incremental Overseas Corporation tax on the profit for the period (279) 272 216
Total current tax 10,952 2,702 7,681
Deferred Tax
Origination and reversal of temporary differences 861 229 483
Total deferred tax 861 229 483
Total tax expense 11,813 2,931 8,164
Deferred Tax
Six months Six months Year
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
£'000 £'000 £'000
Deferred tax:
At 1 January (1,387) (1,061) (1,061)
UK tax charge relating to current year (861) (229) (483)
Tax charge relating to foreign exchange rate movements - (1) (3)
Tax charge on other comprehensive income 2,915 - 160
Total deferred tax 667 (1,291) (1,387)
The Group's effective tax rate at 30 June 2023 was 22.5% (30 June 2022:
16.5%). The increase is predominately due to the increase in UK statutory
rate, additionally, the company no longer qualifying for the enhanced R&D
tax relief for SME.
7. 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 during the 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 Group additionally discloses an underlying earnings per share calculation
that excludes the impact of any non-underlying items such as share-based
payments, other operating income and their tax and minority interest effect,
which better enables comparison of financial performance in the current year
with comparative years.
Six months Six months Year
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
Basic earnings per share 87.8p 33.3p 86.8p
Diluted earnings per share 86.8p 32.4p 83.8p
Underlying - basic 33.0p 33.7p 70.1p
Underlying - diluted 32.6p 32.7p 67.7p
The calculation of basic and diluted earnings per share is based on the
following number of shares:
Six months Six months Year
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
No. No. No.
Basic weighted average shares 42,818,244 41,604,881 41,923,407
Contingently issuable shares 510,747 1,241,027 1,482,706
Diluted weighted average shares 43,328,991 42,845,908 43,406,113
The earnings used in the calculation of basic, diluted and underlying earnings
per share are set out below:
Six months Six months Year
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
£'000 £'000 £'000
Profit after tax for the period 40,626 14,879 39,050
Non-controlling interests (3,025) (1,013) (2,678)
Earnings - basic and diluted 37,601 13,866 36,372
Other operating income (33,338) - (9,278)
Share-based payments 484 152 664
Taxation impact of the above 7,228 - 1,637
Non-controlling interests relating to Other operating income 2,163 - -
Earnings - underlying 14,138 14,018 29,395
8. Dividends
Six months Six months Year
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
£'000 £'000 £'000
Final dividend for the year ended 31 December 2021 of 8.0p per share - 3,375 3,375
Interim dividend for the year ended 31 December 2022 of 3.4p per share - - 1,435
Final dividend for the year ended 31 December 2022 of 11.0p per share 4,765 - -
4,765 3,375 4,810
All dividends paid are in respect of the ordinary shares of £0.002 each.
The Directors propose an interim dividend in respect of the year ended 31
December 2023 of 3.7p per share amounting to £1,602,907 payable on 20 October
2023 to shareholders on the register at 22 September 2023.
9. Other receivables
Six months Six months Year
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
Current: £'000 £'000 £'000
Other receivables 6,256 2,516 4,384
Prepayments 2,035 1,691 2,437
8,291 4,207 6,821
The increase in other receivables is driven by an increase in interest income
receivable, which is generally paid by banking counterparties a month in
arrears.
10. Cash
Cash and cash equivalents comprise cash balances and deposits held at call
with banks.
Fixed collateral comprises of cash held as collateral with banking
counterparties for which the Group does not have immediate access.
Cash balances included within derivative financial assets relate to the
variation margin called against out of the money trades with banking
counterparties.
Six months Six months Year
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
£'000 £'000 £'000
Cash and cash equivalents 142,633 125,952 136,799
Variation margin called by counterparties 49,524 13,981 44,876
Fixed collateral 9,572 3,519 4,726
Total cash 201,729 143,452 186,401
11. Other payables
Other payables consist of margin received from clients and client held funds.
The carrying value of trade and other payables classified as financial
liabilities measured at amortised cost, approximates fair value.
Six months Six months Year
ended ended ended
30 June 2023 30 June 2022 31 Dec 2022
Current: £'000 £'000 £'000
Other payables 58,763 60,834 70,204
Other taxation and social security 1,184 1,836 1,369
Accruals 6,667 4,892 5,699
66,614 67,562 77,272
Non-current:
Dilapidation provision 244 - 222
Total other payables 66,858 67,562 77,494
12. Share capital
The following movements of share capital occurred in the 6 months to 30 June
2023:
Ordinary Nominal
shares value
No. £'000
As at 1 January 2023 - shares of £0.002 each 42,196,554 84
Shares issued on vesting of share option scheme 1,125,259 3
As at 30 June 2023 43,321,813 87
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