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Breakthrough
Year:
Empowering the future
of finance
Alfa Financial Software Holdings PLC
Annual Report and Accounts 2024
2024 Monitor Magazine:
Best Company in Equipment Finance (Innovation), winner
2024 LeasingWorld Gold Awards:
ED&I Trailblazer category, winner
2024 Megabuyte:
18th Best Performing in Mid-Market 50
Investors in People:
Awarded IIP Gold status and Top 20 (of its size)
2025Megabuyte50 awards:
Best Performing Company (Financial Services), shortlisted
2024 plc awards:
Tech Business of the Year, shortlisted
Strategic report
1 Key highlights
2 Our year in review
3 Investment case
4 About Alfa
5 Business model
6 CEO review
10 Market overview
12 Alfa Systems 6
14 Strategy in action
19 Key performance indicators
21 Financial review
25 Environmental, Social
andGovernance
29 Task Force on Climate-
related Financial Disclosures
32 Streamlined Energy and
Carbon Reporting
34 Risk management
37 Principal risks and
uncertainties
46 Stakeholder engagement
49 Viability statement
Corporate governance
52 Chairman’s introduction
53 Code compliance
54 Board of Directors
56 Company Leadership Team
57 Our governance framework
58 Board leadership and
Company purpose
61 Board activities
62 Engaging with our
stakeholders and Section
172 Statement
66 Division of responsibilities
68 Composition, succession
andevaluation
71 Nomination Committee
Report
76 Audit and Risk Committee
Report
83 Remuneration Committee
Report
85 Annual report on
remuneration
100 Directors’ Remuneration
Policy
104 Alignment of Remuneration
Policy
105 Directors’ report
110 Statement of Directors’
responsibilities
Financial statements
112 Independent auditor’s
report
119 Consolidated statement of
profit or lossand
comprehensive income
120 Consolidated statement of
financialposition
121 Consolidated statement of
changesinequity
122 Consolidated statement of
cash flows
123 Notes to the consolidated
financialstatements
151 Company statement of
financial position
152 Company statement of
changes in equity
153 Notes to the Company
financialstatements
Additional information
158 Five-year history
159 Shareholder information
Awards ESG
Alfa ESG:
2024 Sustainability
Progress Report
2024 has been
abreakthrough
yearfor Alfa.
With the ongoing development of Alfa Systems 6, we have
delivered game-changing innovations that empower our
customers to scale faster, operate more efficiently, and adapt
tothe demands of an evolving asset finance landscape.
Our focus on pushing technological boundaries is helping
shapethe future of finance, providing the tools and flexibility
needed to meet tomorrow’s challenges. As we move forward,
ourcommitment to innovation and customer success remains
atthe heart of everything we do.
Setting a new standard with Alfa Systems 6 Contents
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Subscription revenue growth
+18%
2023: +16%
Revenue
£109.9m
2023: £102.0m
TCV
1
£221.3m
2023: £165.3m
Operating profit
£34.3m
2023: £30.1m
Operating profit margin
31%
2023: 30%
EBITDA margin
2
34%
2023: 32%
Closing headcount
502
+5% average headcount
3
Cash
£20.5m
89% conversion
4
Dividends paid
5
£22.1m
2023: £19.7m
1. Total Contract Value. See “Definitions” on page 19 for further information.
2. Earnings before interest, taxes, depreciation and amortisation, as
apercentageof revenue.
3. Over the 12 months to December 2024, compared with 12 months to
December2023.
4. Operating free cash flow conversion. See “Definitions” on page 19 for
furtherinformation.
5. Amounts paid during the financial year.
1
Additional informationCorporate governance
Financial statements
Strategic report
Key highlights
2024
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Looking ahead
With strong momentum,
we are well-positioned
tocontinue delivering
breakthrough innovations
and long-term value.
2023
Pillar 1:
Efficiency
Fully optimised UX,
withsuperpersonalised
screen design.
2024 has been a landmark year
forAlfa, marked by key milestones
ininnovation, customer success,
andexpansion.
January
March
March September
October
July
May
Pillar 2:
Total
capability
Meeting the complex end-to-end
lifecycle demands of successful
finance providers.
Alfa awarded
MonitorBestCompany
inEquipment Finance
2024for
Innovation
Pillar 4:
Scalability
Truly always-on, financially
coherent operation – without
restriction.
Alfa System 6:
Fully realised
Pillar 6:
Collaborative
ecosystem
Simple integration with market
innovations and through Alfa’s
trusted partner network.
Pillar 5:
Intelligent
automation
Systemised decision-making
through AI and rules-based
workflows.
Pillar 3:
Sustainability
Satisfying emerging business
models, driven by net zero and
ESG regulation.
500
employees worldwide
July
100
th
US employee
December
Fastest
full Alfa Systems
go-live delivered
2
Additional informationCorporate governance
Financial statements
Strategic report
Our year in review
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
36%
50%
14%
Banks
Captives
Independents
59% 41%
Automotive Equipment
v
Alfa Systems is at the heart of some of the world’s largest
andmost innovative asset finance companies. Supporting
alltypes of auto, equipment and wholesale finance business,
our software platform uses leading-edge digital technologies
todeliver proven functionality and performance.
Our identity
We are a software and delivery company.
Our global reach
37 Countries 502 Employees
EMEA revenue
Customer type
End markets
Americas revenue
Asia Pacific
revenue
42%
7%
51%
Revenue by:
Activity
34% 16% 50%
Subscription Software
Engineering
Delivery
Revenue £110m +8%
Operating
profit £34m +14%
Operating
profit margin 31% +1%
Dividends
paid £22m +12%
Employee
engagement 82% +0%
Why invest?
Markets
• Massive market
• Push & pull factors drive growth
• Large barriers to entry
Product
• Exceptional IP
• Market leading software
Returns
• Diversified across geographies and
end markets
• Recurring revenues with growing SaaS
• Strong cash generation delivering
dividends
Find out more overleaf about what
sets Alfaapart
Strategic report Additional informationCorporate governance
Financial statements
3
Investment case
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Point of Sale
Point of Sale
Asset Management
Originations
Contract Servicing
Common Workflow Engine & Business Rules
Common Accounting Engine
Common Business Intelligence
Common Database
Single Platform
Alfa Systems satisfies requirements of all
sizes:asan integrated point solution, a rapid
off-the-shelf implementation or an end-to-end
platform for the complex global enterprise.
What Alfa does... ...differently
Market-
leading
software
Technical
excellence
Flexible
platform
Delivery
People
Functional depth and a bulletproof accounting engine
Proven across customers in 37 countries, large and small
Countries and regions all on one system
Exceptional IP
Cloud-native and secure Software-as-a-Service
Extensible software, embedded in the systems landscape
Your processes as workflows and business rules
Flexible and configurable product structures
Built for finance and accounting professionals
An unrivalled track record in project delivery
Rapid, preconfigured delivery model
Alfa’s people: the best in the business
Alfa’s vibrant culture
Strategic report Additional informationCorporate governance
Financial statements
4
About Alfa
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Delivery
Subscription
Software
Engineering
Types of Revenue
Software Engineering
Subscription
Delivery
Alfa’s proposition Generating revenueDriving activity Resulting in...
1 2 3 4
Delivery
Software
Mission critical software
Unrivalled track record
Flexible platform
Bulletproof delivery model
Deep IP
Industry knowledge
Market-leading product
+
• Subscription revenue grew by 18% in2024
• Both Software Engineering and Delivery
revenue driving Subscription revenue
• Alfa Systems 6 is SaaS only
Business growth and
transition to SaaS
• Overall revenue growth
• Subscription gaining higher
proportion of the business
• Low customer churn
Cash generation
• Strong free cash flow
• Stakeholder return driving
dividends
People
• Growth in headcount
• Improved career
opportunities
• Strong retention and
engagement
Software
• Strengthened IP
• Expanded functionality,
including market expansion
Planet
• UNSDG
• SBTi
Great people + Strong culture + Innovation
Product investment
New implementations
Upgrades
Contract growth
New modules
5
Additional informationCorporate governance
Financial statements
Strategic report
Business model
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Andrew Denton
Chief Executive Officer
2024
Breakthrough
Year
2024 has been a breakthrough
year for Alfa. Another year of strong
revenue growth overall powered
by subscription revenue growth,
with 50% of customers now on
Alfa Cloud. A record number of
customer wins giving a record TCV
level. Ten new modules, delivering
value to our customers and driving
incremental sales. The launch of
Alfa Systems 6 underlining the
importance of product investment
and innovation.
Business review
Breakthrough year
We look back on 2024 as a year of
breakthroughs, whilst maintaining our
excellent delivery record, we:
• Launched Alfa Systems 6
• Moved to SaaS only sales strategy
• Achieved landmark contract wins in
allourmarkets
• Generated record TCV of £221m
• Grew total Alfa headcount to over
500people
• Grew our US operation to over
100colleagues
• Grew our customer base so that our top 5
customers now account for less than a third
of our revenues
We have made significant strategic progress in
2024, increasing our functional lead over our
competition with the release of Alfa Systems 6.
We have continued to grow the business
despite the revenue headwinds from our
transition from a perpetual licence to a SaaS
model. We have an SaaS only sales strategy.
We had a record year for customer wins,
converting eight customers from the late-stage
pipeline, which led us in the second half of the
year to increase our recruitment targets in
both EMEA and the US.
The success we have had in winning US Auto
clients means that we believe we are now the
go-to solution for that market. We have also
Strategic report Additional informationCorporate governance
Financial statements
6
CEO review
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
opened up a new area of this market with the
introduction of our Total Originations capability
as part of the Alfa Systems 6 launch.
We have continued to grow the Company,
ending the year with global headcount in
excess of 500, with over 100 people in the
US,and at the same time we have maintained
the extremely strong Alfa culture.
Our diversification across end markets and
customers means that our top 5 customers
now account for less than a third of our
revenues, five years ago they were nearly
two-thirds of our business.
Our delivery excellence remains a key
differentiator for us, and this has continued
in2024 with twenty-six delivery events in
theyear.
Strong growth driven by fast growing
subscription revenues
Financial performance was strong with
continued growth in revenue and profit.
Revenue was up 8% to £109.9m (2023: £102.0m)
at actual exchange rates or up 9% at constant
currency rates.
Subscription revenues continued to grow
strongly, up 18% year on year largely driven by
growth from existing customers. The impact of
new customer wins on subscription revenues
and margins will be much more pronounced
after go-live, which depending on the project
can take several years as contract volumes
ramp up to full run rate on the system, acting
asa foundation for future growth acceleration.
Delivery revenues were up 1% to £55.0m
(2023: £54.6m). We expect stronger growth in
2025 as the implementation of new projects
won in Q4 2024 start to rampup.
Software Engineering revenue increased
strongly in the second half, up 70% to finish the
year at £17.4m (2023: £15.6m), up 12% on prior
year and with a good pipeline of work for 2025.
We delivered strong growth in operating profit,
increasing 14% to £34.3m (2023: £30.1m) on
the back of the 8% growth in revenues at an
improved gross margin of 64.5% (2023: 62.5%)
which flows through to an improved operating
margin of 31.2% (2023: 29.5%). Cash conversion
in the year was 89% (2023: 115%); as expected
this was lower than 2023 which benefited from
an unusually high level of receipts just before
the December 2023 year end. As the SaaS
model becomes more embedded, cash
conversion will trend over time to between
90%-100%. We finished the period with cash
of£20.5m (31 Dec 2023: £21.8m).
Pipeline conversions driving very
strong TCV growth
We saw very significant growth in our TCV
through the year with the conversion of eight
customers from the late-stage pipeline, with
TCV reaching a record level of £221.3m at the
end of the year. We have continued to see
strong growth in our Subscription TCV but the
most significant increases were in Delivery and
Software Engineering TCV, as these increase
immediately when contracts are signed. At the
point of the contract win the Subscription TCV
is relatively low, but increases over time as we
get closer to go-live and full run-rate revenues.
We had 21 customers each contributing
revenues of more than £2m in the period, up
from 19 last year and up from just seven in
2019. Our top five customer concentration has
significantly reduced to 32% of our revenues in
2024, compared with 61% in 2019. Our largest
customer represented just 7% of our revenues
in 2024.
Delivery and Software
Engineeringagility
In 2023 we saw more go-lives than any other
year in Alfa’s history. Following this in 2024
wehave started work with an unprecedented
number of large customers. We continue to
focus on simplifying and increasing the speed
of our implementations so that we can deliver
more concurrent implementations. Alfa Cloud
has been the most significant contributor
tothis process, allowing us to start
implementations quickly and enabling us to
demonstrate system functionality to clients
much earlier in the project than before. At the
year-end there were six implementations
underway with Alfa Cloud.
The transition to new projects means that
oursoftware engineering teams have been
pivoting in the second half of 2024 and into
thefirst half of 2025 away from Alfa Systems 6
to supporting these new large projects with
customer driven development. Whilst the
focusmay have shifted there continues to
beongoing investment into the product to
maintain and grow our market lead.
We invested into our UK Equipment Start and
US Auto Start products to facilitate further
growth in these markets.
Expanding Alfa Systems 6
functionality
In 2024 we saw the complete launch of Alfa
Systems 6. This has been a hugely important
step in showcasing our ongoing product
investment in both functional and technical
capabilities. Functional investment increases
our product capability for existing markets
butalso expands our addressable market.
Technical investment includes the use of the
latest software tooling, including integration
and AI capabilities.
The ten new modules that have been released
cover additional functionality such as 24/7
andCompose; they also cover new financial
product capabilities such as usage based
charging and revolving credit facilities, opening
up incremental sales opportunities. These new
modules not only open up incremental sales
opportunities to existing customers but also
open up new markets for us in Commercial
Finance and US Originations, which have
thepotential to significantly increase our
addressable markets. We believe it is really
important to continue to invest in both
functional and technical areas and this will
continue in 2025.
Strategic report Additional informationCorporate governance
Financial statements
7
CEO review con tinued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Headcount growth, supported by
strong retention
The successful conversion of the pipeline
during the year resulted in us accelerating
recruitment plans in the second half. Retention
rates have remained very high, being 96% for
the year. This demonstrates the continued
strength of the Alfa culture which is a key
driver of our success.
Headcount at the end of the year was up 6% at
502 (2023: 475) with average headcount in the
period of 485 (2023: 463), up 5% on last year.
Strategic progress
Alfa is a software and delivery company.
Ourstrategy for creating long-term,
sustainable business value is to:
• Strengthen – grow our differentiation
• Scale – increase our capacity
• Sell – further profitable growth
• Simplify – enable more concurrent
implementations, more efficiently
During 2024 we have made good progress
across all of these areas, with key highlights
noted below.
Strengthen:
• Launch of Alfa Systems 6
• Refreshed our software development model
• Invested in our people, increasing internal
learning and development resources
• Refreshed our induction approach for
newjoiners
Scale:
• Increased headcount to over 500 people
• Investigating an increase in our global
footprint through further geographic
smarthubs
• Expanding addressable market into US Auto
Originations and Commercial Finance
• Improved process for partner onboarding
Sell:
• Record eight wins
• Sold first US Auto Originations
implementation
• Continuing sequential growth in
subscriptionrevenues
• Moved to single-tenant SaaS only
salesstrategy
Simplify:
• Completed enabling investment for our
partner-led delivery MVP in UK Equipment
• Completed an accelerated implementation
with Alfa Start for a US Auto customer
• Development of Alfa Start accelerator for
USEquipmentmarket
• Improved migration tooling
• Further automated testing to
simplifyupgrades
All of the above have contributed to making
significant progress on our strategy, with the
strongest evidence being revenue growth of
9% (at constant currency) comfortably
exceeding average headcount growth of 5%
and with Subscription revenues growing at 18%
– the fastest growing revenue stream.
Capital return
We are a highly cash-generative business,
withcash conversion of 89% in 2024, which as
expected was down on 2023 due to some early
receipts at the end of 2023. We expect cash
conversion to trend towards 90-100% over
time. We are committed to investing in our
product and people to ensure that we continue
to offer market-leading solutions andexcellent
delivery and service to our customers.
Our mechanism for returning capital is the
payment of a regular, ordinary final dividend
and we have a policy to grow this progressively.
We will also consider special dividends when
we have excess capital.
Notwithstanding the return of £22.1m excess
cash to shareholders during the year through
ordinary and special dividends, we ended the
period with cash of £20.5m. As such, the Board
has today proposed an ordinary dividend of
1.4pence per share, up 8%, with an ex-dividend
date of 29 May 2025, a record date of 30 May
2025 and a payment date of 27 June 2025. The
ordinary dividend would amount to a total
payment of c.£4.1m. In addition, the Board
hasdecided to declare a special dividend of
2.4pence per share, up 20% on the special
dividend declared this time last year, with an
ex-dividend date of 1 May 2025, a record date
of 2 May 2025 and a payment date of 30 May
2025. The special dividend would amount to
atotal payment of c.£7.1m
Stable market conditions
Whilst over the last few years the macro
environment has been uncertain, the asset
finance market and demand for software
within it has remained robust. The asset
finance market is a more secure form of
lending and it has a history of gaining market
share in uncertain times compared with
non-asset backed lending markets. Alfa
Systems is operational in 37 countries; in
automotive finance, equipment finance,
wholesale finance and loan finance; for OEMs,
banks and independents and across all asset
classes. The breadth and diversity of Alfa’s
business interests has helped insulate us
fromunderlying economic uncertainty in
individual markets as demonstrated by our
ongoing track record of growth, our record
TCVandstrong pipeline.
Strong pipeline
We had a hugely successful year in 2024 in
converting the late-stage pipeline, with
arecord eight customer wins coming out of
thepipeline. We ended the year with eight
customers in the late-stage pipeline, of which
five we are already engaged in paid work under
letters of engagements on implementations
aswe finalise commercial contracts. We are
seeing good activity in the early-stage pipeline,
reinforced by strong positive customer
reaction to Alfa Systems 6 before and during
the recent conference season.
We remain confident in both the demand for
our best-in-class software and our ability to
win work in the market.
Strategic report Additional informationCorporate governance
Financial statements
8
CEO review con tinued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Make it better together starts with
collaboration. By aligning teams, sharing
knowledge, and working together, we drive
meaningful change, improve processes
andenhance the way we support each
otherand our clients.
Challenge without being challenging – it’s
bringing ideas openly and confidently to drive
improvement, always ensuring the approach is
respectful, solution-focused and encourages
collaboration.
I value creativity and enjoy the process
of generating and implementing new ideas.
I’m proud to be part of a team that strives
to create innovative solutions and lets great
ideasgrow, together.
To me, creating a positive impact means
understanding my ‘why’ and using that to
enable me to say ‘yes’ to as many initiatives,
projects, favours and ‘can I borrow you?’
moments as I can. On top of that, positivity
in itself – and bringing happy energy – also
seems to create impact!
Living our values
Michael Dorrani
Senior Consultant
(Sydney, Australia)
Phoebe Lumley
Project Manager
(London, UK)
Charlotte de Grouchy
Senior Project Manager
(London, UK)
Steve O’Hara
Head of Business
Development, Asia Pacific
(Sydney, Australia)
Net-zero commitment and UNGC
The majority of our emissions come from our
supply chain, so engaging with suppliers and
working with them to reduce their emissions
isfundamental to the overall success of us
achieving our SBTi (Science Based Targets
initiative). During 2024, we started an
engagement process with our keysuppliers.
Generally across our key suppliers we can see
that there is a strong desire to reduce emissions.
During the year we joined the UN Global
Compact (UNGC) which will help us drive
forwards our corporate sustainability agenda.
Outlook
The exceptionally strong conversion of wins
inQ4 2024 has led to us entering this year
witharecord level of TCV, setting an excellent
foundation for continued growth and
underpinning our confidence in the year ahead.
Building on the strong subscription growth
in2024 we expect mid-teens growth
inSubscription revenues inFY 2025, alongside
strong momentum in our Delivery and Software
Engineering revenues aswe implement some
key projects for new clients, driving an
expectation of double-digit revenue growth
overall. The market’s strong response to the
launch ofAlfa Systems 6 in 2024 has endorsed
thesuccess of our strategy of continuous
investment in our business and we remain well
positioned for further progress and focused
ondelivering value in 2025 and beyond.
Andrew Denton
Chief Executive Officer
12 March 2025
Strategic report Additional informationCorporate governance
Financial statements
9
CEO review con tinued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Asset Finance Market is a resilient market through different macroeconomic environments.
The asset finance software market is more dependent on industry push-pull factors.
Pull Factors
Software as a business enabler
and driver of innovation
Expedite
digitalisation
Business agility
and flexibility
Increased adoption and
functionalities of AI/ML
Exposure to
green technologies
Addressable software market of
$3.4bn
1
Push Factors
Software not fit for purpose
and high cost of ownership
Regulatory and cyber security
requirements
Poorly integrated
point solutions
Increased
ownership cost
Inefficient workflows and
lowautomation
1. A Deloitte view of the asset finance software industry, 2022
10
Additional informationCorporate governance
Financial statements
Strategic report
Market overview
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Existing Alfa markets Addressable Market Expansion Adjacent Market Expansion
Market
 
United States
 
Europe
 
Australia, NZ & RoW
 
Originations
 
Commercial Finance
Auto Auto
• One of the largest auto
finance markets
• Large Auto finance players
with high volumes and scale
• In addition to asset finance
servicing, originations is a
substantial market
• Larger, international players
dominate themarket and
require multi-country and
multi-jurisdictional features
• Asset lifecycle and support
for new sustainable business
(e.g.fleet) modelsneeded
• The rest of the world,
excluding Asia, makes
up less than 4% of
world asset finance
volumes, with Australia
and New Zealand making
up the majority of this
market
• Finance companies willing to
invest in Originations platforms
to make use of new technology
to increase automation and
speed of response
• Alfa currently supports
end-to-end originations at scale
globally in diverse clients in Auto
and Equipment
• Alfa working alongside key
customers in Auto and
Equipment finance to enhance
offering of key, flexible
functionality in target markets
with biggest opportunities
• Multiple trillion USD market.
• Expanding into adjacent market
with some of the same players
who invest in asset finance who
could be used as a soft route
into themarket
• Modernisation of the
Commercial finance market
is driven by the need for
automation and increased
efficiency of processes as
private credit players increase
competition
• The variability and complexity
associated with commercial
loans and finance make Alfa
Systems the ideal fit
Equipment Equipment
• Private credit entering this
attractive market and
partnering or acquiring
older equipment finance
• Diversification into more
complex financial product
structures related to
commercial finance
• Some larger, cross-border
finance providers but more,
smaller, local players within
single countries
• Ability to quicky adapt new
pricing models is key
• Support for Sustainability
features is important
Alfa
clients
• 6 of the USA’s top 10
autolenders
• 2 of the USA’s top 3
equipmentlessors
• 3 of the UK’s top 5
equipment lessors
• 2 of Australia’s top 5 asset
finance lenders
• In live production in South
Africa with consumer and
commercial finance
portfolios
• Strong interest in originations
from existing clients and
prospects, with some clients
already using the product
• Some of Alfa’s largest equipment
finance clients invest in wider
commercial finance products
allowing us to learn and expand
within this client base
Alfa
position
• Alfa is the de facto go-to company in US Auto and UK
Equipment, withvery strong presences in other markets
• We use one system across all markets and are unique
in having capability across all markets
• We have different competitors in each market
• Alfa provides exceptional high volume asset support
ensuring stability, scalability and robust performance
• Multi-country and multi-jurisdictional
features makes Alfa a great fit to support
large international asset finance players
• Alfa Systems provides unparallelled
support in converting high-level
processes into configured workflows
and business rules, improving efficiency
• Alfa has launched originations
product, which covers direct and
indirect lending, from quoting
to funding
• Alfa has invested in commercial
finance revolving credit facilities
and syndications functionality
Strategic report Additional informationCorporate governance
Financial statements
11
Market overview continued
Pillar 1: Efficiency
Introducing Compose: Fully optimised UX, with
superpersonalised screen design.
When we talk to our customers, they always tell us their
greatest operational challenges are around efficiency and
achieving economies of scale. Alfa Systems already equips
our customers with robust functionality that empowers
them to replicate and automate their processes, and the
efficiency pillar is designed to enhance with tools to:
• Create superpersonalised screens for different users,
processes and products through utilising Alfa Compose.
This is built on the investment in a UI framework and is
astep change in UX for Alfa users, allowing them to
quickly see the information relevant to that task;
• Manage cases at scale through Case Supervision
functionality. New supervisor dashboards and enhanced
SLA and bulk case functionality allows cases and queues
to be managed efficiently.
Pillar 2: Total Capability
Meeting the complex end-to-end lifecycle demands
ofsuccessful finance providers.
Alfa Systems 6 continues to fulfil a key role as the core
platform on which asset finance ecosystems are
orchestrated. The Total Capability pillar gives customers
the ability to:
• Operate a single platform globally for Originations and
Servicing, using the same powerful pricing and workflow
engine for end-to-end processes. Investment has been
focused on building out an efficient, scalable Originations
offering suitable for the US Auto market, where speed
and accuracy is of utmost importance;
• Operate a single platform for the different products and
structures in use at the customer organisation. Alfa’s
investment in revolving credit facilities, direct billing
contracts and usage-based products is a significant step
in this journey;
• Benefit from a preconfigured end-to-end product,
covering Servicing, Collections and Remarketing, and
incorporating regulatory reporting. The investment in
Alfa Start accelerators across Europe, the UK, the USA
andAustralia allows a cost-effective offering for new
prospects, reducing implementation time.
Pillar 3: Sustainability
Satisfying emerging business models, driven by
net-zero and ESG regulation.
The equipment and automotive finance industries
areundertaking a period of exciting change, driven by
environmental concerns and regulations. Alfa has been
investing in this area to enable our customers to support
the required changes to their business models flexibly.
TheSustainability pillar gives them the ability to:
• Track and report on their portfolios’ Scope 3 emissions
tomeet regulatory requirements, at an individual, asset
and portfolio level;
• Manage an enhanced asset lifecycle, incorporating
second and third lives for assets with off-lease
depreciation and views of inventory;
• Utilise flexible, automated usage-based contracts and
pricing, including API updates of actual usage, triggering
necessary billing or contract adjustments;
• Provide both asset and service subscriptions alongside
traditional auto and equipment leases and loans,
effectively enabling Everything-as-a-Service (XaaS)
business models through AlfaSystems.
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
A breakthrough iteration of our SaaS platform
Founded on six pillars, 2024’s iteration of the Alfa Systems software platform delivers important changes in performance and function, helping
financeproviders tackle the significant challenges they face, and seize the lucrative opportunities that lie waiting:
01 02 03
Strategic report Additional informationCorporate governance
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12
Alfa Systems 6
Pillar 4: Scalability
Truly always-on, financially coherent operation –
without restriction.
Scalability in Alfa Systems 6 presents leading-edge
functionality designed for providers looking to scale
theirbusiness with flexibility and speed. Building on
AlfaSystems’ stable, performant platform, long-term
investments by Alfa have delivered the Scalability pillar,
equipping finance providers with everything they need to:
• Optimise resource expenditure: Alfa Cloud’s adaptable
resource model offers automated deployments,
serverless databases and SOC1-certified processes;
• Onboard new portfolios: Powerful new tooling makes
thetransfer of acquired portfolios onto Alfa Systems 6
quick and painless;
• Expand into new markets: Through business rules and
advanced configuration management, Alfa Systems 6
gives customers the power to roll out operations with
flexibility and speed, using the same configuration in
multiple countries, or as a seed for rollouts in new
regions or business lines.
Pillar 5: Intelligent Automation
Systemised decision-making through AI and rules-
based workflows.
Intelligent Automation in Alfa Systems 6 harnesses
cutting-edge cognitive technologies, including predictive
modelling, to empower our customers to create efficiency
gains through a variety of intelligent, automated decision-
making tools. Intelligent Automation is designed to:
• Automate any and all of a customer’s processes: Alfa
customers have the power to automate their processes
to an extent that suits their business. Decision trees
andnested rulesets, triggered by automated workflows,
business rules and APIs, allow a heuristics-driven
intelligent experience at common customer touchpoints;
• Onboard and upskill people: AskThea, the conversational
AI chatbot for Alfa Systems support and guidance, offers
immediate insights for users seeking answers, available
functionality and potential solutions;
• Onboard new products and processes: Using AskThea,
business change professionals can quickly consult Alfa
Systems documentation to understand workflow and
other configuration changes needed to implement new
processes, providing further flexibility and power;
• Understand and reduce portfolio credit risk: Alfa
Decisioning, a brand new credit decision engine,
combines with Alfa iQ’s proven experience in predictive
AI for dynamic optimisation of credit underwriting, with
customer-specific modelling.
Pillar 6: Collaborative Ecosystem
Simple integration with market innovations
andthroughAlfa’s trusted partner network.
Collaborative Ecosystem in Alfa Systems 6 allows
customers to tap into Alfa’s expertise and best practices
tosource and integrate with new technologies, creating
customised, end-to-end solutions – painlessly.
Collaborative Ecosystem is designed to:
• Enable efficient access to new technology: Drawing on
Alfa Systems’ extensive catalogue of REST APIs, efficiently
designed SPIs and leading-edge data transfer technology,
customers can easily integrate new software and
services into the core platform. By working with Alfa’s
architects and accredited partners, customers can
achieve powerful integrations with up-to-date
technology and build their own customised platform –
and help drive innovation within their organisation;
• Take advantage of Alfa’s knowledge and experience:
Alfa’s network of consultants and technical experts
collaborate to build up a rich knowledge base of
integration case studies and solutions, helping customers
to refine their choices and understand best practices;
• Access trained, knowledgeable local resources: Alfa’s
partnership ecosystem goes beyond software
collaborations; our delivery partnerships offer customers
access to local resources fully trained on Alfa Systems
configuration and processes, enhanced by Alfa’s AI
assistant, AskThea.
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
04 05 06
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13
Alfa Systems 6 continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Everything we do supports our
growth and strategy.
Our strategy for creating long-term,
sustainable business value is:
Strengthen
Grow our differentiation ofmarket-
leading People, Product and Delivery by:
• Investing in our smart, diverseteam
• Investing in our product; and
• Investing in our delivery methodology
and tooling.
Read more on page 15
Scale
Increase our capacity for developing
and delivering AlfaSystems, and
extend our reach, by:
• Developing our smart,
diverseteam
• Leveraging global talent sources
to enhance our competitive
position
• Growing our partner ecosystem
• Expanding our addressable
market; and
• Enabling partner led delivery
ofAlfa Start.
Read more on page 17
Sell
Enable profitable growth by focusing on:
• Alfa Systems on Alfa Cloud
• Subscription revenue
• Incremental sales; and
• Commitment to our chosen
targetmarkets.
Read more on page 16
Simplify
Enable more concurrent Alfa Systems
implementations, moreefficiently, by:
• Simplifying our product
• Simplifying our implementations
• Simplifying our processes
acrossour organisation; and
• Expanding our Alfa Start offering.
Read more on page 18
Strategic report Additional informationCorporate governance
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14
Strategy in action
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Number of partner relationships
2022
20
27
30
2023 2024
2024 highlights
Product
Over 2024 we have invested not only in furthering major
initiatives into adjacent markets, but also in delivering on
thepromises made by the Alfa Systems 6 pillars. The advent
of Product Owners has allowed smaller investment items
tobeprioritised and managed, in order to fulfil corporate
objectives. This has enabled valuable, targeted enhancements
across the Alfa Systems product, delighting our customers,
contributing to the new business pipeline, simplifying
configurations and allowing the scaling of customer processes.
People
We continue to invest in our people across Alfa, bolstering our
ever-expanding Learning and Development offering with new
learning content and courses during 2024. We appointed a
new Talent Manager, who will focus on enhancing our talent
growth. Our overall employee engagement, measured in
quarterly Pulse surveys, stood at 82% for 2024. Maintaining
our culture remains a key priority, focusing on providing
support, events and experiences that all foster a great
working environment.
Delivery
2024 has been a pivotal year for Alfa Delivery. In Asia-Pacific,
we began a V4 to V6 upgrade for a longstanding global auto
finance client. In the USA, we started work with severalnew
clients, one going live within nine months of starting, and
progressing into implementation for several others. In EMEA,
we delivered several V4 to V5 upgrades, delivered the first
phase go-live for a global auto manufacturer and appointed
anew EMEA Head of Delivery. Globally, we appointed two
regional Implementation Architecture Heads, to support our
growing operations.
Grow our differentiation of
market-leading People, Product
and Delivery, by:
• Investing in oursmart,
diverseteam;
• Investing in ourproduct;
• Investing in our delivery
methodology and tooling.
£37m
Investment in product
(2023: £35m)*
Plans
Product
Next year we will continue creating value for
our clients and Alfa by harnessing the creativity
of our engineers and aligning their focus to our
strategic objectives.
People
In 2025 we are focused on maintaining and
preserving our precious culture, with the
outputs of research exercises across the
Company being explored and embedded.
Delivery
We intend to focus on further improvements to
reduce the time and effort involved in an Alfa
Systems upgrade to increase upgrade cadence,
as well as simplifying delivery as a whole.
AskThea
Growing out of innovation: AskThea
reflects one of the core principles of our
AI strategy, democratising the use of AI
within Alfa to deliver efficiency gains.
AskThea builds upon AWS tools within
asecure environment, to allow users
fromAlfa and our clients to run
customqueries on the Alfa product
documentation. A first use-case of
generative AI chosen not only for its
value, but also the quality of the
underlying data.
# of live customers, over time
* This investment is calculated based on the total time spent by people in our Product Engineering team working on
Alfa Systems product either for specific customer developments, which are largely chargeable, or internal investment
and enhancement of the product. It does not include time spent on implementing or maintaining and supporting
systems for customers. It includes salary costs and a full overhead allocation, and includes amounts shown as R&D
expense and costs that have been capitalised.
Strategic report Additional informationCorporate governance
Financial statements
15
Strategy: Strengthen
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
2022
29%
31%
34%
2023 2024
2024 highlights
Marketing
Alfa has reinforced our position as industry leader through
the year-long rollout of Alfa Systems 6.
Via a series of six pillars, the campaign emphasised scalability
through SaaS, sustainability, automation and integration, also
launching Total Originations and showcasing innovation with
Compose and AskThea. October’s enhanced ‘full launch’
featured a memorable keepsake in the form ofagraphic
novel, whose comic-style visuals defined an impactful
multi-channel campaign, dominating industry pressand
events, and drawing considerable interest from prospects
and customers.
New modules
A new module structure was launched with Alfa Systems 6,
allowing more modular access to Alfa Systems 6 functionality.
To support new and emerging business models within the
asset finance industry, various new modules and service
packs were launched, including service packs for Subscription
services and XaaS, enabling customers to understand our
functionality in these areas.
Subscription
Since 2017, Alfa has adopted a cloud-first sales strategy,
endeavouring to convince prospective customers of the
numerous benefits of Alfa Cloud.
With scalability being a key component of the fourth pillar
ofAlfa System 6, in 2024 we have made the full transition to
amodel under which Alfa Systems is only available as a single-
tenant SaaS solution. This provides themutual benefit of
continuing the upward trajectory ofSubscription revenue,
while also allowing us to provide exceptional value to
ourcustomers.
Enable profitable growth by
focusing on:
• Alfa Systems on Alfa Cloud;
• Subscription revenue;
• Incremental sales;
• Commitment to our chosen
target markets.
Plans
The continued evolution of the Alfa Systems
product, alongside the release of new modules
planned for 2025, brings further opportunities
for our customers to adopt more of the latest
features through incremental module sales.
Whilst Alfa Systems is market-leading software
in US Auto for Servicing, the significant
investment in Alfa Systems’ Originations
offering provides us with a major opportunity
toexpand our market presence into the
Originations space. This will be a focus for the
coming year. Additionally, we will look to
capitalise on our investment in tangential
markets, such as commercial finance, building
and delivering a strong go-to-market strategy.
Alfa Compose
Building on a hugely successful launch,
we’ve continued to invest in the platform
by greatly expanding both Compose’s
functionality and its available component
library.The number of supported screen
entities has more than tripled as the
library of components continues to be
built out, unlocking the potential of
bespoke screens for a far greater
number of use cases.
In the area of editability, Compose
nowsupports the ability to add wizards
to screens, giving our customers
controlover data users’ visibility and
editability access.
Subscription revenue share
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Financial statements
16
Strategy: Sell
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
2022
441
475
502
2023 2024
2024 highlights
Market expansion
In 2024 Alfa concentrated on expanding its footprint into
adjacent markets.
This involved joining Commercial Finance organisations
globally, building a Minimum Viable Product (MVP) for a
Revolving Credit Facility (RCF) product and partnering with
acustomer to build a Syndications product.
We also commenced analysis and design of a Fleet product,
tobe built out in 2025, to take advantage of the necessary
importance of this market from EV sales quotas.
Recruitment
In 2024 Alfa reached an important milestone, surpassing 500
colleagues globally. Our recruitment practices remain robust
and inclusive, with 2024 joiners being 50% female, 45% male
and 5% non-binary. Overall retention is 96%.
We continue to partner with organisations that support
ourdiversity targets. This year also saw us launch our new
improved Induction programme, piloted successfully
byourgraduate intake in EMEA in September. This new
induction is modular, enabling us to tailor the content
toeachaudience’s needs.
Partnering
We initiated a strategic partnership with [gaidnts] in Germany,
an IT consultancy start-up founded by EGC (EuroGroup
consulting).
We also completed the programme of enabling investment
for the partner-led delivery (PLD) of our Alfa Start product
inourhome market. The partnering team was expanded to
support our global partner programmeoperations and
services. Furthermore, we improved partner onboarding,
including the implementation ofa Learning Management
System for managing training courses, scheduling, reference
materials and completion/certification testing outcomes.
Our partners’ access to systems and supporting information
was also enhanced, opening up more roles for partners.
Increase our capacity for
developing and delivering
AlfaSystems, and extend
ourreach, by:
• Developing our smart,
diverseteam;
• Leveraging global talent
sources to enhance our
competitive position;
• Growing our partner
ecosystem;
• Expanding our
addressablemarket;
• Enabling partner led
deliveryofAlfa Start.
Plans
Market expansion
We will be focusing investment on features that
enable the expansion of addressable share of
target markets and adjacent markets.
Recruitment
Next year we will continue to embed and
improve our induction processes, with focus on
supporting our growth targets. We’ll continue
to attract and retain diverse talent through
employer brand promotion and maintaining
Alfa’s reputation as a great place to work.
Partnering
In 2025 we aim to further expand our partner
certification programme and make further
progress on enabling PLD. We will also evaluate
potential partners to further strengthen our
partner ecosystem and market coverage.
Originations
Working in conjunction with a major
USAuto Captive, we have been
concentrating the work of several of our
engineering teams to build upon Alfa’s
excellent global Originations product to
enable itsuse, at scale, within the highly
competitive US Auto market.
Speed, scale and efficiency are key in
thismarket, so it is essential to take
advantage of new technologies that allow
customisation and facilitate automation
and dynamic pricing.
Global headcount
8
Ongoing partner-assisted
projects
Strategic report Additional informationCorporate governance
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17
Strategy: Scale
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
2022
2
16
21
2023 2024
Enable more concurrent Alfa
Systems implementations, more
efficiently, by:
• Simplifying our product;
• Simplifying our
implementations;
• Simplifying our processes
across our organisation;
• Expanding our Alfa Start
offering.
22
Alfa Start implementations
can reach live production
in as little as 22 weeks
Plans
Alfa Start for US Auto Finance
In 2025 we will continue driving down project
timescales through simplification, focusing on
traditionally longer-running activities such as
data migration and integration development.
The Portfolio Load tool, already used for
ago-live in 2024, will increase speed to market
for smaller portfolios. In terms of integration,
we continue to generate design documents
tosupport and accelerate client build.
Alfa Start for US Equipment Finance
We will embed our simplified migration tool
intoAlfa Start for US Equipment Finance
andimplementation methodology. Additionally,
we will expand the product and process reach
following our commercial loan investment to
cover any use cases, such as syndications.
Advanced Configuration
Management
Advanced Configuration Management
provides additional control over Alfa
Systems configuration, through:
• Fast Configuration Transfer which
extends the existing configuration
export tool, supporting continuous
improvement activities with the ability
to automate the promotion to
production of subsets of Alfa Systems
configuration.
• Contextual Parameter Filtering which
allows customers to control who can
usedifferent parameters, meaning
parameters relating to different
operations can be managed within
asingle Alfa Systems instance.
# of clients on long-term
supportbranches
2024 highlights
Alfa Start for
US Auto Finance
Along with several ongoing projects which are using Alfa Start
as an accelerator, 2024 included a complete implementation
launched in under nine months by rigidly following the Alfa
Start methodology. These projects have allowed us to
continually refine our framework, including the addition
ofpre-written materials for the different stages of a project.
New on-project learnings have also fed back into the
configuration of existing processes, and the creation of new
ones, as we expand our functional coverage to support auto
financiers of all shapes and sizes.
Alfa Start for
US Equipment Finance
The end of 2023 saw the launch of Alfa Start for US Equipment
Finance, with multiple clients using this to accelerate their
implementations. 2024 also saw the development of our
simplified migration tool, introducing a number of features
specific to the market.
Data Migration
Investment in 2024 has further enhanced the Alfa
MigrationSuite, focusing on simplification and continuous
improvement. We’ve streamlined AWS migration processes,
simplified implementation through product and process
enhancements, and refined best-practice documentation to
reduce project duration and cost, delivering greater efficiency
and value for our clients.
Testing
In 2024, we made significant strategic investments in our
quality assurance capabilities by migrating our performance
testing infrastructure to cloud-based platforms, enabling
greater scalability and flexibility. We enhanced our automated
testing framework with advanced regression detection
techniques, allowing earlier identification of potential issues.
These improvements have streamlined our testing processes
and strengthened our ability to deliver high-quality software
more efficiently.
Strategic report Additional informationCorporate governance
Financial statements
18
Strategy: Simplify
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Our strategic priorities
1
Strengthen
2
Sell
3
Scale
4
Simplify
Alfa measures a range of financial
and operational metrics to help
manage business performance.
Definition and KPI calculation method
In considering the financial performance of the
business, the Directors and management use key
performance indicators (KPIs), some of which are
defined by IFRS and some of which are not specifically
defined by IFRS.
We believe that operating free cash flow conversion
isa key measure required to assess our financial
performance. It is used by management to measure
liquidity. This measure is not defined by IFRS.
The most directly comparable IFRS measure for
operating free cash flow conversion is cash flows
from operations. The measure is not necessarily
comparable to similarly referenced measures used
byother companies.
As a result, investors should not consider this
performance measure in isolation from, or as
asubstitute analysis for, our results of operations
asdetermined in accordance with IFRS.
Headcount: Represents the number of Alfa
employees under contracts of employment
asat31 December of each year.
Employee retention rate: Represents the retention
of Alfa employees over the previous 12-month period,
excluding any managed staff attrition.
Employee engagement: The overall employee
engagement score is derived from quarterly
employee Pulse survey ratings based on the
questions “I am happy in my role” and “I would
recommend Alfa to a friend as an employer”. The
figures shown are for the last survey of the year.
Operating free cash flow conversion: Calculated
ascash generated from operations, less capital
expenditures, less the principal element of lease
payments in respect of IFRS16. Operating free cash
flow conversion represents operating free cash
flowgenerated as a proportion of operating profit.
Total contract value (“TCV”): TCV is calculated
byanalysing future contract revenue based on the
following components:
(i) an assumption of three years of Subscription
payments assuming these services continued as
planned (actual contract length varies by
customer);
(ii) the estimated remaining time to complete Delivery
and Software Engineering deliverables within
contracted software implementations, and
recognise deferred licence amounts (which may
not all beunder a signed statement of work); and
(iii) Pre-implementation and ongoing Delivery
andSoftware Engineering work which is
contracted under astatement of work.
As TCV is a reflection of future revenues, forward
looking exchange rates are used for the conversion
into GBP.
Constant currency: When the Company believes
itwould be helpful for understanding trends in
itsbusiness, the Company provides percentage
increases or decreases in its revenues or operating
profit to eliminate the effect of changes in currency
values. When trend information is expressed herein
“in constant currencies”, the comparative results
arederived by re-calculating comparative non-GBP
denominated revenues using the average exchange
rates of the comparable months in the current
reporting period.
Headcount
502
2022
441
475
502
2023 2024
2024 performance
2024 saw us achieve a
significant milestone with
ourheadcount tipping over
500. Our continued strong
retention and recruitment
tosupport growth directly
enable us to achieve our
revenue growth and make
usfuture ready.
Why do we measure this?
Our revenue growth and
ability to win new business
isheavily dependent on the
number and deep expertise
ofour people and therefore
growing our team for the
future is key to this goal.
Employee retention rate
96%
2022
90%
97%
96%
2023 2024
2024 performance
Our continued focus on
nurturing our culture,
investing in our people
andtheir career growth
contributes to our high
retention. Identifying
interesting and challenging
opportunities for growth
provides variety and challenge
that is a key contributor to
retaining ourpeople.
Why do we measure this?
Our deep expertise in the
industry and our ability
toservice our customer
relationships is driven by the
quality of our people. A higher
retention rate demonstrates
sustained engagement and
maintenance of key skills
andknowledge.
Employee engagement
82%
2022
84%
82% 82%
2023 2024
2024 performance
Employee engagement has
remained strong through the
year, with a continued focus
on fostering a culture of open
and two-way communication.
Our people feel listened to,
informed, and alongside the
work that our communities
champion, invested in making
Alfa a great place to work.
Why do we measure this?
Measures levels of employee
satisfaction and connection
tothe business. There is a
positive correlation between
employee engagement and
business performance and
the metric should be a lead
indicator for retention rate
performance.
Linked to
remuneration: No
Links to strategic
priorities:
1
3
Linked to
remuneration: Yes
Links to strategic
priorities:
1
3
Linked to
remuneration: Yes
Links to strategic
priorities:
1
3
Operational
Strategic report Additional informationCorporate governance
Financial statements
19
Key performance indicators
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Financial
Group revenue
£109.9m
2022
93.3m
102.0m
109.9m
2023 2024
2024 performance
Group revenue grew by 8%
(9% on constant currency
basis), with particularly strong
growth in our Subscription
stream, up 18%, driven by
ramp up of new customers
and ongoing projects as
theyprogress through
implementation stages and
reach go-live, as well as
growth within the existing
customer base. Delivery
revenue is slightly ahead of
2023 following the particularly
strong period in the first half
of 2023, while Software
Engineering is up 12% as
aresult of an increased focus
on client-led development in
the second half of 2024.
Why do we measure this?
Growing revenue is a measure
of customer and business
success. It is central to our
objective of growing by
maintaining our leading
competitive position through
differentiation of People,
Product and Delivery.
Operating profit
£34.3m
2022
29.6m
30.1m
34.3m
2023 2024
2024 performance
Operating profit grew 14%
from last year as a result of
8% growth in revenues with
net operating expenses
growth of 5%, primarily
drivenby a 5% increase in
average headcount.
Why do we measure this?
Operating profit is an
indicator of the Group’s
profitability. It can be used
toanalyse the Group’s core
operational performance
without the costs of capital
structure and tax expenses
impacting profit.
Operating profit margin
31.2%
2022
31.8%
29.6%
31.2%
2023 2024
2024 performance
Operating profit margin
increased to 31% for the year
as a result of gross profit
margin improvement,
partially offset by growth
inSG&A costs including
investment in our legal and
commercial functions to
support pipeline conversion,
marketing spend associated
with Alfa Systems 6 launch,
increased IT and cyber
security costs, and increased
amortisation of intangible
assets now in use.
Why do we measure this?
Operating profit margin is
ameasure of how effectively
we sell Alfa Systems and
manage our cost base. It also
allows comparison across
different companies
andsectors.
Cash
£20.5m
2022
18.7m
21.8m
20.5m
2023 2024
2024 performance
Cash generated from
operations was sufficient
toallow for the payment of
further special dividends
totalling £18.3m which
reduced the Group’s
cashbalance.
Why do we measure this?
Cash is critical to allow the
Group to cover its expenses,
provide funds for investment,
growth and to meet its
long-term needs. Cash
generation is a good indicator
of the underlying health of
thebusiness.
Operating free cash
flowconversion
89%
2022
102%
115%
89%
2023 2024
2024 performance
Operating free cash flow
conversion for 2024 was
below 100% partially due to
the unwinding of early cash
collections at the end of
2023,increased spend on
investment in product, and
our continued transition to a
subscription model as a result
of which our cash conversion
will trend toward 90-100% in
the long run.
Why do we measure this?
A strong unencumbered
balance sheet position is key
to growing the business in
thefuture. Our business has
always been cash generative
and this KPI allows us to
monitor cash flows before
investment in capital projects.
Total contract value
£221.3m
2022
142.9m
165.3m
221.3m
2023 2024
2024 performance
Total TCV has seen
exceptionally strong growth
since 31 December 2023
driven by strong pipeline
conversion with eight
customer wins during the
year. Subscription TCV grew at
14%, in line with Subscription
revenue for the year, with
Delivery TCV more than
doubling as a result of
thesignificant new
implementation projects
contracted as well as growth
in Software Engineering TCV
of 38% driven by development
requirements for new
customer implementations.
See p23 for further detail.
Why do we measure this?
Helps to predict revenue and
the value of a contract over its
lifetime, which will generally
extend beyond the current
financial year. See p19 for
adetailed explanation of
thecalculation.
Linked to
remuneration: Yes
Links to strategic
priorities:
1
2
3
4
Linked to
remuneration: Yes
Links to strategic
priorities:
1
2
3
4
Linked to
remuneration: Yes
Links to strategic
priorities:
1
2
3
4
Linked to
remuneration: Yes
Links to strategic
priorities:
1
2
3
4
Linked to
remuneration: Yes
Links to strategic
priorities:
1
2
3
4
Linked to
remuneration: No
Links to strategic
priorities:
1
2
3
4
Strategic report Additional informationCorporate governance
Financial statements
20
Key performance indicators continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Duncan Magrath
Chief Financial Officer
Strong
figures with
PBT up 15%,
TCV up 34%
The business continues to grow
revenues and profits and generate
excess cash. The growth in
subscription revenues and the very
strong TCV gives us confidence for
the future growth of the company
and has allowed us to declare
a special dividend of 2.4p and
propose an ordinary dividend of
1.4p, with the combined total up
15% on this time last year.
Financial results
£m 2024 2023
Movement
%
Revenue 109.9 102.0 8%
Gross profit 70.9 63.7 11%
Operating
profit 34.3 30.1 14%
Profit
before tax 34.1 29.6 15%
Taxation (8.5) (6.1) 39%
Profit for
the period 25.6 23.5 9%
Basic EPS 8.68p 7.99p 9%
Diluted EPS 8.56p 7.90p 8%
Revenues increased by 8% or £7.9m to £109.9m
in the 12 months ended 31 December 2024
(2023: £102.0m), with growth at constant
currency stronger at 9%. Revenues grew very
strongly in North America, up 37% on the back
of some large customer wins over the last
18 months, and now account for 42%
(2023: 33%) of revenues.
Strategic report Additional informationCorporate governance
Financial statements
21
Financial review
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Gross profit increased to £70.9m
(2023: £63.7m) up £7.2m, with gross margin at
64.5% (2023: 62.5%) with the increase in gross
margin as a result of increased capitalisation
ofcosts from more investment focused on new
modules. Sales, General & Admin expenses
increased to £36.6m (2023: £34.3m) with the
largest increase due to increased headcount
inSales, Legal & Commercial and Information
Security. There were also increased computer
costs as we closed two data centres moving to
a Cloud-based solution, reducing the need for
future capex. Other cost increases included
health costs and profit share. Other income
was £0.0m (2023: £0.7m). Overall operating
profit increased by 14% to £34.3m
(2023: £30.1m) with profit before tax
of£34.1m(2023: £29.6m).
The Effective Tax Rate (ETR) for 2024 was 24.9%
(2023: 20.6%), the increase being principally
due to the impact of the increase inthe UK
corporation tax rate from 23.5% to 25.0% for
2024 and the change in R&D relief. Profit for
the period was £25.6m (2023: £23.5m).
Revenue
Revenue – bytype
£m 2024 2023
Movement
%
Subscription 37.5 31.8 18%
Software
Engineering 17.4 15.6 12%
Delivery 55.0 54.6 1%
Total revenue 109.9 102.0 8%
Subscription – Strong growth in
subscription revenues
Subscription revenues arise from revenues
from SaaS and other recurring services.
Overall subscription revenues increased
strongly by 18% to £37.5m (2023: £31.8m) with
growth driven from both new and existing
customers. Subscription customers now total
39 (2023: 35) and 60% of subscription revenues
come from customers using Alfa Cloud.
Subscription revenues now account for 34%
ofoverall revenues (2023: 31%).
We have a single-tenant SaaS solution. We and
our customers benefit from a single standard
code-set and database, but with multi-layer
data segregation as opposed to code-based
segregation used in multi-tenant SaaS models.
One of the big benefits of this approach is that
customers can control their release cycles
rather than having an upgrade timetable
dictated to them.
Our SaaS services are ISO 27001 and ISO 27018
certified and SOC1 and SOC2 audited to
confirm compliance with controls around data
security and availability. Given the mission-
critical nature of our systems for our
customers, having such third party verification
of our compliance with these standards is a key
selling point.
Software Engineering – Strong H2
forchargeable work
Software Engineering revenues largely arise
from chargeable development work for new
and existing customers, along with some
perpetual licence recognition.
Software Engineering revenues for the year
increased by 12% on the back of new customer
start-ups. We also saw a reduction in the
customised perpetual licence recognition
downto £3.3m in the year (2023: £4.4m) as
aconsequence of the successful transition to
asubscription SaaS model. There were one-off
licence revenues of £0.8m (2023: £0.7m).
Our strategy is to continue to develop our
software, to ensure that we meet and exceed
customer and market needs as they evolve and
as the regulatory and commercial environment
continues to change. We have the industry
leading software and we continue to invest
toincrease that lead, through a balance of
customer funded development and self-funded
development.
Delivery – High-quality delivery
Delivery revenues arise from work for
existing customers delivering new modules,
upgrades, migrations and other services,
aswell as work with new customers on
project definition and implementation of
AlfaSystems.
Following a record year of deliveries in 2023,
in2024 we saw six new large projects start-up.
These projects are multi-year projects with
go-lives in subsequent years. Overall Delivery
revenues increased by 1% to £55.0m
(2023: £54.6m) at actual exchange rates.
Total revenues from existing customers,
including V4 to V5 upgrades was £38.7m
(2023: £36.1m). Within this, as expected, V4 to
V5 upgrades are slowing down as we come to
the end of that programme and they accounted
for 12% (2023: 17%) of total Delivery revenue.
As V4 to V5 projects are replaced by new
projects this will further boost Subscription
revenues due to the higher incremental
Subscription revenues they will generate in
thefuture.
We had 26 delivery events in the year which as
expected was down on the record 35 last year.
As noted 2024 was more about starting up new
projects, however there were three go-lives
during the year, one V4 to V5 upgrade in the
UK,and then two smaller initial go-lives for
automotive customers, one in the UK and one
in the US, as part of multi-year projects with
multiple go-lives.
Strategic report Additional informationCorporate governance
Financial statements
22
Financial review continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Total Contract Value (TCV)
TVC – by stream
£m 2024 2023
Movement
%
Subscription 136.7 119.5 14%
Software
Engineering 24.6 17.8 38%
Delivery 60.0 28.0 114%
Total TCV 221.3 165.3 34%
Total contract value (TCV) at 31 December 2024
was £221.3m (31 December 2023: £165.3m).
TCV grew strongly on the back of the record
eight wins during the year and also due to the
continuing growth in subscription TCV.
TCV – by stream
for next
12months
£m 2024 2023
Movement
%
Subscription 41.9 37.1 13%
Software
Engineering 13.5 8.7 55%
Delivery 40.3 21.2 90%
Total TCV 95.7 67.0 43%
Of the TCV at 31 December 2024, £95.7m
(2023: £67.0m) is currently anticipated to
convert into revenue within the next
12 months. The subscription portion increased
13% to £41.9m (2023: £37.1m). The strongest
growth came from Software Engineering TCV,
up 55% to £13.5m (2023: £8.7m) and Delivery
TCV up 90% to £40.3m (2023: £21.2m) due to
the strong conversion of the late-stage
pipeline. At 2023 year end we were working
with a number of companies in the late-stage
pipeline and whilst we expected the projects to
continue as they were not fully contracted, they
were not fully included in TCV, hence the very
strong growth in the TCV figure.
Total TCV
Dec-22
Subscription
240
220
200
180
160
140
120
100
80
60
40
20
0
£m
Dec-23
+34%
Dec-24
93
20
30
£143m
£165m
£221m
119
18
28
137
24
60
Software
Engineering
Delivery
Operating profit
The Group’s operating profit increased by
£4.2m to £34.3m in 2024 (2023: £30.1m)
primarily reflecting the £7.9m increase in
revenue offset by cost increases of £3.7m.
Headcount numbers were up 6% at
31 December 2024 at 502 (2023: 475), with
average headcount of 485 up 5% on last year
(2023: 463). Staff retention remained very
highat 96%.
Expenses – net
£m 2024 2023
Movement
%
Cost of sales 39.0 38.3 2%
Sales, general and
administrative
expenses 36.6 34.3 7%
Other income 0.0 (0.7) –
Total expenses
– net 75.6 71.9 5%
Cost of sales increased by £0.7m to £39.0m
(2023: £38.3m) to support the growth in the
business. This was due to higher headcount
and salary costs along with increased hosting
costs from the increasing scale of that
business, offset by increased capitalised
investment into the product as our engineering
resources focused on Alfa Systems 6 as
opposed to chargeable client work.
Sales, general and administrative (SG&A)
increased to £36.6m in the year (2023: £34.3m).
Salary costs were up 9% in the period to £14.1m
(2023: £12.9m). Profit Share Pay, including
employer’s costs, in the period was £4.2m
(2023: £3.8m). Share-based payment charges
have decreased slightly from last year to £1.4m
(2023: £1.6m). Foreign currency gains/losses
were a gain of £0.5m, up from the gain of
£0.3m last year. Other costs totalling £17.4m
increased £1.1m on last year (2023: £16.3m)
with, as expected, increased computer costs. In
2023 there were £0.6m of costs related to
possible offers forAlfa.
Other income reduced from £0.7m last year to
£0.0m this year largely due to the reduction in
UK R&D Expenditure Credit (RDEC).
Profit before tax
Overall profit before tax of £34.1m was up 15%
on last year (2023: £29.6m). Net finance costs
were unchanged at £0.2m (2023: £0.2m).
Profit for the period
Profit after taxation increased by £2.1m, or 9%,
to £25.6m (2023: £23.5m). The Effective Tax
Rate for 2024 was 24.9% (2023: 20.6%). The
increase was due to 2024 being the first full
year of the increased UK corporation tax rate
of25% along with the 2023 rate benefiting
from a prior year R&D claim. There is no longer
any benefit from R&D on the tax line, with the
reduced benefit from the RDEC scheme being
shown in other income.
Earnings per share
Basic earnings per share increased by 9% to
8.68 pence (2023: 7.99 pence). Diluted earnings
per share also increased by 8% to 8.56 pence
(2023: 7.90 pence).
Cash flow
As expected, cash generated from operations
was down year on year at £37.3m
(2023: £39.2m) due to the impact of some
receipts received in December 2023 which
wewould have expected to receive in January
2024. Net cash generated from operating
activities was £28.4m (2023: £32.2m) with tax
payments of £8.2m up on the £6.5m for 2023
largely due to the increase in corporation
taxexpense.
Strategic report Additional informationCorporate governance
Financial statements
23
Financial review continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Cash (including the effect of exchange
ratechanges) decreased by £1.3m to £20.5m
at31 December 2024, from £21.8m at
31 December 2023. There was £28.4m of net
cash generated from operating activities
(2023: £32.2m). Total dividends paid in the year,
being the ordinary and two special dividends,
increased by 12% to £22.1m (2023: £19.7m).
Purchases of own shares in the period were
£0.7m (2023: £4.8m) down on last year as they
were purely for shares into the Employee
Benefit Trust, whereas last year there were also
treasury shares purchased in the period. Net
capital expenditure of £5.6m was up on last
year (2023: £3.4m) due to as expected
increased investment into the product, up to
£5.3m (2023: £2.8m) and with other capex of
£0.3m (2023: £0.6m).
Operating free cash flow
conversion
£m 2024 2023
Cash generated from
operations 37.3 39.2
Adjusted for:
Capital expenditure (5.6) (3.4)
Principal element of the
leasepayments in respect of
IFRS 16 (1.3) (1.3)
Operating free cash flow 30.4 34.5
Operating profit 34.3 30.1
Operating free cash flow
conversion 89% 115%
The Group’s Operating Free Cash Flow
Conversion (FCF) of 89% (2023: 115%) was
down on last year. Cash conversion was
impacted by receipts in December 2023 that
we would normally have expected tobe
received in January 2024. As previously noted,
the move away from perpetual licences to a
SaaS model will result in cash conversion going
forwards averaging between 90% to100%.
Balance sheet
The significant movements in the Group’s
balance sheet, aside from the cash balance
which is described above, from 31 December
2023 to 31 December 2024 are detailed below.
As expected, trade receivables increased from
the very low level at 31 December 2023 of
£5.6m, which had benefited from some early
payments from customers, to £8.6m at
31 December 2024. They remain extremely
tightly controlled with overdue debtors only
£0.5m (2023: £0.6m) and these are all within
30days overdue. All of the year-end receivables
have now been collected.
Accrued income was substantially in line with
last year end at £4.7m (31 December
2023: £4.6m). Corporation tax recoverable of
£2.8m (31 December 2023: £1.9m) is principally
due toamounts expected to be received
related toR&D claims.
Trade and other payables balance increased by
£1.7m to £11.7m (31 December 2023: £10.0m)
which was driven primarily by an increase in
amounts due relating to tax and social security.
Contract liabilities relating to software licences
was largely unchanged at £8.1m (31 December
2023: £8.0m). Contract liabilities from deferred
maintenance increased to £7.6m (31 December
2023: £6.2m) with the largest factor due to
thetiming of invoicing and receipts on one
customer. We expect a £1.8m reversal of this
in2025.
Going concern
The financial statements are prepared on the
going concern basis. This is considered
appropriate due to the reasons stated in note
1.1 to the consolidated financial statements.
Subsequent events and related parties
There have been no subsequent events that
require disclosure. Details about related party
transactions are disclosed in note 32 to the
consolidated financial statements.
Duncan Magrath
Chief Financial Officer
12 March 2025
Renaming revenue streams
Over the last few years, the company has
transitioned away from selling perpetual
licences to a SaaS licence model, in line
with wider market trends and shifting
customer demand. We have therefore
decided to align the terminology of our
revenue streams more accurately with
theunderlying revenues.
Licence income is now largely recognised
within the Subscription revenue stream
and the Software Engineering revenue
stream mainly represents revenue
generated from our Software Engineering
team. Delivery revenue arises from work
delivered by ourdelivery teams in the
form of new implementations, upgrades
or delivery ofother projects.
The methodology for which revenues
arerecognised and disclosed within each
revenue stream remains unchanged, this
is simply a change of name.
• Software revenue stream is now named
Software Engineering;
• Services revenue stream is now named
Delivery; and
• No change of name for the Subscription
revenue stream.
Strategic report Additional informationCorporate governance
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24
Financial review continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Introduction to our ESG highlights
Doing good isn’t just a commitment
at Alfa – it’s embedded in every facet
of how we operate, innovate and
grow. Across our global organisation,
we’re integrating Environmental,
Social and Governance (ESG)
principles into our strategic
objectives, daily operations and
processes. Our journey is about
morethan meeting targets; it’s
aboutcreating lasting value for
allourstakeholders – our people,
thecommunities we touch, and
theplanet.
This year, we’re taking a bold step forward in
how we share our progress. While the next few
pages of this Annual Report provide a snapshot
of our achievements, we’re thrilled to expand
on our reporting with the launch of our second
Sustainability Progress Report. Introduced
in2023, this dedicated report highlights the
comprehensive initiatives driving impact across
People, Planet and Product at Alfa. From
fostering an equitable workplace to reducing
carbon emissions and delivering sustainable
innovation, it captures the depth and breadth
of our global efforts.
Here in our Annual Report highlights,
you’llfind:
• Alignment with the UN Sustainable
Development Goals (SDGs) and our
continued commitment as a signatory ofthe
United Nations Global Compact (UNGC),
reaffirming our role as responsible
corporatecitizens;
• Gender Pay Gap reporting, reflecting our
ongoing pursuit of equity and inclusion;
• Progress on carbon emissions reduction
andenergy efficiency, showcasing our
determination to combat climate change;
and
• Disclosures in accordance with TCFD
(TaskForce on Climate-related Financial
Disclosures) and SECR (Streamlined Energy
and Carbon Reporting) requirements.
Our Sustainability Progress Report will take
you even deeper, illustrating how these
initiatives come to life across Alfa. By sharing
adedicated and expanded report for
sustainability, we aim to inspire greater impact
and innovation in our shared mission to
protect and enhance the world around us.
Together, we are redefining what’s possible –
because sustainability isn’t just what we do;
it’swho we are.
To view the full Sustainability Progress
Report for 2024 please visit:
alfasystems.com/sustainability-progress-
report-2024
All our ESG initiatives align with our five chosen
United Nations SDGs. Alfa’s ESG Steering
Committee, comprising colleagues from across
the business globally and including our Chief
Financial Officer and Chief People Officer,
meets each month to focus on our progress
and to support the overall direction of ESG
atAlfa.
Materiality
In addition to our chosen UN SDGs, our ESG
Steering Group also continues to focus on the
key areas identified by SASB as materially
impacting the software industry: Energy
Management, Customer Privacy, Data Security,
Employee Engagement, Diversity and Inclusion,
Competitive Behaviour and Systemic
RiskManagement.
United Nations’ Sustainable
Development Goals and United
Nations Global Compact
At Alfa, our five chosen UN SDGs, guiding
us in our ESGefforts, are:
Achieve gender equality and
empower all women and girls.
Promote sustained, inclusive
and sustainable economic
growth, full and productive
employment and decent work
for all.
Reduce inequality within
andamong countries.
Ensure sustainable
consumption and
productionpatterns.
Take urgent action to combat
climate change and its impacts.
Many of our suppliers, customers and
charity partners align with the SDGs,
alsoproviding a way for us to identify
common ground when engaging on
ESG-related matters.
Strategic report Additional informationCorporate governance
Financial statements
25
Environmental, Social and Governance
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
2024 was the year we went further than
aligning with five goals, finding a framework
which will support all our ESGinitiatives and
give us a formal stamp ofapproval for all the
good things we do as standard at Alfa. We were
delighted to join theUNGC.
On signing up, Alfa joined more than 20,000
companies and 3,800 non-business signatories
based in over 160 countries. It is the world’s
largest corporate sustainability initiative,
andbeing part of this collective force will help
us to maximise ourimpact.
The UN Global Compact’s 10 principles
promote responsible business by upholding
human rights, fair labour, environmental
sustainability and anti-corruption in all
corporate practices. We feel comfortable that
we operate well within the UNGC principles
atAlfa.
Access to resources and support will help us
improve our sustainability performance and
identify opportunities for innovation and
growth. Risk management expertise will
support us in identifying and mitigating various
risks associated with ESG. The UNGC aligns
with emerging regulatory requirements
relatedto sustainability and responsible
business conduct. By adhering to these
principles, we can stay ahead of regulatory
changes and ensure compliance with evolving
legal standards.
People
At Alfa, investing in our people is at the heart
ofeverything we do. In 2024, we expanded our
Learning and Development programmes with
fresh, dynamic content and new courses,
empowering our team with opportunities
togrow and thrive. Employee engagement,
measured quarterly through our Pulse surveys,
stood strong averaging 82% for the year,
reflecting our dedication to fostering
asupportive and inspiring workplace.
Preserving and enriching our culture remains a
top priority for 2025. This focus is underpinned
by insights gathered from company-wide
research exercises, which we are embedding
into our practices to ensure our culture
continues to flourish.
We were very proud to be winners of the
Equity, Diversity and Inclusion (EDI) Trailblazer
Award at the 2024 LeasingWorld Gold Awards.
2024 marked a significant milestone for Alfa
aswe surpassed 500 colleagues globally.
Ourinclusive and rigorous recruitment
processes supported this growth, with new
hires comprising 50% female, 45% male and 5%
non-binary colleagues. Retention remained
strong at 96%, and we continued to partner
with organisations aligned with our
diversitygoals.
This year also saw the successful launch of
ourenhanced modular Induction programme,
piloted by our graduate intake in EMEA in
September. New flexibility allows content to
betailored to the needs of specific audiences,
ensuring new team members feel informed,
engaged and ready to contribute.
Looking ahead, we’ll build on these foundations
by expanding our induction processes. We’ll
also amplify our efforts to attract diverse
talent through strategic employer brand
initiatives, ensuring Alfa remains a workplace
where everyone can thrive.
Planet
Our commitment to achieving net-zero
emissions remains steadfast, guided by
SBTi-validated reduction targets. This year,
wecontinued our journey by refining our
approach to emissions data collection,
including the ongoing analysis of our colleague
commuting survey to ensure accurate
reporting and transparency.
As part of our dedication to impactful climate
action, we transitioned to working with EcoAct
for our carbon-offsetting initiatives, selecting
abalanced portfolio of reduction and removal
options that align with our sustainability goals.
Everyday planet-friendly practices are also
central to our operations, with initiatives
suchas refill stations, laptop recycling and
other green programmes remaining part of
lifeat Alfa.
In 2025, we’re excited to further our
commitment to net-zero by leveraging the
UNGC Accelerator programmes, continuing to
innovate anddrivemeaningful progress in our
sustainabilityjourney.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Product
In 2023, we proudly introduced new
functionality within Alfa Systems that enables
customers to track and report on the Scope 3
greenhouse gas (GHG) emissions associated
with their portfolios. This feature originated as
an innovative idea during one of our regular
Hackathon events, was prioritised for
investment and came to life through a close
collaboration between our Markets and
Products and Product Engineering teams. With
input from over 20 clients across all markets
and regions, this powerful tool is a testament
tothecollective drive for innovation
andsustainability.
As part of 2024’s launch of Alfa Systems 6, we
emphasised sustainability in our product
marketing releases, introducing Sustainability
as one of six key ‘pillars’. This highlighted how
Alfa Systems empowers providers to meet
evolving demands for sustainability-focused
products and transformative business models.
Sustainability in Alfa Systems 6 offers
robust capabilities to support key goals,
including:
• Comprehensive asset lifecycle management,
from origination to end-of-life;
• Seamless support for subscription-based
business models; and
• Full readiness to facilitate XaaS (Everything-
as-a-Service) offerings.
With Alfa Systems 6, we’re driving meaningful
progress towards sustainability while
equipping our clients with the tools they
needto succeed in a changing world.
Aligned with our commitment to a ‘cloud first’
approach, Alfa Systems implementations
leverage AWS Cloud Computing for hosted
services. This partnership not only ensures
operational excellence but also delivers
environmental benefits, as AWS remains on
track to power its operations with 100%
renewable energy by 2025.
Gender equality
The analysis provided is based on global data
as at 5 April of each year.
Gender pay gap %
Median Pay Gap Mean Pay Gap
Pay Gap 2023 2024 2023 2024
Alfa 17.4% 16.4% 14.9% 13.1%
Gender pay gap % in pay quartiles. This
displays the % proportion of men and women
in each pay quartile.
2023 2024
Female Male Female Male
1st Quartile
(Low) 46% 54% 47% 53%
2nd Quartile 27% 73% 29% 71%
3rd Quartile 26% 74% 27% 73%
4th Quartile
(High) 24% 76% 25% 75%
Total 31% 69% 32% 68%
Our global mean gender pay gap has
decreased from 14.9% in 2023 to 13.1% in 2024.
The global median gap has also decreased
from 17.4% to 16.4%.
In 2024, the bonus gap mean was 37.9% and
median was 34.5%. 89% of women at Alfa
received a bonus, compared with 95% of men.
Global mean
14.9%
2023
13.1%
2024
Global median
17.4%
2023
16.4%
2024
Understanding the report – reasons for the
pay gap
The gender pay gap shows differences in the
average (median and mean) earnings between
different groups of people by gender. We know
that a pay gap is likely to persist until there is
equal or proportionate gender representation
at every level and job role in an organisation.
Our gender pay and bonus gap data is
influenced by the composition of our
workforce, as a result of being a technology
organisation, as well as changes to our
employee population which is impacted by
newjoiners, leavers and organisational
changes. As a result, we have seen year-on-
year fluctuations in our pay gap figures.
Our analysis shows that we have more men
than women at all levels of the Company, which
is reflective of the overall challenge faced by
the wider UK industry (where, typically, fewer
women are drawn to technology and STEM
related disciplines). In particular, the Company
continues to recognise that there is a higher
proportion of women in business and support
function roles in comparison to technology
roles, a reflection of the ongoing challenge
faced by the technology and STEM industry
ingeneral.
As has been observed and reported in previous
years, the main factor influencing Alfa’s gender
pay gap is the ratio of females versus males
across all levels of the organisation, in
particular at our more senior grades where
theratio is wider.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
There are fewer women in senior leadership
roles with associated higher levels of pay
compared to men. Globally, as of 1 November
2024, 26% of our most senior leadership
positions (grades F,G,H,I) are held by women.
This is a slight improvement from the previous
year, when 24% of these positions were held
bywomen.
We are actively hiring more women into the
business year on year, and our female talent
pipeline continues to improve. In 2024 so far
(until 1 November), 51% of our new joiners
globally are women and in the UK, 59% are
women. This is a positive improvement from
2023, when 43% of new joiners globally and
32% of new joiners in the UK were women.
It is important to note, however, that these new
joiners are often hired into positions at lower
grades (e.g. graduates), which therefore makes
the gender pay gap more difficult to influence
in the shorter term. However, these statistics
do demonstrate a positive year-on-year trend.
Understanding the report – reasons for the
bonus gap
The proportion of both women and men who
received a bonus in 2024 has increased from
2023 (largely as a result of employees
becoming eligible for profit share pay-out).
The median and mean bonus gap that still
exists can largely be attributed to the weighting
of women in senior roles compared to men.
This is because there are more males in
higher-paying positions than females, which
therefore results in a higher overall bonus
pay-out for males, because the bonus
calculation is a percentage of salary. In addition
to this, bonus gap data includes Sales Incentive
Plan (SIP) and LTIP share data. There is a much
greater proportion of men versus women who
are eligible for these plans which can also
explain the bonus gap. Until there is a greater
balance of males and females in senior
positions, the bonus gap will continue to exist.
Giving back
We have partner charities in each of our
regions, voted for by colleagues.
In EMEA, The Food Foundation was our partner
charity for the first half of 2024. We then voted
in our new charity partner for the next couple
of years: Depaul UK, a charity that tackles
youth homelessness.
In the USA, we continued our partnership with
amental health charity.
In Australia, we agreed to support a new
partner Man Cave, a leading preventative
mental health charity for teenage boys and
their communities. In New Zealand, we chose
Gumboot Friday, an organisation that gives
young people free and fast access to qualified
counselling.
Through a host of activities and events, we
raised a combined total of over £20,000 for
our partner charities in 2024. Charity
donations for all other causes across the
year totalled over £50,000.
Alfa has been rated by ESG rating agencies
including ISS and CDP (formerly the Carbon
Disclosure Project).
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Environmental, Social and Governance continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Alfa has complied with the requirements of UKLR 6.6.6(8)R by including climate-related financial disclosures consistent with the TCFD recommendations and recommended disclosures. Where we
have not adopted TCFD recommendations in full, such as in Strategy (c), we have explained the reasons below. We have based our disclosures on the TCFD ‘Guidance for All Sectors’ and note that we
do not operate in an industry for which the additional supplemental guidance applies. For our TCFD disclosures, ’materiality’ is considered to be the threshold at which ESG issues become sufficiently
important to our investors and other stakeholders that they should be disclosed. We believe that the audit materiality (as disclosed on page 114) meets this criteria and it is therefore the materiality
we have applied. We will continue to assess our approach to ensure we remain relevant in what we measure and disclose.
Area Recommended disclosure Alfa disclosure
Governance
a) Describe the Board’s oversight
ofclimate-related risks and
opportunities.
The Chief Executive Officer (CEO) has ultimate responsibility to the Board for all ESG matters.
Climate-related risks and opportunities were presented to the Audit and Risk Committee (made up of Board members) twice in 2024. In these meetings, the Board
reviewed and discussed management’s assessment of climate risks and opportunities (see page 34), and was also updated on related progress on climate-related
matters and regulation, such as on the two sustainability reporting standards Disclosure of Sustainability-related Financial Information (IFRS S1) and Climate-related
Disclosures (IFRS S2) which are expected to replace TCFD reporting for Alfa in the near future.
In general, we see little impact of climate-related risks and opportunities on our business. This is reflective of our product, which is not significantly impacted by climate,
and the fact that we already actively seek to manage and mitigate climate-related risks. Therefore, whilst the Board has received two briefings in the year on ESG
matters, it has not spent significant time considering climate-related risks and opportunities.
Management is in currently the process of arranging an ESG-focused training update for the Board which is expected to take place in 2025.
b) Describe management’s role
inassessing and managing
climate-related risks and
opportunities.
Climate-related risks and opportunities are embedded across our operational framework, including roles and responsibilities, key policies and processes. The Chief
Financial Officer (CFO), who is part of the Company Leadership Team (CLT), is responsible for the Group’s Environmental Policy and climate change issues. He is
supported by the ESG Steering Group and the Environmental Impact team.
In 2024, the CFO was closely involved in the climate-related risk assessment, the output of which was then discussed and debated with the rest of the CLT before being
updated in the risk register. The CFO is responsible for overseeing the work being done by the Group towards meeting these commitments, and as a result was closely
involved in the supplier engagement exercise carried out in 2024, and also in the Energy Savings Opportunity Scheme (ESOS) Phase 3 audit that was completed in the
year.
Our ESG Steering Group is made up of key individuals from different areas of the business globally, and it works on the development and delivery of ESG strategy, key
policies and material commitments. Senior management, including the CFO and Chief People Officer (CPO), are part of this Group and brief the CEO and the wider CLT
on the status and progress of projects. The ESG Steering Group discussed climate-related issues in various meetings in 2024.
The Environmental Impact team, a group of volunteers from all levels of the Group, is responsible for the execution of organised activities. Initiatives recommended by
this team (and subsequently implemented at Alfa in 2024) include hands-on community clean-ups and planting projects.
Management is kept up to date on ESG matters in a number of ways – these are tailored by individual and, in 2024, included attending the ‘Net Zero Business
Transformation’ series of workshops that were run by the United Nations Global Compact.
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Task Force on Climate-related Financial Disclosures (TCFD)
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Area Recommended disclosure Alfa disclosure
Strategy
a) Describe the climate-related
risksand opportunities the
organisation has identified
overthe short, medium,
andlongterm.
Management considered the risks outlined in Table A1.1 of the TCFD Implementation Guidance as part of carrying out this TCFD disclosure review. Consideration was
also given to the SASB (Sustainability Accounting Standards Board) sector-specific materiality assessment guidance for the Software and IT Services Industry which
showed that, from an environment perspective, the key issue for our industry is energy management (which is in line with management’s current focus).
Alfa’s public commitment of having signed up to the SBTi target reduction programme increases the reputation risk associated with not being able to reduce emissions
in line with our commitment – however, management is working closely with external advisors on our emissions reduction journey and is confident that Alfa will meet
the targets set.
In the short term (2025-2027, which is consistent with our viability assessment period – see page 49), a risk that remains is management not keeping up to date with the
various climate-related regulations – again, we continue to mitigate this risk by working closely with external advisors. For example, in 2024 we worked with advisors on
our ESOS Phase 3 compliance. During this work we identified that despite being in a modern UK office with energy efficient initiatives already in place (such as motion
sensitive lighting), there was an opportunity to further improve the energy efficiency by updating certain lights to LED – in 2024 we started the process of obtaining
quotes for this project and will explore this further in 2025.
In the medium (2028-2032) to longer (2033-2050) term, we see more positives for Alfa than negatives. A move towards new lower carbon technologies is likely to result
inincreasing requirements for asset backed finance solutions (as they are generally more expensive), which will drive growth in our underlying markets. In addition,
increasing reporting requirements through the supply chain will require agile systems that can respond to the new reporting requirements, which will increasingly
demonstrate the greater flexibility of Alfa Systems over competitor products.
b) Describe the impact of climate-
related risks and opportunities
onthe organisation’s businesses,
strategy, and financial planning.
Most of our operations are in the UK and USA, and therefore these geographies will have the most impact on our climate-related risks and opportunities. We are actively
looking to reduce our carbon footprint, including reducing travel to client sites, using renewable energy options in many of our offices, and considering travel distances
and modes of transport for the location of conferences. For example, our 2024 EMEA company conference was held at a location that employees could travel to by train,
instead of by air travel. In 2024 we also announced a new partnership with Octopus Energy to make it easier for eligible employees to transition to electric vehicles.
To enable our systems to respond to increasing demands for multi-modal solutions and emissions reporting, and for Alfa to be viewed as a leader in sustainable
financing solutions, we continue to spend time understanding the ESG-related needs of our customers and investment required in the product. We hope to recoup this
investment through a combination of increased market share, as clients focus more on Scope 3 reporting and turn to ESG-compliant solutions, and increased licence
revenue for more value-added, market-leading products. We work closely with our customers to understand their evolving needs around sustainable business models
and this collaborative approach has led to the development of powerful solutions that meet their requirements, such as the recent Environmental Accounting module.
As part of the Alfa Systems 6 launch in 2024, we emphasised sustainability in our marketing releases, introducing a dedicated Sustainability pillar. Sustainability in Alfa
Systems 6 is equipped to address the sustainability goals of our customers, including having new capabilities for managing their entire asset lifecycle.
For 2024 our financial planning had factored in climate-relates costs relating to a supplier engagement exercise and purchase of carbon offsets. For the former,
asupplier engagement exercise was carried out in 2024, allowing us to engage with many of our key suppliers to better understand their sustainability maturity and
emission reduction targets. This also allowed us to derive supplier-specific emission factors for those suppliers and to use these to improve the quality of our 2024
emissions reporting. For the latter, our financial planning meant that we were able to purchase carbon offsets of 1,879 tCO
2
e from Ecologi in the year. Furthermore,
aspart of our dedication to impactful climate action, at the end of 2024 we have transitioned to working with EcoAct for our carbon-offsetting initiatives, selecting
abalanced portfolio of reduction and removal options that more closely align with our sustainability goals.
c) Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower scenario.
We conducted a high-level qualitative climate change risk and opportunity analysis to obtain a better understanding of the climate issues that could impact the business
in the future. Given the nature of our operations, we do not believe there are material risks to our organisation, other than the overall risk to the world economy. We
therefore believe that our strategy as discussed on page 14 is resilient to climate-related factors, though we have not carried out quantitative scenario analysis as yet
aspart of this review.
Our focus in 2024 was to get a better understanding of our Scope 3 emissions. A key part of this was to use supplier-specific emission factors for determining our
category 1 emissions which (as per page 32) is our largest Scope 3 category. Having been through our supplier engagement exercise in 2024 we are now able to use
supplier-specific factors to get more accurate emissions data. In 2025 to 2026, we plan to consider the impact of different climate-related scenarios on our emissions.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Area Recommended disclosure Alfa disclosure
Risk
management
a) Describe the organisation’s
processes for identifying and
assessing climate-related risks.
Our approach to identifying, assessing and managing environmental risks, including climate-related risk, is embedded within our approach to risk management.
Climate-related risks may present as financial or non-financial risks depending on the extent to which their impacts can be quantified, and how they have
beenclassified.
As explained above, we have a risk management process in place which includes a detailed assessment of our climate-related risks, along with a risk ratingassigned to
each risk which is then reviewed by management and the Board. The risk rating incorporates the potential size and scope of the identified risks.
b) Describe the organisation’s
processes for managing
climate-related risks.
In the short term we do not see any material climate-related risks for the organisation. As a consequence, we keep the risks under review, but are not actively managing
any at this point in time. We work closely with external advisors on climate-related matters and are therefore confident that this engagement helps mitigate the related
risk mentioned above of not keeping up to date with climate-related regulations. We are also actively taking steps, such as the supplier engagement exercise in 2024, to
reduce our emissions in line with our SBTi commitment (to mitigate the risk of not meeting the commitments made).
c) Describe how processes for
identifying, assessing, and
managing climate-related
risksare integrated into the
organisation’s overall risk
management.
Climate-related risks are an integral part of our overall risk management and, in particular, are discussed twice a year when considering the corporate level risks.
Moredetails on our risk management process can be seen at page 34.
We have worked closely with the ESG Steering Group and other senior management to ensure that all climate-related risks are sufficiently covered in our risk register.
Going forwards, the risk register will continue to be reviewed regularly and updated for any changes to climate-related risks.
Metrics and
targets
a) Disclose the metrics used by the
organisation to assess climate-
related risks and opportunities
inline with its strategy and risk
management process.
The main climate-related data we monitored throughout the year was our energy usage which we obtain from the energy provider and/or facilities manager of our
offices. This review was done twice in 2024.
We disclose our Carbon Intensity Ratio on page 33, which is a metric used by the Group consistently since 2021, allowing us to compare the year-on-year ratios.
Itcanbeseen that our ratio has decreased as compared to 2023, which is a result of lower emissions and higher revenue as compared to 2023.
b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse
gas (GHG) emissions, and the
related risks.
See pages 32 to 33 for our Streamlined Energy and Carbon Reporting disclosure and the methodology used for it. As seen in that table, most of our emissions come from
our Scope 3 emissions, which are 98% of our overall emissions in both 2024 and 2023. Of the Scope 3 categories, Category 1 (Purchased Goods & Services) is the largest
category, making up 46% (2023: 56%) of our Scope 3 emissions in 2024 – below we describe the work done to reduce emissions in this area.
c) Describe the targets used by the
organisation to manage climate
related risks and opportunities.
Whilst we have set medium (2030) and long term (2050) emissions reduction targets in line with SBTi (using a 2022 base year), we are currently in the process of
determining if interim targets are necessary to ensure that those targets are met, or if it is sufficient to continue with the current approach of monitoring our Scope 1, 2
and 3 emissions on aregular basis to ensure that we are on track to meeting our SBTi targets.
For our target to reduce Scope 1 and Scope 2 emissions by 42% by 2030 (against a 2022 baseline) – we are in the process of receiving quotations for initiatives that will
help us reduce emissions related to our office space, such as energy efficient lighting. Comparing only our 2024 Scope 1 and Scope 2 emissions to our baseline 2022
Scope 1 and Scope 2 (updated for the same points as for 2023 that are mentioned on page 33) shows, based on market-based Scope 2 emissions, a 32% reduction over
the period – this is primarily due to less car fleet emissions, which is a consequence of us discontinuing our earlier car scheme and moving to two new energy efficient
salary sacrifice schemes. This shows that we are making progress towards our 2030 targets.
As above, we also have a longer-term target of reducing all Scopes 1, 2 and 3 emissions by 90% by 2050 (against a 2022 baseline). Our largest category within Scope 3 is
Category 1 – in 2024 we engaged with our key suppliers to better understand their emissions and emission reduction plans. Going forwards, we plan to continue to
better understand our supplier emissions and encourage them to reduce their own emissions. We will also continue to factor supplier emissions when making decisions
onprocurement.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
The table below discloses the Group’s Streamlined Energy and Carbon Reporting for 2024 and 2023.
2024 2023
***
Global
(inc. UK) UK only
Global
(not inc. UK)
Global
(inc. UK) UK only
Global
(not inc. UK)
Energy consumption (kWh)
*****
Total natural gas use 114,786 29,917 84,869 145,751 30,886 114,866
Total company fleet use 1,063 697 365 946 362 584
Total electricity use 183,909 121,020 62,889 180,134 121,373 58,761
Total energy use 299,758 151,634 148,123 326,831 152,621 174,211
Scope 1 carbon emissions (tCO
2
e)
*****
Natural gas 21 5 16 28 6 23
Car fleet (petrol/diesel/hybrid) 0.08 – 0.08 0.22 0.09 0.14
Total Scope 1 emissions
*****
21 5 16 28 6 23
Scope 2 carbon emissions (tCO
2
e)
Purchased electricity – buildings (location-based) 49 25 24 46 25 21
Purchased electricity – electric vehicles (location-based) 0.14 0.14 – 0.15 0.15 –
Purchased electricity – (market-based)
**
0.39 0.14 0.25 1.14 0.15 0.99
Total Scope 2 emissions (location-based)
*****
49 25 24 47 25 21
Scope 3 Carbon Emissions (tCO
2
e)
*****
Category 1 – Purchased goods and services 1,388 * * 2,214 * *
Category 2 – Capital goods 45 * * 94 * *
Category 3 – Fuel and energy related activities 18 * * 19 * *
Category 4 – Upstream transportation and distribution 9 * * 4 * *
Category 5 – Waste generated in operations 5 * * 65 * *
Category 6 – Business travel (flights, rail, grey fleet, hotels and taxis) 975 * * 1,048 * *
Category 7 – Employee commuting and work from home 516 * * 422 * *
Category 8 – Upstream leased assets 73 * * 54 * *
Category 13 – Downstream leased assets – * * – * *
Total Scope 3 emissions
*****
3,027 * * 3,922 * *
Total emissions (tCO
2
e)
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Streamlined Energy and Carbon Reporting
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
2024 2023
***
Global
(inc. UK) UK only
Global
(not inc. UK)
Global
(inc. UK) UK only
Global
(not inc. UK)
Scope 1 21 5 16 28 6 23
Scope 2 (location-based) 49 25 24 47 25 21
Scope 2 (market-based)
**
0.39 0.14 0.25 1.14 0.15 0.99
Scope 3 3,027 * * 3,922 * *
Total carbon emissions (tCO
2
e) (location-based)
*****
3,098 * * 3,997 * *
Total revenue (£m) 109.9 * * 102.0 * *
Carbon intensity ratio (tCO
2
e per £million)
****
0.6 * * 0.7 * *
* Breakdown beyond global emissions has not been calculated.
** Market-based Scope 2 emissions are not included in the final emissions inventory.
*** Our Scope 1 & 2 emissions have been restated. We have corrected an oversight identified in the company vehicles mileage calculation which was compiling both business and personal mileage. Spend-based calculations for Scope 3 have been restated
with updated CEDA emission factor 2024 database which is a more accurate global representation from 2022 onwards. New Category 6 raw data on flights that had previously been missed has been included in the restated figure. The impact of these
changes is a 36 tCO
2
e reduction to the previously reported 2023 total carbon emissions (an impact of 0.9% on the total emissions).
**** Carbon Intensity figure includes only global Scope 1 & 2 emissions, in line with the approach for prior years.
***** The breakdown of the total figures are rounded to the nearest whole number and may cause minor discrepancies to the total figure when added up. The total figures are accurate.
Methodology: As a quoted organisation, Alfa is required to report its energy use and carbon emissions in accordance with the Companies (Directors’ Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations 2018. The data detailed in the table above represents emissions and energy use for which Alfa is responsible, including energy use on its sites and fuel used
inthe company fleet. Alfa has used the main requirements of the Greenhouse Gas Protocol Corporate Standard to calculate its emissions, along with the UK Government GHG Conversion Factors for
Company Reporting 2024. Part of Alfa’s Scope 3 emissions inventory was also calculated – this process included the use of UK Government GHG Conversion Factors for Company Reporting 2024,
IEAEmission Factors 2024 and CEDA 2024 Emission Factors. Any estimates included in Alfa’s totals are derived from actual data extrapolated to cover missing periods or from benchmarks.
Energy Efficiency Statement: We are committed to responsible carbon management and will practise energy efficiency throughout our organisation, wherever it is cost effective. We recognise
thatclimate change is one of the most serious environmental challenges currently threatening the global community and we understand we have a role to play in reducing greenhouse gas emissions.
We have implemented the following initiatives for the purpose of increasing the business’s energy efficiency in the relevant financial year:
• Maintained energy suppliers for the UK, US and Australia offices, ensuring continued renewable electricity provision. In 2024, we also expanded to renewable energy in the New Zealand office.
• Launched a new salary sacrifice EV car scheme in the year. This scheme will be offered in parallel to the existing scheme which also has a green focus, therefore encouraging the use of electric
vehicles in place of vehicles that run on fuel.
Group’s Streamlined Energy and Carbon Reporting for 2024 and 2023 table continued.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Alfa’s effective risk management
provides a foundation for the safe
pursuit of our strategic goals,
innovation and opportunities.
Introduction
At Alfa, robust risk management is at the heart
of our strategy for sustainable growth. Our
careful management of risks is important to
ensure that our business is resilient to external
themes, that we are mitigating where
appropriate and that we are taking action to
keep internal risks under our control. 2024 has
seen some evolution in the external risks we
face, with continuing themes of uncertainty
surrounding future economic conditions in
ourmajor regions. The resilience of the asset
finance industry which we serve, and our
diversification across regions and sectors of
this industry, are strong mitigations against
this backdrop of uncertainty. There has been
good progress on the actions we take to
mitigate against risks, most notably that we
have further bolstered our protection against
IT security and cyber risk. There is a more
detailed discussion of our principal risks on
pages 37 to 45.
We have an established governance regime
inplace for risk management (see page 36),
which puts assessment, monitoring and
controlling of risks at the heart of our strategy.
On behalf of the Board, and with oversight
bythe Audit and Risk Committee, the Risk
Management function has focused in 2024 on
identifying, understanding, monitoring and
controlling risks, as well as providing direction
on the level of risk that Alfa is willing to take
toachieve our strategic goals.
Environment, Social and Governance
(ESG) risk assessment
We put a particular focus on ESG-related risks,
and in 2024, as part of our twice annual risk
reviews, we reassessed these risks, which are
tracked within our Corporate Risk Register.
Wedo not currently have any ESG-related risks
that are sufficiently high to be considered
principal risks or uncertainties. Refer to pages
29 to 31 (Task Force on Climate-Related
Financial Disclosures) which discusses
specificrisks related to our climate change
responsibilities. We will continue to risk-assess
this area as we progress our ESG objectives
in2025.
Our risk management framework –
how we identify and manage risks
Our risk management framework is designed
to be flexible and proactive, and links tightly
into our operations, strategy and decision-
making. This allows us to react with speed and
agility to new and evolving risks as they arise,
across all of our business areas. We recognise
that managing risk effectively is integral to
executing our strategy. Our risk management
framework is a five-step process for monitoring
and managing risk throughout our business,
allowing the Directors to conduct a robust
assessment of the principal risks facing the
Group. This five-step process is shown on page
35. We take the view that risk is not something
that should be fully eliminated but, instead,
identified, assessed and managed in
atimelymanner.
Focus for 2025
• Continuous improvement of risk
management procedures, including
maintaining awareness within the
Company of our risk management
bestpractices.
• Risk identification and assessment: twice
annual risk reviews including assessing
actions and effectiveness of controls.
• Information security, cyber security and
data protection: maintain SOC1 Type 2,
SOC2 Type 2 and ISO programme
compliance, and continue to assess and
strengthen our cyber security defences.
• Business continuity and disaster recovery
scenario testing exercises, covering our
operational systems, and Alfa Cloud.
• Internal audit: provides assurance on
theadequacy of our risk management,
governance and internal control
arrangements.
• We will review current processes and
procedures to assess the extent of any
changes that may be required in order to
be fully compliant with the revised UK
Corporate Governance Code, including
Provision 29.
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34
Risk management
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Identify
risks
Assess and
quantify
Define risk
appetite
Respond,
manage and
mitigate
Monitor
and review
1
2
3
4
5
1
Whilst overall responsibility for risk lies at the Board level, the Directors have delegated authority
forrisk identification to the Company Leadership Team. A bottom-up approach has primarily been
undertaken to provide a detailed review of risks by relevant business owners and this is led by the
Risk Officer, twice a year. Each identified risk is categorised into one or more business areas, and is
assigned to the most appropriate business owner.
2
Risks are assessed to understand the likelihood and the impact of the risk crystallising. We assess
risk across all of our business areas, and we consider their level of impact to our organisation across
these categories: financial, reputational, ESG, operational, legal and regulatory. The assessed risks
are then reviewed by the CLT and the Audit and Risk Committee, to provide assurance over
completeness and quality of the risk register.
3
Our systems and processes are designed to manage our exposure to risk rather than eliminate the
risk completely. Therefore the Audit and Risk Committee, with the CLT, will reassess the Group’s risk
appetite each year with this in mind. The Audit and Risk Committee will consider the risks associated
with the conduct of our business and the delivery of our strategy, assessing the risks we are exposed
to and evaluating whether this exposure is acceptable given the likelihood and severity of the risk.
4
Each risk is reviewed at least annually, twice annually for the higher-priority risks. At each review
date, the existing controls are reviewed for adequacy and effectiveness. Due to the ever-changing
business landscape and the industry we work in, it is quite possible for the control requirements to
change and for processes and policies to require updating. If this is the case, then the business
owner is responsible for implementing changes.
5
Management monitors progress against the principal risks. This is shared with our internal auditor,
BDO, to assist with forming the internal audit plan. The Board reviews the summary risk register
andassesses the adequacy of the principal risks identified, as well as the mitigating controls and
procedures which are in place.
Our risk management framework
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Risk management continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
• The Risk Officer coordinates risk
management activities, collates the risks
intothe Corporate Risk Register, and is
anadvocate for best practice across the
organisation.
• Risk assurance is achieved through our
external and internal audits as well as
through our attainment of ISO27001 and
ISO27018 certifications, and through our
SOC1 and SOC2 audits.
Governance and responsibilities
Our organisation has an open and accountable
culture, led by our experienced CLT, whose
members have many years of experience in
their areas. The Board and the CLT set the tone
for our risk management activities, embedding
risk consideration and assessment into the
culture within the organisation. Clarity of
ownership and accountability for each risk
isanintegral part of our risk management
framework.
The Board has overall responsibility for
thegovernance of risks, ensuring we have
adequate and effective systems in place.
Itdoes this in various ways:
• Risks are considered by the Board as an
intrinsic part of our strategic planning, and
inthe consideration of new opportunities.
• There is a twice-yearly review by the
Auditand Risk Committee of principal
risks,their evolution and consideration
ofemerging risks.
• The CLT members, or their delegates, are
theowners for each risk in the Corporate
Risk Register and they, and their teams,
areresponsible for the identification,
assessment and treatment of the risks in
their own areas. Risk management is thus
embedded into each area of the business, as
they are best placed to progress the actions
and mitigations.
Top down
Governance,
identification
and
assessment of
risk by senior
management
Bottom up
Identification,
assessment,
control and
monitoring
ofrisk by
business areas
Responsibilities
Board
• Defines the risk governance framework,
risk culture and principles
• Sets the tone for risk management
including risk appetite
• Responsible for an effective system of
internal controls
• Approves risk decisions that are beyond
delegated authorities
Audit and Risk Committee CEO and CLT
• Reviews the risk management
framework and the effectiveness of
internal controls, risk management
systems and major risk initiatives
• Reviews and challenges the principal
risks in the risk register and risk ratings
• Reviews and challenges the risk appetite
• Reviews the internal audit programme
and reports
• Review the risk management framework
and the effectiveness of internal controls,
risk management systems and major risk
initiatives across the Group
• Review the risk profile against risk appetite
and make recommendations to Board
inrelation to risk profile, strategy and
keycontrols
• Review and challenge the risk register
andrisk scores
• Review the sustainability of risk
methodologies, metrics and policies
• Assess major risk-related projects
• Assess new commercial arrangements
through participation in the
DealCommittee
Risk Officer and CFO Operational Management
• Responsible for collating updates,
managing the risk register and
presenting principal risks and
uncertainties to the CLT and Audit and
Risk Committee
• The Risk Officer acts as an advocate
forrisk management across all levels
ofthe business
• The Risk Officer reports to the CFO in
relation to risk management matters
• The CFO has responsibility for
governance and risk management review
• Assesses for new risks, updates on current
risks assessment and implements
mitigation strategies and actions
All employees
• Be alert to risks associated with the
activities that they perform
• Report inefficient, unnecessary or
unworkable controls
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Risk management continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Probability
Impact
Risks
A
Socio-economic and
geo-politicalrisk
B
Risk to people, team, capacity
andskills
C
IT security and cyber risks
D
Business interruption
andcontinuity
E
Foreign exchange rate uncertainty
F
Pressure on margin due to
increased cost base, or through
increased competition
G
Competitive pressure may lead
toa loss ofmarket share in our
target markets
Acceptable risk appetite
Movement since 2023
Principal risk heat map
B E
A
C
F
G
D
Our risk appetite
Our risk appetite provides us with guidance
onthe levels of risk we are prepared to take
inpursuit of our objectives and is considered
afundamental part of the planning and
execution of our strategy. Our risk appetite
isassessed across the following categories:
strategic, financial, legal, operational and
ESG.Each of these areas has different
considerations and it is important that we are
setting the correct tone for decision-making in
each area. These are then consolidated up to
determine our overall risk appetite.
In December 2024, the Board, assisted by
theAudit and Risk Committee and the CLT,
assessed and updated our risk appetite in light
of the developing in-year and emerging risks.
Overall, we take a cautious approach to risk,
aiming to operate in a manner that would
notbe expected to put the business at risk
ofsignificant financial, operational or
reputational damage. It is recognised that an
element of risk-taking is necessary in order to
seek out and pursue opportunities, including
progressing our strategic objectives.
Nevertheless, the risks associated with the
pursuit of such opportunities should be
commensurate with the level of reward
expected from the opportunities.
Principal risks and uncertainties in
more detail
The Group faces a number of risks that may
adversely affect our strategic and business
objectives, operations, liquidity, financial
position, reputation or future performance,
notall of which are wholly within our control or
known to us. Some such risks may currently be
regarded as immaterial and could turn out to
be material. We accept that risk is an inherent
part of doing business.
The Board consider the following matters
tobethe principal risks and uncertainties
(inno specific order) affecting our business
atthistime.
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Principal risks and uncertainties
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Risk A – Socio-economic and geo-political risk
Link to strategy
1
2
3
Movement compared
to2023:
Reduced level of risk, with a
lower probability of impact
Potential impact
Major
Probability
Possible
How does it impact us?
External economic or political conditions might cause a drop in demand for
ourservices in one or more of our regions. There are a wide variety of external
factors that could lead to this, such as the geo-political tensions caused by the
war in Ukraine, instability in the Levant, changes in government policy (such as
US trade policies or UK tax policies), or regulatory action impacting the asset
finance industry (such as the FCA rulings on discretionary commission). These
factors may result in unfavourable conditions for asset finance (such as high
inflation and interest rates), difficulties in operating in key regions or lower spend
directed to technology services such as ours. It is important to note thatwe do
not have customers nor operations in Ukraine, in the Levant, nor elsewhere in
the Middle East, so do not have direct exposure to those regions.
In 2024, our assessment of these uncertainties has led to us downgrading the
level of risk. This is due to the effectiveness of the mitigations we have in place,
and the resulting resilience of our business.
At the point of publishing this report, there are a variety of emerging situations
inthe global geo-political and economic system. We are monitoring these
developing situations to assess any impacts on Alfa, but we have not so far
determined that they alter the level of this risk. There is further discussion on
pages 44 to 45 around some of these emerging risks.
This risk goes hand-in-hand with opportunity, as our customers may seek to
adapt to the changing economic environment, seeking operational efficiency,
introducing new products or reacting to regulatory changes. Alfa is well placed to
help with the systems and process changes needed for such adaptation, either
where Alfa Systems is the incumbent system or where a new system is needed.
How we mitigate
Strategy for diversification: Our strategy aims to diversify our customer base,
both geographically and by asset type (i.e. automotive, equipment) but also by
type of customer (i.e. banking, OEM or independent). This gives us resilience in
the face of uncertainty.
Our shift towards subscription revenue builds further resilience.
Financial robustness: We retain cash reserves, and achieve prompt collection
ofour fees, ensuring financial resilience.
Our fees are generally increased annually, taking consideration of the increases
experienced in our cost base.
Customer alignment: We maintain strong relationships with our customers
ineach market, with close collaboration on strategic aims and growth
opportunities, to adapt to changing market conditions.
Progress highlights in 2024
Decreasing customer concentration: 21 customers contributed more than
£2m in revenue (19 in 2023), reducing our reliance on our largest customers.
Strategy for diversification: Our subscription revenue has continued to grow,
contributing 34% of our revenue (2023: 31%).
We have reinforced our geographical diversification, with successful go-lives in
the USA and EMEA.
Total Contract Value (TCV): Our TCV has grown to £221m (2023: £165m), giving
confidence in the forward demand for our services.
Customer alignment: The launch of Alfa Systems 6 has included a variety of well
received customer engagement sessions, helping to identify opportunities to
upsell to our clients.
Our strategic priorities
1
Strengthen – Grow our differentiation of
market-leading People, Product and Delivery.
2
Sell – Focus on cloud-hosted,
subscriptionsales toour target markets.
3
Scale – Increase our capacity for
developing and delivering Alfa Systems.
4
Simplify – Simplifying our product, implementations
andprocesses to enable more concurrent Alfa Systems
implementations.
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Principal risks and uncertainties continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Risk B – Risk to people, team, capacity and skills
Link to strategy
1
3
Movement compared
to2023:
Same level of risk
Potential impact
Moderate
Probability
Likely
How does it impact us?
We are a people-centric organisation, with our success heavily dependent on
keeping the right culture, skills and teams in place to execute our strategy.
A failure to attract, train and retain high-quality individuals in our key operating
regions may limit our ability to deliver implementations, maintain product
quality and leading-edge functionality, and manage customer relations. This
would impact our ability to deliver on our strategic plan.
As such, this risk remains at the same level as previously.
How we mitigate
Recruitment of graduates and experienced hires is continuing across all of
ourregions, with dedicated HR staff searching for candidates from varied
backgrounds and ethnicity and with varied core skills.
Partnering provides a strong and growing network of professional services
partner organisations, with extensive and established geographical presence.
This provides us with resourcing flexibility, and wider geographical coverage.
Learning and development: Our diligent onboarding process gives our new
joiners the knowledge to help them to succeed. We endeavour to maintain
aculture centred around our principles and values, and we have a strong focus
onemployee satisfaction and wellbeing.
Employee engagement: Surveys are carried out every quarter, and allow areas
for improvement to be identified and acted upon.
Remuneration: We benchmark our remuneration levels against relevant roles
inthe industry and aim to be competitive.
Progress highlights in 2024
Retention & employee engagement: Retention has remained high, at 96%
similar to 2023: 97%). Employee engagement has remained at similar high levels
to 2023 (2024: 82%, 2023: 82%). Our Talent Manager, hired in2024, is working
onmaximising opportunities for our employees and this will further
supportretention.
Recruitment: We have continued to strengthen and grow our team, with active
recruitment of top-quality talent across many areas of the business, in the USA,
Europe and Asia-Pacific.
Learning and development: We have focused in 2024 on helping people to
learn the right skills at the most effective time. We have improved our role-
specific coverage, and redesigned our induction programme.
Our strategic priorities
1
Strengthen
2
Sell
3
Scale
4
Simplify
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Principal risks and uncertainties continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Risk C – IT security and cyber risks
Link to strategy
1
2
3
4
Movement compared
to2023:
Reduced level of risk, with
alower probability of impact
Potential impact
Major
Probability
Unlikely
How does it impact us?
Our systems, networks and products may be subject to cyber attacks,
specifically designed to disrupt our business, obtain our intellectual property or
data, or harm our reputation. A successful cyber attack could impinge upon our
ability to operate our business, including our ability to continue providing
support to our customers.
Our Alfa Cloud offering stores our customers’ data on third party cloud hosting
platforms. A security breach in our Alfa Cloud offering could result in compliance
violations, identify theft, malware infections, diminished customer trust and loss
of revenue.
There is a continuing global trend of cyber attacks against organisations,
including large-scale, sophisticated and coordinated attacks. We take this risk
extremely seriously, and in 2024 we have strengthened our cyber security and
information security protections, across our landscape. As a result of the actions
taken and proactive protections we have in place, our level of risk across this
area has been downgraded relative to 2023.
How we mitigate
Monitoring and control: Our Information Security team monitors key security
and cyber risks, and assesses and monitors the control framework of our key
technology suppliers. Our Managed Detect and Respond service undertakes
day-to-day monitoring for IT security incidents.
Continuous improvement: We implement continual improvements in our
ITcontrol environment.
Employee education: We maintain an annual education and training
programme for all staff, covering Information Security, Data Privacy and
Business Continuity.
Customer assurance: Our customers perform thorough assessments of
thesecurity of the Alfa Cloud platform during their system selection and
implementation process, measuring our processes and controls against their
own, typically stringent, internal policies. These compliance checks sit alongside
our own policies and procedures, and provide independent assurance for our
customers that appropriate security controls are in place.
Progress highlights in 2024
Assurance around controls: We have maintained our SOC1 Type 2, SOC2
Type2, ISO27001 and ISO27018 compliance in 2024.
Monitoring and control: We have implemented an industry best-practice
Managed Detect and Respond service, whilst continually improving and
strengthening our internal controls and Information Security team.
Our strategic priorities
1
Strengthen
2
Sell
3
Scale
4
Simplify
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Principal risks and uncertainties continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Risk D – Business interruption and continuity
Link to strategy
1
2
3
Movement compared
to2023:
Same level of risk
Potential impact
Major
Probability
Unlikely
How does it impact us?
We are at risk of disruption to our day-to-day operations if there is a disaster
incident which causes our internal IT systems to fail, or if we do not have access
to our office space, or if significant numbers of our personnel are unavailable.
A failure to be able to use key IT systems or access our infrastructure could lead
to a failure to deliver our services (particularly urgent maintenance services in
the event of a disaster) to our customers and therefore have a negative
reputational impact.
This risk includes consideration of future pandemics.
How we mitigate
Established procedures: We have an established, detailed and tested incident
management procedure and escalation process.
Assurance around procedures: We have a disaster recovery and business
continuity plan which is reviewed and tested annually, and is included in the
SOC1 Type 2 and SOC 2 Type 2 audits. This includes an impact analysis exercise,
which identifies key systems, and assigns clear ownership of each of those
systems and their business continuity plans.
Alfa Cloud procedures: Where we provide Alfa Cloud hosting services, using
third party cloud hosting suppliers, we have annually-tested disaster recovery
plans which initiate automatically if a server or a region becomes unavailable.
Inaddition, if a cloud provider ceases to operate, we have a continuity plan in
place to transfer our customers’ data to a similar supported environment.
Global distribution: We have a geographically distributed workforce, and the
majority of our key systems are cloud-hosted, providing resilience against an
event impacting one particular location.
Progress highlights in 2024
Continuous improvement: We have expanded our pre-planned coverage of
incident response scenarios, further improving our preparedness.
Testing: We have successfully tested key business continuity processes,
including system failover and disaster recovery, across both our corporate
network and systems, and Alfa Cloud.
Assurance: Our SOC1 Type 2 and SOC2 Type 2 reporting and complete failover
testing has identified no significant required remedial actions.
Our strategic priorities
1
Strengthen
2
Sell
3
Scale
4
Simplify
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Principal risks and uncertainties continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Risk E – Foreign exchange rate uncertainty
Link to strategy
1
2
3
Movement compared
to2023:
Same level of risk
Potential impact
Moderate
Probability
Likely
How does it impact us?
There has been considerable fluctuation and volatility in currency exchange
ratesthroughout 2024, as a result of factors such as those listed in Risk A – Socio-
economic and geo-political risk. There is a risk of continued volatility in 2025.
As we expand our operations, both in the EU and in the USA, our exposure to
currency volatility increases.
How we mitigate
Currency diversification: Our spread of revenue and costs across different
regions, and currencies, provides a degree of natural hedging against volatility.
Hedging: We closely monitor exchange rates, and take appropriate action, such
as converting excess funds to sterling, and entering into forward contracts to
hedge against short-term risk.
Progress highlights in 2024
Hedging: As part of our foreign exchange risk management, in 2024 we entered
into forward foreign exchange contracts to limit our exposure to exchange
ratevolatility.
Risk F – Pressure on margin due to increased cost base, or through increased competition
Link to strategy
1
2
3
4
Movement compared
to2023:
Same level of risk
Potential impact
Moderate
Probability
Likely
How does it impact us?
External factors may lead to our cost base increasing faster than we can increase
our revenues, leading to a drop in margin. These factors could include high
inflation, leading to increased supplier costs, and increased technology sector
salaries. We note that whilst inflation has dropped in our key regions, there is
uncertainty in the global economic outlook which could once again lead to higher
inflation (these factors are also components of Risk A – Socio-economic and
geo-political risk). We may also see competitors offer similar services at lower
rates, forcing us to reduce revenue in order to remain competitive. Without
appropriate mitigation these would reduce our margins.
How we mitigate
Annual fee increases: Our fees for services are generally increased annually,
taking consideration of the increases experienced in our cost base.
Pricing governance: Our Deal Committee has oversight of our pricing policy,
making sure that our pricing is correctly targeted.
Differentiators: Our strategy is to maintain and grow our differentiation of
market-leading people, product and delivery, and these set us aside from our
competitors, making us a compelling choice to ensure success in the kind of
complex technology transformation projects that we deliver.
Simplification: Our simplification objectives are targeting more efficient
implementations, further strengthening our competitiveness.
Progress highlights in 2024
Sales conversions and delivery successes: We have converted eight prospects
into customers, and have had a strong year for implementations, with 26 go-lives
and upgrades. This demonstrates the strength of our differentiators – our
market-leading people, product and delivery.
Our strategic priorities
1
Strengthen
2
Sell
3
Scale
4
Simplify
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Principal risks and uncertainties continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Risk G – Competitive pressure may lead to a loss of market share in our target markets
Link to strategy
1
2
3
4
Movement compared
to2023:
Same level of risk
Potential impact
Major
Probability
Possible
How does it impact us?
Our competitor landscape is constantly evolving, with changes such as
M&Aactivity and private equity investment. We are seeing competitors
targetingour key regions (EMEA and USA), and focusing development of their
product offerings.
There is also the possibility of disruptive competition, for example from big tech
companies moving into auto sales (this is discussed as an emerging risk, see
page44).
This risk is tightly-linked to Risk F – Pressure on margin due to increased cost
base, or through increased competition.
How we mitigate
Differentiators: Our strongest mitigations are our differentiating features: the
quality of our product, delivery record and people. Our strategy aims to retain
and develop these, enabling us to be the global platform of choice across the
asset finance industry.
Customer alignment: We ensure that we are closely-aligned with customer
needs, and hence with market needs, through the active engagement with our
customers, via our client-facing teams, and the Markets and Products team.
Thisalso guides our investment programme, allowing us to target our product
investment on the areas of most interest to the market.
Competitor analysis: We regularly review our competitor landscape, keeping
up-to-date with trends and their progress in product and delivery, to ensure that
we are adapting to protect our competitive edge.
Progress highlights in 2024
Sales conversions and delivery successes: As highlighted for Risk F, we have
converted eight prospects into customers, and have had a strong year for
implementations, with 26 go-lives and upgrades. This demonstrates the strength
of our differentiators – our market-leading people, product and delivery.
Customer alignment: The launch of Alfa Systems 6 has included a variety of
customer engagement sessions, ensuring that we are aligned with, and investing
in,our customer needs, and identifying opportunities to upsell to our clients.
Our strategic priorities
1
Strengthen
2
Sell
3
Scale
4
Simplify
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43
Principal risks and uncertainties continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Emerging risks
Emerging risks are those that, whilst not considered current, may become significant risks over a longer timeframe. We incorporate emerging risks into our regular twice annual risk review exercises,
andthey are assessed in a similar way to the rest of the risks in the register, including the assessment and identification of mitigating measures.
Our key emerging risks are presented below:
Emerging risk Description Mitigation
Artificial Intelligence
(AI)
There is a risk that AI will result in an acceleration of novel methods
of cyber attack.
There is also a risk of competition from novel AI products or
technologies, which could reduce our market share.
Our Information Security team stays up to date with the latest security and threat environment,
andwe have specialist advisory assistance in this regard. This is considered a component of Risk C
– ITsecurity and cyber risks, and the steps taken for that risk are all relevant here.
AI presents both risks and opportunities for our organisation, and we are actively engaged in strategic
and innovative exploration and uses of AI.
Technology
competition
We may face competition from new entrants into the asset finance
market, such as from big tech, who may disrupt the asset finance
technology sector.
We are specialists in the asset finance industry, and our product strategy seeks to keep us in step
withindustry needs. We are closely engaged with our customers, to ensure that we can help them
toremain on the leading edge of technology developments.
Disruption of the
global auto finance
industry
Our auto finance customers may face significant competition
fromnew entrants into their markets, for example Chinese auto
manufacturers disrupting the European electric vehicle market.
Thismay reduce the market share held by our current core
customers, thus reducing their spend on our services.
We closely monitor change in the industries and markets we serve. Our Markets and Products team is
closely engaged with our customers, and with the wider industry, so that we can remain ahead and
prepared for new trends, and our Alfa Systems 6 product advancements have targeted these.
This risk also presents opportunity for us, our customers will need to adapt, which involves
technology change, of which we are at the forefront. In addition, new entrants to our markets
meanspotential new prospects for us.
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44
Principal risks and uncertainties continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Emerging risk Description Mitigation
Trade or tax policy
changes
New governments in the UK and USA may implement new policies
which impact our industry, or those of our customers. Taxation and
trade policies are areas of focus for these new governments. It is
possible that currently unknown policies will be implemented that
mean further higher taxation (for example in the UK), or which
introduce barriers to trade (for example into or out of the USA).
Our diversification across regions and industries provides some protection, if our clients are impacted
by policy changes. This also reduces the impact of some forms of tax policy changes, such as UK
employment taxes, or tariffs for our services, as we have staff spread across our regions.
Software and services provided from the UK into the USA have not previously been subject to trade
tariffs, and there is no current indication that such tariffs will be applied.
Trade policy changes or tariffs might have the effect of protecting some of our customers (for
example in the USA), rather than harming them.
UK decision on
motor finance
commissions
The UK Court of Appeal ruled against certain motor finance
companies in the UK, who had not disclosed to customers certain
discretionary commissions. This has resulted in UK motor finance
companies provisioning for compensation action. This might
extendfurther into the asset finance industry (and wider financial
services), resulting in more pressure on IT spend by our customers
or prospects.
Once again our diversification across regions and industries provides protection from a tightening
ofIT spend in one region or industry.
With such challenges comes opportunity for technology providers, and we are well placed to assist
our customers in adapting their technology to this change.
We have seen our customers take advantage of the adaptability of Alfa Systems to ensure that they
are being proactive in meeting the latest guidance on disclosing commissions to their customers.
Increasing
regulatory burden
for our clients
An increasing or harsh regulatory landscape for our clients may
seethe reduction or withdrawal of asset finance activities, or a
reduction in budgets put towards IT spend.
Our diversification across regions and industries provides protection from a tightening of IT spend in
one region or industry. The asset finance industry has historically proven very resilient and adaptable
towards challenges such as increased regulation.
With such challenges comes opportunity for technology providers, and we are well placed to assist
our customers in adapting their technology to this change.
Increasing
regulatory
requirements on Alfa
There is a possibility that increasing regulation and governance
requirements on Alfa (such as corporate governance, or regulation
of our Alfa Cloud services) may result in overheads increasing faster
than we can increase our revenue, and/or reduced efficiency.
We price our services in order to incorporate these costs, and our customers view regulatory coverage
as an important component of this service.
We seek appropriate assurance and advice on regulatory matters, and seek to outsource expertise
where appropriate, which can aid our efficiency.
There is clear delineation for regulatory compliance, in general limiting Alfa’s responsibility to that
appropriate to a software and SaaS supplier, and ensuring that clients are responsible for the
appropriate financial services regulation, subject to the exact nature of each regulation.
Strategic report Additional informationCorporate governance
Financial statements
45
Principal risks and uncertainties continued
Our culture: incorporating our
engineering principles
Our teams are encouraged to actively
apply and reflect on Alfa Systems
engineering principles in their day-to-day
work. This ensures that we maintain
acustomer- and delivery-focused mindset,
allowing us to elevate our work and
continuously innovate.
By embedding these principles into our
culture, we foster a responsive, flow-
oriented approach to engineering, which
isessential in a fast-paced environment.
Prioritising learning, collaboration, and
celebration, we build a resilient foundation
for sustained success. Together, we
strengthen our culture, embrace change,
and illuminate the path forward.
Additionally, our communities of practice
are empowered to share knowledge both
within their groups and across Alfa,
fostering a culture of collaboration and
continuous improvement.
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Stakeholder engagement
Understanding the
expectations of our
stakeholders
Understanding the expectations and
requirements of our stakeholders is
essential to achieving our strategic
goals and ensuring long-term
success. We are committed to
maintaining open, consistent and
constructive engagement to
strengthen relationships with our
stakeholders, gain deeper insights
into their priorities and effectively
respond to their feedback.
For further information on how
stakeholder considerations
influenced the Board’s discussions
and decision-making, refer to our
section 172(1) statement in the
Corporate governance report on
pages 62 to 65.
Employees
Our employees are at the heart of everything
we do. By actively listening and fostering
aflexible, supportive and inclusive
environment, we attract, develop and
retaintop talent. This enables us to deliver
against our strategic priorities and develop
our people.
• We remain committed to diversity, equity,
and inclusion (DEI), ensuring these
principles guide our decision-making.
• To keep our workforce informed, we hold
regular global and regional Meetings,
Conferences and Town Halls, sharing
updates on projects, strategy and
performance. Key corporate objectives
and progress are cascaded through
management for broader communication.
• The objectives and progress of our
corporate objectives are also cascaded
tothe wider management team for
onward communication.
• We conduct a quarterly, anonymous
Employee Engagement Pulse survey to
encourage candid feedback. Focus groups
explore specific themes raised, and the
CEO and CPO regularly report survey
insights to the board.
• Our flexible, inclusive work structure
fosters collaboration and innovation,
balancing team connection with business
success. Through our DEI survey, we
continue to gather feedback on our
progress and areas for improvement.
• We’ve expanded our Learning &
Development programmes with fresh,
dynamic content and new courses,
empowering employees to grow
andthrive.
• In EMEA, we introduced London Calling;
this is an opportunity for all EMEA
employees to come into the office, get
together in teams and connect with
colleagues over two days.
• In the USA, we held two Collaboration
Weeks where US employees come
together to work in one location. They
include various sessions with different
groups, a Company Meeting or Hackathon,
as well as a half-day activity.
46
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Strategic report
Partner Forum 2024
In October 2024, we hosted an event in
Downtown Detroit for over 40 senior
executives, customers and guests to
celebrate the full release of Alfa Systems 6,
the latest iteration of our SaaS platform. The
event highlighted completed enhancements,
provided a roadmap for future
developments and included an engaging
client voting session for their favourite
enhancement. The voting revealed diverse
preferences, with notable interest in
sustainability enhancements and practical
features like setting miscellaneous
information via business rules.
A session on Iterative Development sparked
enthusiasm among customers about
adopting this new approach. Additionally,
alively discussion on AI followed, where we
shared insights into feasibility assessments,
successes andlessons learned while
gathering valuable input on our current AI
pipeline. This feedback aligned closely with
our June 2024 EMEA Focus Group findings.
The day continued with breakout sessions
onkey topics: Enhancement Sharing and
SIPartners, ESG regulatory impacts, and
Innovation, each led by subject matter
experts. To conclude, attendees voted on
thenew logo for Alfa Connect, the 2025
partner forum and user group, with a clear
favourite emerging.
This event fostered meaningful engagement,
provided actionable insights and reinforced
our commitment to innovation and client
collaboration.
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Stakeholder engagement continued
Customers
Our customers are at the heart of our
business and we aim to make them
future-ready, by delivering our leading-
edge technology.
• Our Markets and Products team actively
engages with existing and potential
customers to understand their
challenges and promote Alfa and the
Alfa platform.
• We continually look to simplify our
implementations, and Alfa Cloud is
asignificant contributor to that. At
year-end we had six implementations
underway using Alfa Cloud.
• By regularly hosting customer focus
groups, we gain valuable insights
intocustomer sentiment and
identifyopportunities to enhance
theirexperience.
• We continue to improve the Alfa
Development Model, to maximise value
for our customers. We allocate
dedicated resources to high-priority
initiatives while progressing lower
priority projects incrementally.
• We continue to innovate and evolve,
helping our customers expand
theirbusiness and stay ahead of
thecompetition.
• The launch of Alfa Systems 6 in 2024
showcased how our platform enables
providers to meet the growing demand
for sustainability-focused products and
transformative business models.
Suppliers and partners
Building trusted partnerships and
developing relationships with suppliers
through ongoing dialogue helps us better
understand our partners’ needs and
develop and improve our offering.
• Following the launch of our Supplier
Onboarding process in 2023, we
introduced a process for regular review
of major recurring suppliers. This
ensures that the suppliers we choose to
work with share our values, in particular
those in relation to ESG, as well as
meeting our compliance and due
diligence requirements.
• Our Partner Forum provides an
independent community for Alfa’s
customers to openly collaborate, learn
and innovate through the exchange
ofknowledge, ideas, solutions and
experiences in relation to Alfa and
AlfaSystems.
• Alfa formed a new strategic partnership
with [gaidnts], an IT consultancy
start-up founded by EGC EuroGroup
Consulting in Germany to enhance
technology solutions for asset finance
and leasing.
• We are focused on engaging with
suppliers to understand our
emissionsdata.
47
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Strategic report
The evolution of Alfa’s technology
Several investors requested a demonstration of Alfa Systems. In response, group investor
sessions were held at Alfa’s head office, covering a number of broad investor relations topics
and including a live demonstration of Alfa Systems. These demonstrations were well received
and prompted further questions about key architectural decisions that shaped Alfa Systems.
As a follow-up, a discussion between the CEO and CTO on the evolution of Alfa Systems’
technology was recorded and shared with investors and other interested stakeholders and is
available to view on our website at www.alfasystems.com/news-and-insights/2025_cto_tech.
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Investors
Alfa places great importance on having positive relationships with all our investors and seeks
to ensure there is an appropriate and constructive dialogue with all our investors.
• An open dialogue was maintained with institutional investors, updating investors
onprogress and keeping the Board informed about investors’ views and priorities.
• Shareholder engagement is the responsibility of the CEO and CFO. They manage and foster
Alfa’s relationships with investors and analysts.
• Our meetings with investors provide an opportunity for management to engage directly on
the performance and strategy of Alfa.
Communities and environment
At Alfa, we are committed to adding value
toour communities. Our employee-led
community groups provide safe spaces for
colleagues to advocate for important issues,
support one another and contribute to
organisational change.
• As a signatory of the UNGC, the world’s
largest corporate sustainability initiative,
we leverage this collective force to
maximise our impact.
• We have also partnered with EcoAct for
our carbon-offsetting initiatives, selecting
a balanced portfolio of reduction and
removal strategies aligned with our
sustainability goals.
• Our commitment to achieving net-zero
emissions remains steadfast, guided by
SBTi validated reduction targets. This year,
we continued our journey by refining our
approach to emissions data collection,
including engaging with our key suppliers
on their emissions and targets.
• Our ESG Steering Group includes
members from across the business and
our CFO and CPO. The Group meets
monthly to set goals, track progress and
guide Alfa’s employee-led communities.
We provide funding for carbon-
offsettingprojects.
• The Alfa Environmental Impact team
operates across APAC, EMEA and the USA,
raising awareness and driving meaningful
action. From sustainability talks to
hands-on community clean-ups and
planting projects, our teams work to make
a difference.
• Our communities are a vital part of Alfa’s
culture. They offer a safe space for open
discussions, raise awareness on key topics
and actively promote DEI within Alfa
andbeyond.
• Additionally, we continue to fundraise for
charities and support causes that matter
to our colleagues.
48
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Strategic report
Stakeholder engagement continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Assessment of prospects
Alfa is one of the leading providers of software
to the asset finance industry and it is the
Group’s clear focus to increase its relatively
small market share in this space by:
• Growing differentiation of market leading
People, Product, and Delivery;
• Enabling profitable growth by focussing on
Alfa Cloud, Subscriptions, Incremental sales
and our Target markets;
• Increasing our capacity for developing and
delivering Alfa Systems; and
• Enabling more concurrent Alfa Systems
implementations, more efficiently.
During the year ended 31 December 2024,
theGroup generated profit before tax of
£34.1 million and was cash-generative with
netcash generated from operating activities
amounting to £28.4 million.
Taking into account the Group’s current
position and its principal risks and
uncertainties as described on pages 37 to 45
ofthis Annual Report, the Directors have
assessed the Group’s prospects and viability.
Assessment period and process
The strategy and business model as set out on
pages 14 to 18 and page 5 are central to an
understanding of its prospects. These inputs
provide a framework for assessing the Group’s
prospects and viability.
The three-year timeframe for assessing both
prospects and viability is considered to be
appropriate because:
• It reflects reasonable expectations in terms
of the reliability and accuracy of operational
forecasting models; and
• Projections looking out beyond three years
become significantly less meaningful in the
context of the fast-moving nature of the
asset finance industry and the software and
technology landscape.
The Group’s prospects are assessed primarily
through its annual planning process, led by the
CEO with the CLT. All relevant functions are
involved, including finance, sales, recruitment
and resourcing, and commercial.
The Board participates fully in the annual
process and has the task of considering
whether the plan appropriately takes into
account the external environment, including
technological, social and macroeconomic
changes, as well as the risks and uncertainties
of the business.
The output of the annual review process
includes the annual financial budget and an
analysis of the risks which could prevent the
plan being delivered.
Detailed financial forecasts which include
profit, cash flow and key financial ratios have
been prepared for the three-year period to
December 2027.
The first year of the financial forecasts forms
the Group’s 2025 budget and is subject to a
reforecast process each quarter. The second
and third years are prepared in detail based
onthe Group’s three year strategic planning
process and are flexed based on the actual
results in the first year.
Assessment of viability
The Board’s assessment of the Group’s
prospects, as described on this page, has
beenmade with reference to current market
conditions and known risk factors, as described
in principal risks and uncertainties on pages 37
to 45.
The Board has considered the Group’s financial
performance in 2024, and the risk factors
noted above and consider that the key risks
which could have a major impact on the
delivery of the Group’s financial objectives
areas follows:
Risks to people, teams and skills impacting
ourcapacity to deliver services to customers;
Pressure on margins due to increased cost
base, or through increased competition; and
Competitive pressure leading to a loss of
market share in our target markets.
Conclusion
It was determined that none of the individual
risks would, in isolation, compromise the
Group’s viability. The Directors therefore
reviewed the outputs of the alternative
forecasts which were produced to model the
effect on the Group’s liquidity and solvency
ofsevere but plausible combinations of the
principal risks and uncertainties affecting
thebusiness.
Scenario 2 reflects the combination of all risk
factors identified and is considered a ‘worst
case scenario’. The Directors consider that
thisscenario addresses the key risk factors
outlined above.
Based on the current commercial outlook,
Scenario 2 is considered extremely severe and
has been prepared for the purpose of creating
outcomes that have the ability to threaten the
viability of the Group.
Strategic report Additional informationCorporate governance
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49
Viability statement
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
In the case of such a scenario crystallising
theGroup would be required to take some
mitigating actions largely related to the level of
headcount in the business, the level of partner
usage and discretionary spending. In addition
there are many other different levers that
could be pulled to further minimise the
financial impact and maintain liquidity to
continue in operation.
Revenue and profitability are clearly affected in
this alternative scenario, however based on the
Group’s existing cash reserves, combined with
incremental cost reduction measures, the
business would retain sufficient cash reserves
to continue in operation throughout the
three-year forecast period, with the lowest
cash balance modelled in this period of £8.1m.
Whilst it is acknowledged that there is
continued uncertainty over future economic
conditions, based on the assessment of
prospects and viability, the Directors confirm
that they have a reasonable expectation that
the Group will be able to continue in operation
and meet its liabilities as they fall due over the
three-year period ending 31 December 2027.
Scenario 1:
This scenario assumes no conversion of sales
pipeline, cancellation of one major ongoing
customer project in 2025, reduction in
uncontracted work for existing customers
andprices held constant in order to retain
customers, resulting in a 27% reduction from
base case revenues by 2027.
Employee retention rates reduced and
resulting in a 13% reduction in headcount
frombase case by 2027 and partner usage
isreduced by 100% from base case in 2026
and2027.
Direct costs relating to partner usage and
cloud hosting services are significantly reduced
in line with customer activity, however salary
costs per person increase as a result of labour
market factors and the need to retain
personnel. Overheads including SG&A salaries
reduced in line with headcount, and the level
ofbonuses and profit share are also reduced
inline with performance.
In this scenario there would be nopayment
ofspecial dividends after June 2025, however
annual ordinary dividends and share
purchases for option vestings would continue
as plannedand no other mitigating actions
taken, as a result otheroperating costs remain
in line with the base case.
Scenario 2:
This scenario assumes no conversion of
salespipeline as well as a significant loss of
customers including cancellation of three
major ongoing customer projects during 2025
and termination of subscription contracts
representing 27% of subscription revenues.
This scenario results in a 35% reduction from
base case revenues by 2027.
Employee retention decreases from base case
in this scenario, where no recruitment occurs,
but no redundancies made; this results in a
24% reduction in headcount from base case by
2027. Partner usage is reduced by 100% from
base case in 2026 and 2027.
Direct costs are reduced further than in
Scenario 1 as well as further reductions in
operating and capital expenditure in line with
headcount. Salary increases are maintained
inorder to retain personnel. No bonuses
arepaid and profit share reduced in line
withperformance.
In this scenario there would be no payment of
special dividends after June 2025, and annual
ordinary dividends and share purchases for
option vestings would be reduced in 2026
and2027.
The Strategic report and Financial review are
approved by the Board of Directors and signed
on its behalf by:
Andrew Denton
Chief Executive Officer
Strategic report Additional informationCorporate governance
Financial statements
50
Viability statement continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Corporate
governance
52 Chairman’s introduction
53 Code compliance
54 Board of Directors
56 Company Leadership Team
57 Our governance framework
58 Board leadership and Company purpose
61 Board activities
62 Engaging with our stakeholders and
Section172statement
66 Division of responsibilities
68 Composition, succession and evaluation
71 Nomination Committee Report
76 Audit and Risk Committee Report
83 Remuneration Committee Report
85 Annual report on remuneration
100 Directors’ Remuneration Policy
104 Alignment of Remuneration Policy
105 Directors’ report
110 Statement of Directors’ responsibilities
51
Additional information
Financial statements
Strategic report Corporate governance
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Key to Alfa’s long
term success is
maintaining our unique
culture as we grow.
Andrew Page, Executive Chairman
Dear Shareholders,
On behalf of the Board, I am pleased to present
the Group’s corporate governance report for
the year ended 31 December 2024.
This report outlines how Alfa’s governance has
continued our commitment to growth and
resilience, and has helped deliver another
strong set of results. As we reflect on this year,
the Board would like to share some significant
developments that align with our long term
vision for the Group.
One of the most important areas of focus
forthe Board during the year was the
advancement of Alfa’s strategy. This included
the exploration of strategic opportunities,
increase to subscription revenue and
expansion into new markets, which together
will enable our continued success and future
growth in the coming years. The key to Alfa’s
long-term success is maintaining our unique
culture as we grow.
In June 2024, we welcomed Reena Raichura
tothe Board as a new independent Non-
Executive Director. Reena brings extensive
experience in both product and technology
which has strengthened our expertise
andimproved our ability to make
strategicdecisions.
We were delighted to receive strong
shareholder support for our new Directors’
Remuneration Policy. This endorsement
reflects the trust you place in our Board to
make fair, transparent and performance
aligned compensation decisions that drive
longterm value.
Throughout 2024, we made significant
strategic progress, strengthening our
competitive position with the launch of Alfa
Systems 6 and fully transitioning to a SaaS
based model. We achieved record customer
wins this year. This success led to increased
recruitment in EMEA and the US, particularly
aswe cemented our position as the leading
software provider for the US Auto market.
Thedevelopment of our new Originations
functionality as part of Alfa Systems 6 has
opened new opportunities in this sector.
We have continued to exercise disciplined
capital management this year, delivering three
dividends to shareholders. This reflects the
strength of our financial position and our
commitment to providing consistent returns
aswe invest in initiatives to drive sustainable,
long term growth.
On the sustainability front, we initiated
engagement with key suppliers to reduce
supply chain emissions, a critical step toward
meeting our SBTi targets. Our commitment to
corporate responsibility was further reinforced
by joining the UN Global Compact.
We are encouraged by recent changes to the
regulatory landscape, including updates to the
UK Corporate Governance Code and the UK
Listing Rules. These changes underscore the
importance of transparency, accountability and
robust governance standards which are in line
with Alfa’s values.
Looking ahead, our strong Q4 performance has
positioned us for continued success in 2025,
with record levels of Total Contract Value set to
drive further growth.
Finally, on behalf of the Board, I would like to
thank all Alfa employees for another excellent
year and a strong set of results.
Andrew Page
Chairman
52
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Financial statements
Strategic report Corporate governance
Chairman’s introduction
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
The UK Corporate Governance
Code 2018: Our compliance
This corporate governance statement, including
the Nomination Committee, Audit and Risk
Committee and Remuneration Committee
Reports, explains how we have applied the
principles and complied with the provisions
ofthe 2018 UK Corporate Governance Code
(the ‘Code’) during the year. Except for the
matters which are explained opposite (in line
with the ‘comply or explain’ concept), the
Company complied fully with the Principles and
provisions of the Code throughout the financial
year in respect of which this statement is
prepared and continues to do so as at the date
of this statement. A copy of the 2018 Code,
issued by the Financial Reporting Council,
canbe found at www.frc.org.uk.
Exceptions to compliance
The Group has complied with the Code
provisions during the financial year with the
exception of:
Provision 9: The Chairman of the Board was
not independent on appointment as he
previously held the position of Chief Executive
Officer and is the controlling shareholder of the
Company. On listing, the Board unanimously
supported, and continues to support, the
appointment of the Chairman to retain his
skillsand experience, and ensure continuity
ofservice of Alfa’s customers and
commercialpartners.
Provision 20: An external agency was not used
to search for the additional NED. The Board
were looking for someone with specific Fintech
product knowledge, and the Board’s deep
knowledge of the industry and its existing
network of contacts was sufficient to provide
an outstanding candidate.
Provision 21: The Board decided to defer the
external Board Evaluation to 2025, given the
appointment of a new Non-Executive Director,
Reena Raichura, in June 2024. This would allow
Reena sufficient time to integrate into the role
and make the assessment more effective and
meaningful. The results of the externally
facilitated review will be included in the 2025
Annual Report.
2024 AGM update
At the May 2024 AGM, the resolution to re-elect
Chris Sullivan as a Director was passed
withlower support than expected from
independent shareholders. The Board
understands that the vote against Mr Sullivan
was due to his position as Chair of the
Nomination Committee and was the means
bywhich the independent shareholders
expressed their concern regarding the low
female representation on the Board.
The Board has taken steps to strengthen its
composition and align with the Company’s
strategic objectives. Following a thorough
review conducted by the Nomination
Committee, the skills and experience of
theBoard were assessed, leading to the
identification of a need for enhanced expertise
in product management and development.
Reena Raichura emerged as the standout
candidate during the recruitment process.
Further information on the recruitment and
induction process of Reena can be found on
pages 63, 68, 72 and 75.
Reena’s appointment also addresses a key
diversity gap, aligning the Board with the
principles of the Parker Review and FCA’s
Listing Rules on ethnicity. While the Company
acknowledges it is not yet fully compliant with
the gender targets set out by the FCA’s Listing
Rules and the FTSE Women Leaders targets,
progress has been made and the Board
remains committed to advancing diversity
initiatives in line with best practices.
This new appointment reflects Alfa’s
commitment to continuous improvement and
effective governance, ensuring that the Board
remains well equipped to guide the Company’s
growth and long-term success.
1. Board leadership and Company purpose
Board leadership and
Company purpose 58 to 60
Risk management 34 to 45
Section 172 statement 62 to 65
Stakeholder engagement 46 to 48
2. Division of responsibilities
Board of Directors 54 to 55
Our governance framework 57
Division of responsibilities 66 to 67
3. Composition, succession and evaluation
Board and Committee composition 68
Diversity, equity and inclusion 70
Succession planning 73
Board evaluation and performance 69
4. Audit, risk and internal control
Internal audit 80 to 81
External audit 81
Internal control and risk management 80
Review of financial statements 110
5. Remuneration
Remuneration Committee report 83 to 99
2024 Directors’ Remuneration
Policy – a summary 100 to 103
Alignment of
Remuneration Policy 104
53
Additional information
Financial statements
Strategic report Corporate governance
Code compliance
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Committee membership
Audit and Risk Nomination Remuneration Committee chair
A N R
Other appointments
Director of CHP Software and Consulting
HoldingsLimited and CHP Holdings Group Limited
Other appointments
Director of CHP Software and Consulting
HoldingsLimited, CHP Holdings Group Limited,
Professors Without Borders and The Leasing Industry
Philanthropic and Research Foundation Limited
Other appointments
None
Other appointments
None
Andrew Page
Executive Chairman
Appointed: May 2017
Andrew Denton
Chief Executive Officer
Appointed: April 2017
Duncan Magrath
Chief Financial Officer
Appointed: April 2020
Matthew White
Chief Operating Officer
Appointed: October 2019
Skills and experience
Andrew is one of the founding Directors of Alfa.
Andrew became the Chief Executive Officer in
2010 and the Executive Chairman in September
2016. Andrew provides commercial oversight and,
with the Board, sets the strategic direction and
goals of the Company.
Andrew has considerable senior management
experience and a deep understanding of the
autoand equipment finance industry.
Skills and experience
Andrew Denton has been CEO of Alfa since
September 2016, having held roles as Sales &
Marketing Director and Chief Operating Officer
since he joined the Company in 1995.
Andrew is Director and joint founder of the
Leasing Foundation, supporting the leasing and
auto and equipment finance industry through
charitable activities, research and development.
Andrew is an advisor to The Women’s Association,
boosting gender equality in the corporate world,
and he is a proud member of the Board of
Trustees for Professors Without Borders, bringing
top-level educators and global experts to the
doorsteps of students worldwide.
Andrew is a computer scientist by training, and
has considerable senior management experience
and significant experience in the auto and
equipment finance industry.
Skills and experience
Duncan started his career at PriceWaterhouse,
and qualified as a Chartered Accountant in 1989.
He joined Ocean Group in 1992, and spent
13years in the UK and USA in various finance
rolesasthe group transformed into Exel Logistics.
Hejoined Balfour Beatty, the infrastructure
company, in 2006 and was Group CFO from 2008
to 2015. In 2016 he joined Rubix, an Industrial
Parts Distributor, as Group CFO and was in that
role through to 2019.
Duncan has extensive experience in senior
financial positions both in the UK and
internationally, including a deep understanding
ofinvestor relations and financial strategy.
Duncan is a Fellow of the Institute of Chartered
Accountants in England & Wales.
Skills and experience
Matthew joined Alfa as a graduate in 1999,
starting in a software development role. In his
25-year career delivering software for the auto
and equipment finance industry, he has direct
experience of everything involved in systems
implementation, from configuration and testing
support to project management for a number of
UK and European projects. From 2010 to 2016,
Matthew’s role grew to include responsibility for
most of the operations of the Company, before he
led Alfa’s IPO in 2017. As Chief Operating Officer,
arole which he assumed in February 2019,
Matthew is accountable for the global operations
of the business, including Alfa’s people function,
technology platform and project delivery.
Matthew is also responsible for the
documentation and communication of Alfa’s
strategy. Matthew has considerable senior
management experience in software company
operations, software development and all aspects
of systems implementation and delivery.
54
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Financial statements
Strategic report Corporate governance
N
Board of Directors
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Committee membership
Other appointments
Director of Elucid Partners Limited
andANDigitalLimited
Other appointments
Senior Independent Non-Executive
Director ofiomart Group PLC
Other appointments
CPO, Keyloop Limited
Other appointments
Founder and Director, Finergise
Other appointments
Chairman of the Westminster Abbey
Investment Committee, Non-Executive
Director of Cannaray Limited and
DVCPLimited
Steve Breach
Independent Non‑Executive
Director
Appointed: August 2019
Adrian Chamberlain
Independent Non‑Executive
Director
Appointed: April 2020
Charlotte de Metz
Independent Non‑Executive
Director
Appointed: April 2020
Chris Sullivan
Senior Independent
Non‑Executive Director
Appointed: July 2019
Reena Raichura
Independent Non‑Executive
Director
Appointed: June 2024
Skills and experience
Steve is a member of the Institute of
Chartered Accountants in England
andWales, having qualified with
EYin1993 where he focused on
providingcorporate finance advice to
technology businesses in the UK and
internationally. Steve has 17 years’
experience as Chief Financial Officer
ofa number of businesses. Between
2010 and 2016, Steve was CFO of Tribal
Group PLC, a leading international
provider of student management
software to the education market.
Steve has subsequently pursued
aportfolio career, acting as advisor to
anumber of privately owned companies.
Steve has held a number of CFO roles
and has extensive experience in
corporate finance.
Skills and experience
Adrian is the Senior Independent
Director of iomart Group PLC. From
2017 to 2023, Adrian was Senior
Independent Non-Executive Director
ofCambridge University Health Trust.
He previously held senior executive
positions in a number of private and
public tech and telecommunications
companies including Chief Executive
Officer of Messagelabs and Achilles Ltd,
a member of the Board of Cable &
Wireless and Bovis Lend Lease, and
amember of the Operations Board
atSymantec. He was the Executive
Chairman of eConsult Ltd, a leading
cloud-based medical triage company.
Adrian has extensive experience
internationally in both the private and
public sectors, particularly in strategy
formulation and execution, technology
and Software-as-a-Service. He holds an
MA in History from Cambridge and an
MBA from the London Business School.
Skills and experience
Charlotte is the CPO at Keyloop which
focuses on software for the automotive
industry and which she joined in 2021.
She previously served as CPO at
Synamedia where she led a large-scale
global transformation and was
Executive Vice President at Finastra,
aglobal fintech where she was
responsible for executive talent, ESG,
culture and values, and DEI. Prior to
2012 Charlotte spent over 11 years at
Ventyx. During her tenure at Ventyx
she held various HR roles, latterly as
Human Resource Manager for Rest
ofWorld.
Charlotte has a strong track record
indelivering innovative employee
development, engagement, and
retention practices. She also has
extensive experience in managing
high-impact, enterprise-wide
transformations in challenging,
fast-paced environments.
Skills and experience
Chris served as CEO of the Corporate &
Investment Bank at Santander UK and
has held various CEO roles at The Royal
Bank of Scotland and NatWest over a
40-year career. He spent 11 years on
the Group Executive Committee, and
led key divisions such as Corporate
Banking, Retail Banking, Direct Line,
and Retail Direct, and was appointed
Deputy Group CEO in March 2014. With
nearly 30 years at the Lombard Group,
including as CEO, Chrisbrings
significant expertise in theauto and
equipment finance industry.
Additionally, he served as theSenior
Independent Director (SID) for DWF
Group PLC until its delisting in
October2023.
Chris has extensive experience of
corporate, investment and retail
banking and asset financing together
with general management and listed
company experience.
Skills and experience
Reena has over 20 years’ international
experience in financial services
technology and product management.
She is renowned for her work at
theintersection of business and
technology and has a proven track
record of driving business value
through technological innovation
andcollaboration.
Reena is the founder of Finergise,
aboutique fintech advisory and
consulting firm, and serves as strategic
advisor to fintech companies of all
sizes. Prior to this, Reena was Director,
Head of Product Solutions, at fintech
startup interop.io and has held senior
product and technology roles at leading
financial services companies, including
J.P. Morgan and Fidessa. She brings
deep expertise across the entire
product development lifecycle, and
hasextensive knowledge of fintech
andcapital markets.
Audit and Risk Nomination Remuneration Committee chair
A N R
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Board of Directors continued
R R R RNN N NA A AAA R N
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Andrew Denton
Chief Executive Officer
Joined Alfa August 1995
Duncan Magrath
Chief Financial Officer
Joined Alfa March 2020
Matthew White
Chief Operating Officer
Joined Alfa June 1999
Richard Dewire
Chief Revenue Officer
Joined Alfa January 2001
Vicky Edwards
Chief People Officer
Joined Alfa March 2020
Andrew Flegg
Chief Technology Officer
Joined Alfa February 2005
James Paul
Chief Delivery Officer
Joined Alfa September 1999
Relevant experience/previous roles
Richard has over 20 years in the auto and
equipment finance industry and an in-depth
knowledge of Alfa Systems through many years
ofimplementation, with extensive knowledge
ofAlfa’s sales and commercial process. He was
previously Director of Strategy and Investment.
Relevant experience/previous roles
Vicky joined Alfa in March 2020, bringing 26 years
of experience in consultancy businesses.
Acommercially focused HR leader, Vicky has
heldleadership roles across HR, commercial and
operations functions, as well as C-suite level
positions in the professional services, technology
and energy sectors.
Relevant experience/previous roles
Andrew brings over 35 years of programming
experience, over 25 years in commercial software
development and over 15 years in the auto and
equipment finance industry. As CTO, he’s
responsible for all our technology, from internal IT
systems, to information security, our Alfa Systems
platform and solution architecture.
Relevant experience/previous roles
James is accountable for all implementations
across the globe and has responsibility for
support, resourcing and partnering. James
hasover 25 years’ experience implementing in
auto and equipment finance for organisations
ofallsizes.
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Company Leadership Team
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Audit and Risk Committee
Investment Committee
Disclosure and
Governance Committee
Deal Committee ESG Steering Group
Remuneration CommitteeNomination Committee
Governance Committees
Our corporate governance
framework clearly defines
responsibilities and ensures
that the Group has the right
systems and controls to enable
the Board and its Committees
to oversee the business
effectively, providing challenge
where necessary.
The Board is collectively responsible for the long-term success of the Company. The business of the Company is managed by the Board who
may exercise all of the powers of the Company. The Board has a formal Schedule of Matters Reserved for the Board which is available on the
Company website. Although the Board retains overall responsibility, it delegates certain matters to the Board Committees, and the detailed
implementation of matters approved by the Board and the day-to-day operational aspects of the business to the Company Leadership
Team(CLT).
The CLT is responsible for the day-to-day running of the business, carrying out and overseeing operational management, and implementing
the strategies that the Board has set.
These governance committees are chaired by a member of the CLT and report to the CLT, and the Board or Board Committees as appropriate.
Provides independent assessment and
oversight of financial reporting processes.
Itoversees, on behalf of the Board, the risk
management strategy, risk appetite and the
effectiveness of internal control processes. It
also oversees the effectiveness of the internal
and external audit functions.
The Investment Committee
ensures that Strategic Investment
initiatives align with Alfa’s
businessstrategy.
The Disclosure and Governance
Committee maintains an overview
of the corporate structure and
oversees the disclosure of
information by the Group to meet
its obligations as a listed company.
The Deal Committee determines
standard guidelines for an
acceptable deal in terms of
financial position and key
contractual terms.
The ESG Steering Group supports
the CLT in implementing
Environmental, Social and
Governance (ESG) strategy and
managing relevant matters relating
to our communities covering
environmental and social matters.
Reviews the size, composition, tenure and skills
ofthe Board. It also leads the process for new
appointments, monitors Board and senior
management succession planning, reviews the
talent pipeline and talent management, and
considers independence, diversity, equity and
inclusion, and governance matters.
Determines the remuneration, bonuses,
long-term incentive arrangements, contract
terms and other benefits in respect of the
Executive Directors, the Chairman, the
Company Secretary and senior management.
Oversees the remuneration and workforce
policies and takes these into account when
setting the policy for Directors’ remuneration.
Board of Directors
Company Leadership Team
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Our governance framework
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
The role of the Board
The Board is responsible for defining the
Company’s purpose, values, and strategy to
drive long-term success, create shareholder
value, and make a positive impact on society.
Itacknowledges its accountability to
stakeholders and the importance of fostering
astrong culture and ethical behaviour across
the Group.
Our governance framework, outlined on page
57, establishes clear lines of accountability.
Toensure effective oversight, the Board
delegates certain responsibilities to its
committees. While the Executive Directors
manage day-to-day operations, the Board
retains authority over specific decisions.
Board leadership and purpose
The Board is committed to guiding the
Company’s strategic vision and ensuring that
all decisions align with Alfa’s core purpose.
The Board’s leadership recognises the
importance of a culture which promotes
inclusion and acceptance of differing
approaches to facilitate the successful delivery
of strategic projects and initiatives. We have
aculture that is focused on providing a superior
technology experience for our clients which is
aligned to our purpose, values and strategy.
Tosupport this it is important that our people
are engaged with this goal and have the
knowledge to ensure they are motivated to
provide a good client experience.
Our Stakeholder engagement, Section 172
statement and ESG sections provide
information on some of the initiatives
undertaken throughout the year to engage
with employees. The Group has established
processes in relation to the reporting and
processing of employee-related issues. Within
a structure ultimately overseen by the Board,
any employee can raise a matter of concern
atany time through day-to-day management
reports or whistleblower channels as
appropriate. The Board recognises the
importance of understanding employee
engagement and the prevailing Group culture
to enable alignment with delivery on strategy
in a way that ensures a commitment to the
Group’s values.
How the Board operates
During the year, the Board considers
acomprehensive programme of regular
matterscovering operational and financial
performance reporting, strategic reviews
andupdates, and various governance reports
and approvals.
Committees
The Audit and Remuneration Committees
arecomprised solely of independent
Non-Executive Directors. The Nomination
Committee is comprised of Non-Executive
Directors, the Executive Chairman and is
chaired by the Senior Independent Director.
Details of the composition and activities of
theCommittees can be found in the Audit
Committee Report on pages 76 to 82; the
Nomination Committee Report on pages 71
to75; and the Directors’ Remuneration Report
on pages 83 to 99.
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Board leadership and Company purpose
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Corporate governance framework
The Board and its Committees effectively
oversee the business, maintain the highest
standards of corporate governance and
allowDirectors to provide challenge where
necessary. Having an effective corporate
governance framework defines responsibilities,
helps the Board to deliver the Group’s strategy,
and is vital to its decision-making. It supports
long-term sustainable growth while operating
within a framework of effective controls.
Having the right systems and controls in
placeensures the delivery of Alfa’s strategic
objectives and ensures that the business is
runwell.
The Board has overall responsibility for
ensuring adequate resources are available
forAlfa to deliver on its strategic priorities.
TheBoard has established a risk management
framework to manage and report the risks
weface as a business, which are reviewed
onatleast an annual basis. The Board also
undertakes a robust assessment of the
Company’s emerging and principal risks.
Efficient internal reporting, effective internal
controls and oversight of current and emerging
risks are embedded into our business
processes, which align to our strategic
priorities, purpose and values. The Board,
withthe support of its Committees, places
great importance on ensuring we achieve a
high level of governance across the Group.
Board meetings
Board meetings are conducted in an
environment that fosters open conversation,
constructive challenge and debate. The Board
is committed to maintaining a comprehensive
schedule of meetings and a forward agenda to
ensure its time is used most effectively and
efficiently, and is supported by the Company
Secretary to facilitate this.
The Board held five scheduled meetings in
2024, which included presentations by various
members of senior management to report on
individual business areas. In addition to the
scheduled meetings, the Board held three
strategy meetings, and a number of other
meetings were held informally to discuss
business matters, which are not reflected in
this table. During the year, the Board and its
Committees conducted each meeting in
person, with Directors attending remotely if
necessary, enabling the Board to continue to
function and maintain the integrity of our
governance structure. Materials for meetings
are circulated electronically in advance, to give
Directors an appropriate amount of time to
consider the Board matters fully before the
meeting takes place. During the year under
review the Non-Executive Directors met on
several occasions without the Executive
Directors being present. The Senior
Independent Director reviewed the
performance of the Chair and Non-Executive
Directors hadthe opportunity to meet without
the Chairpresent.
Board and Committee meetings andattendance
The table below records the number ofmeetings held by the Board and each Committee during
2024 and the number of meetings attended by each member. The Board is responsible for
providing overall direction for management, debating strategic priorities and setting Alfa’s culture
and values. Maintaining good governance is essential to support the delivery of Alfa’s strategic
objectives, and to ensure that the business is run well for the benefit of all stakeholders and for
sustainable long-term value. The Board receives an update on key elements of the People
strategy which provides insight into a variety of areas including culture, diversity, inclusion, talent
management, future capability, succession planning and colleague engagement. The Board
continues to monitor the governance framework, sothat it remains appropriate to the business.
The governance framework embeds our values into the policies and processes of Alfa and
therefore helps to strengthen the corporate culture.
Board
1
Audit and Risk
Committee
Nomination
Committee
Remuneration
Committee
Andrew Page 5/5 2/2
Andrew Denton 5/5
Duncan Magrath 5/5
Matthew White 5/5
Steve Breach 5/5 4/4 2/2 3/3
Adrian Chamberlain 5/5 4/4 2/2 3/3
Charlotte de Metz
2
5/5 3/4 2/2 2/3
Reena Raichura
3
3/3 2/2 - 2/2
Chris Sullivan 5/5 4/4 2/2 3/3
1. In addition to the five scheduled Board meetings there were three Board Strategy meetings.
2. Charlotte de Metz was unavailable to attend one meeting due to an unavoidable commitment in connection with her
Executive role.
3. Reena Raichura was appointed to the Board on 3 June 2024.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Establishing our culture, values
andstrategy
The Board is responsible for the long-term
success of the Company through setting,
overseeing and driving the Company’s culture,
values and strategy. By discharging the above
responsibilities, all our stakeholder groups are
impacted positively, whether it be by providing
an environment where our employees thrive,
or by requiring the highest standards of
services and partnership to our customers
andsuppliers, or by managing the business
effectively to generate returns to investors,
and the communities of which we are part of.
Strategy
The Board provides support in implementing
strategic priorities as well as oversight and
constructive challenges in running the
business. Through reporting, including the
useof both financial and non-financial metrics,
the Board is able to evaluate and guide the
progress and performance of the Company.
The Board continues to monitor the strategic
direction of the Company and the key
investments we need to make to remain in
aleading position in an ever-changing market.
Itensures we have the resources and the
rightpeople in the right place operationally
toensure we remain relevant to the markets
inwhich we operate. This brings focus to
strategic objectives and translates into better
decisions, driving competitive advantage,
stronger performance and a sustainable
business model.
Board strategy sessions
There were three Strategy sessions held in
2024, which were conducted with the Board
and senior management to engage in deep,
strategic thinking, review progress, identify
opportunities and challenges, and set the
direction for Alfa’s long-term future. In 2024,
the Strategy sessions took place in January, May
and October. Presentations covered topics such
as product development, customer insights and
the competitive landscape. The Board engaged
in discussions on strategic proposals and
evaluated progress in executing the strategy.
Promoting a positive culture
The Board recognises the importance of
astrong culture and the role it plays in
delivering the Company’s long-term success.
Alfa employees want to work for a company
that values them and provides them with the
opportunity to be themselves and to thrive.
The Board and CLT strive to create a positive
culture at Alfa, providing employees with the
opportunity to grow, experiment and innovate
in an inclusive environment.
Our culture and values define the way Alfa
does business. To create the right culture, it is
important that employees live and breathe
Alfa’s values, and this starts with our leaders.
The Board sets the tone from the top to
demonstrate and promote these values, which
are a critical element in achieving our purpose
of knocking down barriers so everyone can
thrive. The Board seeks to create space and
opportunities to engage with colleagues across
the Group as regularly as possible, to help it
understand what matters most to them.
The Board uses several tools to monitor the
culture, through surveys, Town Hall sessions,
and formal and informal engagement activities.
Inaddition, to monitor whether our culture
isand remains aligned with our values, the
Company seeks customer feedback to
understand what they experienced during the
sales process and through the various stages
of software implementations and provision
ofservices.
It is our collective responsibility to build culture
into everything we do and ensure that all
colleagues feel free to bring their authentic
selfto work and realise their full potential.
Values, purpose and identity
The Board fully supports the Alfa strategic
hierarchy, which sets out Alfa’s values, purpose
and identity. The Alfa values are at the core of
everything we do and underpin who we are
and why we behave as we do. Alfa’s purpose
and identity are the reasons why the Company
exists and cover our three differentiators:
People, Product, and Delivery. Alfa’s purpose
isto deliver our leading-edge technology
withsmart, diverse people, making our
customers future ready. We are a software
anddelivery company.
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Board leadership and Company purpose continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Strategy and operations
Finance Governance
Leadership, people and culture
Key stakeholder groups and Strategic Priorities
Customers
Employees
Communities and
environment
Suppliers Investors
Strengthen
Sell
Scale
Simplify
1
2
3 4
Board activities and key discussions in2024
The table below sets out the key areas of Board focus during the year and how these align with
the Group’s strategy. It also sets out which of Alfa’s key stakeholders have been considered and
are relevant in the Board’s discussions.
Activities
• Received operational updates from the CEO and COO at each Board meeting
highlighting business performance, key stakeholder and innovation updates.
• Monitored the performance of the Company against agreed strategic objectives,
including key financial targets.
• Reviewed individual objectives at each Board meeting.
• Received the three-year strategic plan, with updates on Group strategic execution.
• Received deep dive presentations on specific areas of the business and their
challenges and opportunities.
• Applied the Board’s strategic understanding of principal risks to key challenges
andopportunities.
Activities
• Conducted business planning and approved the annual budget.
• Reviewed financial key performance indicators (KPIs).
• Approved full-year results, half-year results, trading updates and the Annual Report
and Accounts.
• Received reports from the CFO on the Company’s financial performance.
• Approved two special dividends and recommended a final dividend to shareholders
for approval.
• Reviewed the key risks to Alfa and the controls in place for mitigation.
• Considered and monitored the Group’s risk appetite and principal risks
and uncertainties.
• Reviewed internal controls.
• Approved the viability and going concern statements.
• Monitored the ESG reporting framework.
Activities
• Monitored and reviewed the Company’s approach to corporate governance, its key
practices and its ongoing compliance with the 2018 Code.
• Reviewed the results from the internal Board and Committee effectiveness evaluation
and confirmed actions.
• Reviewed climate change risks and TCFD disclosures.
• Reviewed the global insurance programme and D&O liability insurance.
• Approved the Company’s Section 172 statement.
• Reviewed and approved matters reserved for the Board and its Committees’ Terms
ofReference.
• Received a presentation from the corporate broker and considered feedback from
shareholder engagement.
• Reviewed and approved the modern slavery statement.
Activities
• Received updates on employee views and engagement levels.
• Continued to monitor senior executive talent management and development plans to
provide succession for all key positions.
• Received updates from the Chair of the Remuneration Committee on its activities,
recommendations regarding remuneration strategy and decisions regarding the
Executive Directors’ and senior management’s pay.
• Reviewed people and talent reports, including updates on talent development
programmes and diversity, equity and inclusion (DEI) programmes.
• Received presentations from each member of the CLT.
• Received recommendations from the Nomination Committee on the re-election of
Directors and the structure, size and composition of the Board.
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1
1
2
2
13
3 1
24
4 4
3
Board activities
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Section 172 statement
In accordance with the Companies Act 2006
(the Act), this statement sets out how the
Directors have had regard to the matters set
out in Section 172(1) of the Act when
performing their duty to promote the success
of the Company for the benefit of its
shareholders as a whole, and to have regard to:
a. the likely consequences of any decision in
the long term;
b. the interests of employees;
c. the need to foster business relationships
with suppliers, customers and others;
d. the impact of operations on the community
and the environment;
e. the desirability of maintaining a reputation
for high standards of business conduct; and
f. the need to act fairly as between
shareholders.
The Board is responsible for leading
stakeholder engagement and ensuring that we
fulfil our obligations. Our key stakeholders are
those who influence or are affected by our
day-to-day activities. These stakeholder
groupshave varying needs and expectations;
our aim at Alfa is to engage effectively with all
stakeholders, to develop and maintain positive
and productive relations.
Throughout the year, the Board and individual
Directors engage directly and indirectly with
arange of stakeholders to ensure they have
adeep understanding of the impact of the
Group’s operations, as well as their interests
and views.
Other stakeholder engagement
The Board and each Committee chair actively
encourage and engage with key stakeholders
and consider this to be paramount to the
long-term success and performance of the
business. During 2024, there were no
significant matters to discuss with
shareholders in relation to the Audit and Risk,
Nomination and Remuneration Committees.
How the Board fulfils its
Section172duties
Our Directors
Alfa’s Board of Directors has always made
decisions for the long term, and our aim is to
uphold the highest standards of conduct,
collectively and individually.
The Board considers the needs of our
stakeholders and the long-term consequences
of any decision. The differing interests of
stakeholders are considered in the business
decisions we make across Alfa, at all levels, and
are reinforced by the Board setting the right
tone from the top.
The Board, together with the Directors,
considers any current risks or emerging risks
with regard to each stakeholder group as part
of the overall principal risk assessment, which
is contained on pages 34 to 45.
Engagement with our shareholders and wider
stakeholder groups plays a vital role in Alfa’s
business. Alfa’s key stakeholders and why they
are important to us are set out opposite:
Employees
Our employees are central to everything we do. Listening to
our employees, and being flexible, supportive and inclusive,
are our routes to growing and retaining Alfa’s talent pool,
enabling us to deliver against our strategic priorities and
develop our people.
Investors
The Board places great importance on having positive
relationships with all our investors and seeks to ensure
there is an appropriate and constructive dialogue with all
our investors.
Customers
Our customers are central to our business and we aimto
deliver our leading-edge technology to them, making our
customers future-ready.
Communities and
environment
We have a responsibility to add value to the communities
inwhich we operate. We have employee-led community
groups that are safe spaces for colleagues to promote
issues, support each other and contribute to
organisationalchange.
Suppliers and
Partners
Building trusted partnerships and developing relationships
with suppliers through ongoing dialogue helps us to better
understand the needs of our partners and to develop and
improve our offering.
Information to the Board
The Board receives information on how we engage with our stakeholders, which it reviews
regularly throughout the year, to ensure that the long-term impact on any of these groups
isconsidered.
Monitoring
Where the Board does not engage directly with our stakeholders, it is kept updated so that
Directors maintain an effective understanding of what matters to them and can draw on these
perspectives in Board decision-making and strategy development.
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Engaging with our stakeholders
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Decisions by the Board during 2024
The decisions outlined here demonstrate how
the Board has assessed different stakeholder
interests when considering strategic actions.
For each matter that comes before the
Board,the Board considers the likely
consequences ofany decision in the long term,
identifies stakeholders that may be affected,
and carefully considers their interests and
thepotential impact of the decision-making
process.
Capital allocation: Dividend
distribution
During the year, the Board has actively shaped
a disciplined capital allocation framework,
ensuring decisions reflect a balance between
delivering returns to shareholders and
supporting Alfa’s long-term success.
Thisprocess has been underpinned by
acommitment to maintaining a strong balance
sheet and healthy liquidity position.
In making these decisions, the Board
carefullyconsidered the perspectives of
keystakeholders, including shareholders,
customers and employees. The long-term
strategic needs of the business, including
continuous improvement and innovation
tobenefit our customers, were integral to
thisprocess.
The Board approved two special dividends of
2.0 pence and 4.2 pence per share in May and
November 2024. Additionally, the Board
recommended a final dividend of 1.3 pence per
share, which received shareholder approval at
the 2024 Annual General Meeting (AGM). As
with all capital decisions, the Board recognises
the importance of retaining sufficient capital to
drive future growth while meeting shareholder
expectations.
Contract renewal: AWS
The Board evaluated the proposal to renew
Alfa’s contract with AWS for an additional three
years, ensuring the decision aligned with the
interests of key stakeholders and the
Company’s broader responsibilities.
Environmental and sustainability factors
werecentral to the Board’s deliberations.
TheDirectors noted AWS’s commitment to
theAmazon Climate Pledge, including its goal
of achieving net-zero emissions by 2040 and
itsaccelerated achievement of using 100%
renewable energy by 2023, seven years
aheadof schedule. AWS’s pooling of cloud
computing resources was also recognised
asanefficient and sustainable practice,
contributing to reduced environmental
impactacross industries.
By aligning with a partner that shares Alfa’s
commitment to sustainability and innovation,
the Board ensured that renewing the AWS
contract supports Alfa’s strategic objectives
while addressing the needs and expectations
of investors, customers and broader
environmental considerations. This decision
reflects the Board’s dedication to balancing
operational needs with long-term
environmental and stakeholder considerations.
Appointment of Reena Raichura
A key responsibility of the Board and
Nomination Committee was in relation to the
appointment of a new Non-Executive Director.
The Chair, Senior Independent Director and
CEO led the process of appointing a new
Non-Executive Director. The Board considered
the skills, knowledge and experience required
at the Board level to support the delivery of the
Company’s strategy and returns for
shareholders. A standout candidate, Reena
Raichura, emerged as the ideal candidate
during the recruitment process.
The Board approved Reena’s appointment
given her knowledge and broad experience,
particularly in relation to product management
and development, which is an area identified
as requiring enhancement within the Board
skills matrix review.
Alfa’s Pulse Survey collects feedback from
all areas of the organisation, which helps
to fostera culture of accountability and
honesty. Pulse Surveys give the Board
greater insight into colleague experiences
across the Group and provide direct
feedback on areas that can be improved.
Engagement (%)
Q1
24
Q1
23
Q2
24
Q2
23
Q3
24
Q3
23
Q4
24
Q4
23
81
78
81
79
83
82 82 82
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Stakeholder engagement
In performing their duties during the year, the Board and individual Directors engage directly and indirectly with a range of stakeholders to ensure they have a deep understanding of the impact of the
Group’s operations, as well as their interests and views. Examples of how the Directors have oversight of stakeholder matters and have regard for these matters when making decisions are included
throughout the Strategic report and Corporate governance sections of this Report. This engagement, both directly and through reporting by executive management, to whom the day-to-day
operations of the business are delegated, seeks to ensure the Board understands the key issues to enable the Directors to comply with their legal duty under Section 172(1).
The Board monitors and assesses engagement with all stakeholders, particularly on employee engagement. Employee Pulse surveys provide a regular understanding of wider views, and an ‘open
door’ approach to feedback and communication also allows for frequent two-way conversation and insight. Throughout 2024, our regular Town Hall updates and Company Meetings kept colleagues
informed on all the news from around the business and supported engagement across the organisation. Each region gathered for their annual two-day Company Conferences to incorporate valuable
time with colleagues and networking opportunities to keep us all connected.
Engagement with the workforce
Given the Board’s visibility of the engagement channels and efforts, as well as its accessibility to the workforce through the initiatives and events as mentioned, it is confident at this time that
appropriate, effective measures are in place as an alternative to Provision 5 of the 2018 UK Corporate Governance Code. We believe our strong culture is a unique strength and see the benefits in
employee engagement, retention and productivity. This reflects the Alfa ethos that we all strive towards the same goal.
Employee engagement
Why we engage How the Board engages
Employees
Engagement with employees is paramount to maintaining Alfa’s
strong culture. Employee engagement is fundamental to our
success; employees who feel valued are more likely to contribute
innovative ideas and solutions. We continue to cultivate a culture of
innovation and empowerment, and we are proud that our people
are highly engaged and supportive of each other and of the
organisation’s aims.
• The Board reviewed the Gender pay gap report and initiatives identified by the action plan.
• Members of the Board attended the EMEA Company Meeting in March and Company Conference in
September held in Amsterdam, which provided interaction between the Board with a wide range of
employees across functions, leading to a deeper understanding of the daily objectives, challenges
andopportunities.
• The Board reviewed the results of the Pulse surveys during the year, which allows for greater insight into
colleague sentiment across the Group and provides direct feedback on areas that can be improved.
• The Board attended an event which hosted a number of new hires and graduates.
Customer engagement
Why we engage How the Board engages
Customers
We engage to understand our customers better so we can provide
a better product to them. Our customers have direct channels to
engage with all levels of the organisation. Byactively listening to
customer feedback and understanding their needs, Alfa can better
tailor our products to meet individual customer requirements. We
continue to build on our long-term relationships with our
customers, which enables Alfa to anticipate and adapt to changing
market demands effectively.
• Regular updates from the CEO and COO are provided to the Board on the operational priorities in place to
deliver a high-quality customer experience.
• The Board hears regular updates on key customer measures across the Group and key themes from
customer feedback.
• Regular cyber security updates are provided to the Board and this year the Board’s understanding of Alfa’s
work to reduce cyber risks across the business was enhanced by an AI presentation in June 2024.
• During the year, the Board received an overview of Alfa Systems 6 to help them understand how Alfa
Systems’ development was evolving to meet customer needs.
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Shareholder engagement
Why we engage How the Board engages
Shareholders
Engaging with investors ensures that their interests are aligned
with the Company’s strategic direction and purpose. Engagement
helps our investors understand Alfa’s strategy, which underpins
our future growth plans and how the business’s financial and
operating performance enhances long-term shareholder value
andsustains growth. The Board is accountable to shareholders for
ensuring the Group is appropriately managed and achieves its
objectives in a way that is supported by the right culture and
behaviours. The Board spends time understanding the views of its
key shareholders when discussing matters at Board meetings, and
these views form an integral part of decision making.
• The CEO and CFO regularly meet with existing and potential institutional investors and analysts to
understand their views and policies. These meetings cover various topics, including our long-term
strategy, operational and financial performance, and increasingly broader societal issues. The Board
receives regular updates to ensure it considers the views of shareholders.
• The Company paid two special dividends and one final dividend, returning approximately £22m
toshareholders.
• Held over 40 investor meetings to discuss strategic opportunities, financial performance and future
growth initiatives.
• At each Board meeting, the Board receives an Investor Relations update.
• The Company’s brokers regularly attend Board meetings, and provide reports to those meetings, to keep
the Board apprised of shareholder and wider market sentiment regarding the Company.
• All Board Directors are present at the Alfa AGM, which provides a key opportunity for the Board to engage
with shareholders and for shareholders to vote on the resolutions put to them.
Partner and supplier engagement
Why we engage How the Board engages
Partners and
Suppliers
Engaging with our partners and suppliers is paramount for
developing our business relationships. Increasing our use of
partners is a key element of our longer-term strategy for increasing
the number of implementations we can deliver and providing us
with a more flexible implementation resource. Weare working
withpartners to help cultivate operational agility and engage with
suppliers to uphold ethical and environmental standards.
• The Board supports the continuing development of our partner training and learning programme, which
aims to deliver a comprehensive training schedule that includes Alfa Systems training, our delivery
methodology and simulation-based implementation workshops.
• The Board supports continuing to scale our existing partnerships and extending our partner ecosystem to
strengthen our coverage in core markets.
• The Board oversees the road to net-zero and is focused on regulatory, supplier and consumer pressures
initiating changes to reporting, financial products and compliance.
Communities and environment engagement
Why we engage How the Board engages
Communities
and
environment
Making a meaningful contribution to the wider society enables
usto create stronger communities and generate positive
environmental and social impacts. Engagement with organisations
such as non-governmental organisations and community
groupshelps us to address our impact on the wider society and
supports ways in which we can work together to make a valuable,
positive contribution.
• The Board reviewed climate-related risks and opportunities and were updated on related progress on
climate-related matters and regulation.
• The Board oversees the Company’s broader sustainability reporting within the Annual Report and through
the Audit and Risk Committee.
• The Board oversees the initiatives of the Alfa Communities and assesses their impact on Alfa’s culture.
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Setting the strategic direction of the Group
Overseeing
implementation
of the strategy by
ensuring that the
Group is suitably
resourced to
achieve its
strategic
aspirations
Providing
leadership within
a framework of
effective controls
which enables
riskto be
assessed
andmanaged
Ensuring that
thenecessary
financial and
human resources
are in place for
the Group to
meet its
objectives
Reviewing the
Group’s purpose
and culture
supported by
itsvalues
Division of responsibilities
Alfa is led and controlled by the Board, which
iscollectively responsible for the long-term
andsustainable success of the Group. The
structure and the roles of the Board and its
Committees ensure that control and oversight
give a balanced approach to risk and are
aligned with Alfa’s culture. This assists the
Board with carrying out its responsibilities and
is designed to ensure that focus is maintained
on strategy, monitoring the performance of the
Group, governance, risk and control issues.
The Board is collectively responsible for
thelong-term success of the Group and for
ensuring leadership within a framework
ofeffective controls.
The Board responsibilities
We have clear and documented roles and
separation of duties between the Chairman
and the CEO. The Alfa CEO, Andrew Denton, is
responsible for executing the Alfa strategy and
day-to-day operations, and leading the CLT.
Andrew Page, as Executive Chairman, provides
oversight and guidance to Andrew Denton on
the strategic direction, key commercial and
contracting decisions in addition to his
responsibilities for running an effective Board.
All Directors have access to the advice of the
Company Secretary and, in appropriate
circumstances, may obtain independent
professional advice at the Company’s expense.
In addition, a Directors’ and Officers’ liability
insurance policy is maintained for all Directors
and each Director has the benefit of a deed of
indemnity. The appointment and removal of
the Group Company Secretary is a matter for
the Board as a whole.
Matters reserved for the Board
The Board has adopted a formal Schedule of
Matters specifically reserved for its decision-
making and approval. The matters that the
Board considers suitable for delegation are
contained in the Terms of Reference of each
Board Committee. There are certain key
responsibilities that the Board does not
delegate and which are reserved for its
consideration. The full Schedule of Matters
Reserved for the Board is available under the
Corporate governance section on our website.
Workforce policies and practices
Our people bring a diverse range of
experience, expertise and perspectives that
contribute to the values and culture ofAlfa
and are essential for the delivery ofour
strategic objectives. A positive environment
where our people feel valued, motivated and
able to thrive is essential to Alfa’s continued
success. TheBoard recognises the value of,
and supports significant investment of time
and resources in our colleagues to allow Alfa
to attract and retain talent and develop the
skills of our employees. One central policy
increating this environment and culture is
Alfa’s Ethics and Code of Conduct Policy
(the‘Code of Conduct’) which clearly sets
outa zero-tolerance policy for dishonest and
corrupt behaviour among our employees and
seeks to educate team members on unlawful
and unethical conduct. Compliance with the
policy maintains Alfa’s reputation in the
marketplace as well as our relationship with
our colleagues, investors, customers and
other stakeholders. The Code of Conduct
provides clear guidance to employees in
respect of legal and ethical issues which they
may come across while conducting Alfa
business, and what Alfa expects in respect
ofour employees’ behaviour. It also provides
important information on working at Alfa to
help embed the behaviours and values
alongside more practical information to
enable our employees to work effectively and
efficiently. The Board is responsible for
overseeing the Company’s arrangements for
the workforce to be able to raise matters of
concern and seeks to foster an environment
where individuals can be confident about
speaking up about concerns without fear of
retaliation. The Board monitors this area
through reports on the number and types of
concerns raised through the whistleblowing
process and the outcomes of the concerns
raised. Whistleblowing and incident reporting
mechanisms are in place to allowissues to be
formally reported andinvestigated.
The Company Secretary, through the
Chairman, is responsible for advising the Board
on all governance matters and for ensuring
that Board procedures are followed, that
applicable rules and regulations are complied
with, and that due account is taken of relevant
codes of best practice. The Company Secretary
is also responsible for ensuring communication
flows between the Board and its Committees,
and between senior management and
Non-Executive Directors.
The key role of the Board:
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Division of responsibilities
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
There is a clear division of
responsibilities between the Board
and the business. The roles of the
Chairman, Chief Executive Officer,
Chief Financial Officer, Chief
Operating Officer, Senior
Independent Director and
independent Non-Executive
Directorsare set out in separate
rolestatements.
Role Principal responsibilities
Executive Chairman
Andrew Page
The Chairman is responsible for the effective leadership of the Board and maintaining a culture of openness and
transparency at Board meetings. The Chairman also promotes effective communication between Executive and
Non-Executive Directors and ensures all Directors effectively contribute to discussions and feel comfortable in
engaging in healthy debate and constructive challenge. The Chairman ensures all Directors receive accurate, timely
and clear information to assist them to make their decisions and identifies training and development needs
asrequired.
Chief Executive Officer
Andrew Denton
The Chief Executive Officer has day-to-day responsibility for the effective management of Alfa and for ensuring
that Board decisions are implemented. He plays a key role in defining and guiding the strategy, once agreed by
theBoard, whilst ensuring the successful delivery against the strategic plan and other key business objectives,
allocating decision-making and responsibilities accordingly. The CEO is also tasked with providing regular
operational updates to the Board on all matters of significance relating to the Group’s operations and for ensuring
effective communication with shareholders and other key stakeholders. The CEO identifies and executes new
business opportunities and assesses potential acquisitions and disposals. He manages the Group with reference to
its risk profile in the context of the Board’s risk appetite and is responsible for the oversight of the ESG initiatives.
Chief Financial Officer
Duncan Magrath
The Chief Financial Officer has overall responsibility for management of the financial risks of the Group. The CFO is
responsible for financial planning and record-keeping, as well as financial reporting to the Board and shareholders.
The CFO ensures effective financial compliance and control, while responding to regulatory developments,
including financial reporting, effective allocation of capital, management of liquid resources, investor relations
andcorporate responsibility. The CFO has responsibility for the ESG reporting.
Chief Operating Officer
Matthew White
The Chief Operating Officer is responsible for day-to-day operational activities. The COO plays a key role in
developing key business operational models, monitoring performance against KPIs and ensuring adequate
staffingrecruitment to deliver development and systems implementation. The COO is responsible for software
development, systems implementation delivery and the delivery of HR resourcing and planning.
Senior Independent
Director
Chris Sullivan
The Senior Independent Director provides a sounding board for the Chairman and acts as an intermediary for
theNon-Executive Directors. The Senior Independent Director is available to shareholders should they have any
concerns, where communication through normal channels has not been successful or where such channels are
inappropriate. The Senior Independent Director meets with the Non-Executive Directors at least annually when
leading the Non-Executive Directors’ appraisal of the Chairman’s performance.
Non-Executive Directors
Steve Breach
Adrian Chamberlain
Charlotte de Metz
Reena Raichura
The Non-Executive Directors bring insight and experience to the Board. They have a responsibility to constructively
challenge the strategies proposed by the Executive Directors; scrutinise the performance of management in
achieving agreed goals and objectives; and play leading roles in the functioning of the Board Committees, bringing
an independent view to the discussion.
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Board composition
The Board recognises that the diversity of its
Directors should reflect a range of views,
insights, perspectives and opinions, to facilitate
constructive discussion and enable enhanced
decision-making and effectiveness. The
composition of the Board is subject to ongoing
review and all Board appointments follow
aformal search and selection process. The
Board delegates to the Nomination Committee
the responsibility to maintain the appropriate
composition of the Board. The Nomination
Committee ensures diversity features strongly
in its work on succession planning. Reena
Raichura was appointed as an Independent
Non-Executive Director with effect from
4 June2024, following a selection process
thatestablished her suitability.
The Board established a DEI Policy during the
year which sets out its approach to DEI for the
Board and its Committees. The Board DEI
Policy ensures that appointments are made on
merit and set against objective criteria. The
Board is mindful of the targets as set out by the
UK Listing Rules, and aims to meet them as far
as possible. As at 31 December 2024 and the
date of this report, the Board meets the ethnic
diversity targets set by the Parker Review but
not the targets set by the FTSE Women Leaders
Review and the UK Listing Rules.
During the year, the Board reviewed the overall
balance of skills, experience, independence
and knowledge of the Board and Committee
members. We consider that the skills and
experience of our individual Directors,
particularly in the areas of financial services,
people and software, are fundamental to the
pursuit of our objectives. Further details of this
review, including actions taken, are set out in
the Nomination Committee Report on pages 71
to 75.
As required by provision 11 of the Code, at least
50% of the Board, excluding the Chairman, are
Independent Non-Executive Directors. The
Board currently comprises nine members: the
Executive Chairman, three Executive Directors
and five Independent Non-Executive Directors.
Details of the skills and expertise of each
member of the Board is set out in the Board
biographies on pages 54 and 55.
The Board reviews the independence of its
Non-Executive Directors as part of the annual
Board and Director evaluation process.
TheNomination Committee also considers
Non-Executive Director independence on an
ongoing basis as part of its consideration of
thecomposition of the Board. The Board
hasdetermined that all the Non-Executive
Directors were independent as outlined in
theCode.
The Board also believes that each of the
Independent Non-Executives has retained
independence of character and judgement and
has not formed associations with management
or others that may compromise their ability to
exercise independent judgement or act in the
best interests of the Group.
Induction
All new Directors are given a comprehensive,
formalised induction programme tailored to
their individual needs. These programmes
consist of meetings and events designed to
ensure a smooth transition for the new
Director to the Board. The programme is
organised around three themes: business
familiarisation, corporate governance,
(including Directors’ duties) and Director
development. As part of the business
familiarisation theme, the Directors spend
timewith members of the CLT and senior
management to gain a deeper understanding
and insight of the operation of relevant
function lines and significant elements of the
business. Following the induction period, the
Director will be asked to provide feedback, and
the programme will be adapted as necessary.
Director re-election
The Code recommends that all directors of
FTSE 350 companies should be subject to
annual re-election. All Directors intend to offer
themselves for election or re-election at the
2025 AGM. This report, and in particular the
Board biographies on pages 54 and 55, sets
forth the contribution of each Director on the
Board to the Company, and on this basis, the
Board, and specifically the Chairman, believes
each Director proposed for re-election at the
AGM should be reappointed. The Board has
based its recommendations for re-election,
inpart, on its review of the results from the
Board evaluation process outlined on the next
page, and the Chairman’s review of individual
evaluations. It has assessed whether a Director
has demonstrated substantial commitment
tothe role (including time for Board and
Committee meetings noted in this report)
andother responsibilities, whilst taking into
account a number of considerations including
outside commitments and any changes thereof
during the period.
External commitments
The Company is mindful of the time
commitment required from Non-Executive
Directors in order to fulfil their responsibilities
on the Board effectively, particularly providing
constructive challenge and holding
management to account, and utilising their
diverse skills and experience to benefit the
Company and provide strategic guidance.
Prior to their appointment, prospective
Directors are asked to provide details of any
other roles or significant obligations that may
affect the time available for them to commit to
the Company. The Chairman and the Board
arethen kept informed by each Director of
anyproposed external appointments or other
significant commitments as they arise. These
are monitored to ensure that each Director
hassufficient time to fulfil their obligations
andChairman approval is required prior
toaDirector taking on any additional
externalappointment.
Each individual’s commitment to their role
isreviewed annually and any external
appointments or other significant
commitments of the Directors require the prior
approval of the Board. The Board will take into
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consideration the time commitment required
by the Non-Executive Director in their role as a
Board Director, Committee Chair or Committee
member in giving any such permission.
Directors’ conflicts of interest
Each Director is required to disclose conflicts
and potential conflicts to the Chairman and
theCompany Secretary as and when they
arise.As part of the induction process, a
newlyappointed Director is asked to disclose
any conflicts of interest to the Company.
Thereafter, each Director has an opportunity
todisclose conflicts at the beginning of each
Board and Committee meeting and as part of
an annual review.
None of the Directors declared to the Company
any actual or potential conflicts of interest
between any of their duties to the Company
and their private interests and/or other duties.
The Companies Act 2006 provides that
Directors must avoid a situation where they
have, or can have, a direct or indirect interest
that conflicts, or possibly may conflict, with
theCompany’s interests. Boards of public
companies may authorise conflicts and
potential conflicts, where appropriate, if their
company’s Articles of Association permit.
Board evaluation and
performancereview
The effectiveness of the Board, individual
Directors, and the Board’s main committees
are reviewed annually, with an externally
facilitated review conducted ordinarily every
three years, as required by the UK Corporate
Governance Code. The Board recognises the
benefit of a thorough evaluation process to
reflect on its strengths and the challenges it
faces, and to identify opportunities to improve
its effectiveness continuously.
Given the appointment of a new Non-Executive
Director, Reena Raichura, in June 2024, the
Board took the decision to defer the externally
facilitated Board evaluation to 2025 to allow
Reena sufficient time to integrate into the role
and make the assessment more effective and
meaningful. The results of the externally
facilitated review will be included in the 2025
Annual Report.
The Company Secretary conducted the
evaluation for 2024 in conjunction with the
Chairman. The Directors were asked to
complete a detailed Board performance
evaluation questionnaire to assess the
performance of the Board and the Committees
over the year. Each questionnaire was
analysed, and a summary of the results and
the Board’s performance was presented to the
Board for discussion.
The Board considers this exercise to be of
significant value, and focus is placed on
reviewing the quality of information provided
to the Board at the Board’s discussions, the
effectiveness of the Board, the composition of
the Board, including the skillset of the various
Directors, highlighting whether there are any
gaps in the breadth and depth of the Board
that should be addressed by the Nomination
Committee as part of its succession planning,
and to ensure that the Board is best placed to
deliver on its strategic goals and ensure the
long-term sustainable success of the Company.
The evaluation confirmed that there was a
strong emphasis on employee welfare, active
consideration of fairness to employees and
their rewards, and recognition of the need to
support wellbeing.
The evaluation concluded that the Board and
its Committees remain strong and effective,
with a clearly defined role and purpose.
Theevaluation found that the Board is
chairedwell, as demonstrated by the Board
discussions, which were rigorous and open,
combined with constructive challenge, allowing
for diversity of opinion.
Chairman’s and Directors’
performance
During the year, the Senior Independent
Director evaluated the performance of the
Chairman. In addition, the Non-Executive
Directors met independently from the
Executive Directors to discuss with the
Chairman the overall functioning of the
Boardand the Chairman’s contribution in
making it effective.
In addition, the Chairman holds regular
meetings with individual Directors at
which,among other things, their individual
performance is discussed. Informed by the
Chairman’s continuing observation of
individual Directors, these discussions form
part of the basis for recommending the
reappointment of Directors at the Company’s
AGM, and include consideration of the
Director’s performance, contribution and
commitment to the Board and its Committees.
2024 Evaluation themes Areas of focus for 2025
Strategic focus and review
Integrate the strategic framework into presentations and
provide updates on the impact of AI and disruptive
technologies on the business.
Enhance ESG integration and
development
Schedule targeted training sessions on emerging topics
including ESG regulations and AI advancements, while
facilitating refresh session on specific areas.
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Board diversity
It is the Board’s policy that appointments will
always be based solely on merit without any
discrimination relating to age, gender or any
other matter that has no bearing on an
individual’s ability to fulfil the role of Director.
This principle of Board diversity is strongly
supported by the Board, recognising that
diversity of thought, approach and experience
is an important consideration as part of the
selection criteria used to assess candidates to
achieve a balanced Board.
Whilethe Board is mindful of the targets as
setout bythe FCA’s Listing Rules, in respect
of2024, the Board has not met the targets in
ListingRule 6.6.6(9) that at least 40% of the
Board should be female and one senior
position should be held by a woman. The Board
was delighted that in June 2024, we appointed
a new Director, Reena Raichura, and we
confirm that we meet the target under both the
UK Listing Rules and the Parker Review to have
at least one Board member from an ethnic
minority background. The disclosures required
under Listing Rule 6.6.6(9) are set out on page
106 of theDirectors’ report.
The charts opposite set out the demographic
information of the Board and the gender
diversity of the Board, CLT, the direct reports
tothe CLT and Company-wide employees.
Board composition
Gender diversity Board
Diversity overview
Board tenure
Gender diversity
–CLTdirect reports
Gender diversity – CLT
2
EthnicityAge of the Board
Gender diversity
Company‑wide
11% 33% 56%
Executive
Chairman
Executive
Director
Independent
Director
78% 22%
Male Female
75% 25%
Male Female
59% 41%
Male Female
66% 34% 0%
Male Female Non‑binary
1
11% 45% 22% 22%
0‑1
years
3‑4
years
5‑6
years
6‑7
years
33% 22% 45%
40‑49 50‑59 60‑69
89% 11%
White Asian
1. Rounded to nearest percent.
2. The CLT composition data excludes the three Executive Directors who are part of the CLT.
Alfa gender balance is captured through voluntary and confidential self-disclosure.
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Committee composition
We recognise that an
optimal Board of Directors
should reflect a diverse
range of views, insights,
perspectives and opinions,
which facilitates constructive
discussion.
Chris Sullivan
Nomination Committee Chair
Meetings held during 2024
Member
since
Meetings
attended
2024
Chris Sullivan 2019 2/2
Steve Breach 2019 2/2
Adrian Chamberlain 2020 2/2
Charlotte de Metz 2020 2/2
Andrew Page 2017 2/2
Reena Raichura
1
2024 n/a
1. Reena Raichura joined the Committee on
3 June2024.
The full Terms of Reference for the Committee
are reviewed annually and can be found at:
www.alfasystems.com/investors/governance.
Principal activities for 2024
• Identified and nominated a suitable
Non-Executive Director to be appointed
tothe Board.
• Reviewed the structure, size and
composition of the Board and
itsCommittees.
• Considered the wider elements of succession
planning for the Board and the CLT.
• Conducted evaluation of Directors (all of
whom are proposed for re-election at
theAGM).
Dear Shareholders,
On behalf of the Board, I am pleased to present
our 2024 Nomination Committee Report, which
summarises our key activities during the year.
During 2024, the Committee continued to
recognise the importance of building an
experienced, effective and open Board working
together with the CLT to achieve Alfa’s strategic
objectives. The Committee ensures that the
Board and the CLT have the right balance of
skills, knowledge and experience to both
discharge their responsibilities and to respond
appropriately to emerging challenges and
opportunities. With this in mind, the
Committee continued its succession planning
for the Board, Executive Directors and CLT, and
considered Alfa’s approach to the development
of the wider talent pipeline and, in particular,
key senior management.
The Committee undertook a thorough review
of the composition of the Board and the
Directors’ relevant skills and experience to
ensure that we have the right balance to fulfil
the Company’s strategy. This review identified
a requirement for enhanced expertise in
product management and development. In
June 2024, we were delighted to welcome
Reena Raichura to the Board, as an additional
Non-Executive Director.
Reena’s appointment also addressed a key
diversity gap, aligning the Board with the
principles of the Parker Review. While the
Board acknowledges it is not yet fully compliant
with the gender requirements of the FCA’s
diversity targets and FTSE Women Leaders
Review, progress has been made and the
Board remains committed to advancing
diversity initiatives in line with best practices.
We recognise that an optimal Board of
Directors should reflect a diverse range of
views, insights, perspectives and opinions,
which facilitates constructive discussion and
enables enhanced decision-making and
effectiveness, and we believe that the current
Alfa Board epitomises these principles. We
promote an open and inclusive culture in Board
and Committee meetings, where all Directors
are encouraged to share their views and where
their views are all considered without bias
ordiscrimination.
The Committee pays particular attention in its
oversight of employee engagement to ensure
there are no cultural or structural barriers
forwomen and ethnic and other under-
represented groups. It is satisfied that the
Company continues to promote DEI, and it
expects to see an increasingly diverse talent
pipeline that will feed into its workforce with
more people from minority groups.
Chris Sullivan
Nomination Committee Chair
67% 33%
Male Female
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1 3 5 72 4 6 8 9
Committee role and membership
The Committee comprises the Executive
Chairman and the Non-Executive Directors,
and is chaired by Chris Sullivan, the Senior
Independent Director.
The Nomination Committee is responsible
forensuring the composition and structure
ofthe Board remains effective, balanced and
optimally suited to the Company’s strategic
priorities. This involves overseeing the
nomination, induction, evaluation and orderly
succession of Directors. This is achieved
through effective succession planning, the
identification and development of internal
talent, and a clear understanding of the
competencies and capabilities required to
support the delivery of Alfa’s strategy.
It oversees the recruitment process and
advises the Board on the identification,
assessment and selection ofcandidates;
drivesthe DEI agenda; and confirms that all
appointments are made on merit against
objective criteria. The Committee is
responsible for ensuring that a comprehensive
induction programme is delivered on the
appointment ofa new Non-Executive Director
and leads theannual evaluation process of
theBoard.
The Committee’s performance was reviewed as
part of the 2024 internal Board and Committee
effectiveness review, which is detailed on
page69. The evaluation established that the
Committee functions well in terms of planning
succession to Board roles, CLT and the future
talent pipeline.
Environmental
and sustainability
Governance and
risk management
Financial
Human resources and
talent management
International business
Operational
Strategy development
andimplementation
Technology and
cybersecurity
The Company Secretary supplies all Directors with
information on relevant corporate governance and
best practice. As part of their annual performance
evaluation, Directors are given the opportunity to
discuss training and development needs. Additional
training is available on request, where appropriate,
so that Directors can update their skills and
knowledge as applicable. The Committee is
confident that Board members havethe knowledge,
ability and experience to perform the functions
required of a Director of alisted company.
Skills and experience
The Committee regularly reviews the composition
ofthe Board to ensure that its members have the
rightbalance of skills and experience to support
management in the delivery of the Group’s strategy.
The Committee identified a requirement for an
additional Director, and led the search process for
potential candidates, to ensure that due consideration
continues to be given to candidates who would
enhance the effectiveness of the Board.
In June 2024, we welcomed Reena Raichura to the
Board who bringsa wealth of expertise in product
management and development. Following the
appointment of Reena Raichura, the Board is satisfied
that it has the appropriate range of skills, experience,
independence and knowledge of the Company to enable
it to effectively discharge its duties and responsibilities.
The Directors completed a self-capability assessment,
which supports our ongoing succession planning work.
The output is shown in the skills and experience matrix
opposite. Following a skills and experience review, the
Board will undergo ESG training in 2025 to enhance its
understanding of key sustainability regulations.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Succession planning
The Committee keeps under review the
leadership needs of the organisation, and both
the Executive and Non-Executive Directors,
with a view to ensuring the continued ability of
the organisation to compete effectively in the
marketplace. The Committee undertakes
comprehensive reviews of the leadership
needs of the Company, to ensure the continued
ability of the organisation to compete
effectively in the marketplace.
In addition, the wider talent and succession
planning programmes remained a key focus
ofthe Committee during the year. It evaluated
the succession plans for the CLT and the
seniormanagement structure, and reviewed
employees identified by management as
having the potential to develop in the longer
term into future leaders of the business,
takinginto account future challenges and
opportunities. The Committee has ensured
that there are plans in place for short and
medium-term succession for the Board
andCLT.
The Committee considers the implications of
the requirements relating to the development
of a diverse pipeline for succession for the
Board and the CLT. Discussions were held
about initiatives taken to increase the diversity
in the hiring process, including drawing on
NEDs’ experience in other organisations of
attracting diverse talent.
Diversity, equity and inclusion
The Company is committed to increasing
diversity across our operations and has a wide
range of activities to support the development
and promotion of talented individuals,
regardless of factors such as gender, age,
ethnicity, disability, sexuality and religious belief.
The Committee will take into account a variety
of factors before recommending any new
appointments to the Board. The Committee
ismindful of ensuring diversity on the
Board,butultimately the Board appoints
candidates based on merit and assesses
potential Directors against measurable,
objective criteria.
We promote an open and inclusive culture in
Board and Committee meetings, where all
Directors are encouraged to share their views
and where their views are all considered,
without bias or discrimination. The Committee
considered the gender balance of the CLT and
its direct reports, and received information
onthese from the Chief People Officer on
aregular basis.
As at 31 December 2024, in accordance with
the UK Listing Rules disclosure requirements,
one Director is from an ethnic minority
background, female representation on the
Board is 22% and no senior positions are held
by a woman (this remains the case as at the
date of this Annual Report).
Diversity data on these targets in the required
standardised form can be found in the
Directors’ report on page 106.
The Committee confirms that it has met the
target set by the Parker Review with regard to
ethnic diversity. It acknowledges that the Board
does not meet the target set by the FTSE
Women Leaders Review. We continue to
cultivate a Board which emphasises diversity
ofthought, to ensure that there is appropriate
challenge, interpretation and interactions to
reflect a greater variation in approaches to
problems and unique perspectives.
Diversity, equity and inclusion policy
The Committee established a new Board policy
on diversity, equity and inclusion (DEI Policy),
which will apply to the Board but complements
Alfa’s wider diversity policies, our values, Code
of Conduct and sustainability framework. The
Board DEI Policy outlines the belief that better
decision-making and outcomes are achieved
when people with differences of opinion
andwith different backgrounds and lived
experiences come together with a
commonambition.
In assessing its composition, the Board
considers a broad range of diversity factors,
including geographical, social and ethnic
backgrounds, race, gender, and cognitive
strengths. These factors are integrated into
theannual Board effectiveness review, and all
appointments follow a formal, merit-based
process that ensures transparency and
fairness. Additionally, the Board actively works
to build a diverse succession pipeline to
strengthen future leadership.
Alfa continues to ensure that is has an inclusive
workplace at all levels of the Company. The
Committee supports the DEI initiatives set
bythe Company, and recognises that the
Company is evolving in this space. Recruitment
is continually reviewed to ensure equality
during the process.
As a Board we monitor the implementation
ofAlfa’s DEI charter, including relevant metrics,
satisfying ourselves that Alfa’s culture is
andremains aligned to its purpose, strategy
and values.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Appointment of Directors
There is a formal, rigorous and transparent
procedure for the appointment of new
Directors under which the Committee is
responsible for leading this process and
making recommendations to the Board.
Thesearch process for new Non-Executive
Directors typically involves appointing an
external search firm to identify a strong and
diverse pool of candidates. However, in the
recent appointment of Reena Raichura, an
external agency was not used. Given the
specific requirement for a candidate with
extensive Fintech product knowledge,
theBoard leveraged its deep industry
expertise and existing network to identify
anoutstanding candidate.
If discussions relate to the appointment of
aChairman, then Chris Sullivan, as Senior
Independent Director, will lead the recruitment
process. When the Committee has found
asuitable candidate, the Chair of the
Committee will make a proposal to the Board,
which retains responsibility for all such
appointments. The Committee, on behalf of
the Board, regularly assesses the balance of
Executive and Non-Executive Directors, and
the composition of the Board in terms of skills,
experience, diversity and capacity.
Induction and ongoing professional
development
To ensure that each Director receives
appropriate support on joining the Board,
there is a comprehensive and tailored
induction programme, including the provision
of background material on the Company and
briefings with relevant CLT members. The
induction programme will continue to be
reviewed and updated on a regular basis.
Forprofessional ongoing development, the
Board receives presentations relevant to the
Company’s business and updates on any
changes to markets, or regulations, which
mayaffect the Company’s operations.
External directorships
All Directors are required to request approval
from the Board before accepting any new
external directorships. The Board will consider
the time commitment required for the role
under review and any potential conflict of
interest. There were no new public
appointments in relation to the Directors
during 2024.
The Board believes, in principle, in the benefit
of Executive Directors accepting Non-Executive
Directorships of other companies in order to
widen their skills and knowledge for the benefit
of the Company. All such appointments require
the prior approval of the Board and the
number of public company appointments
islimited to one.
Conflicts of interest and
independence
The Board operates a policy to identify and,
where appropriate, manage any potential
conflicts of interest that Directors may have.
Itis the role of the Committee to monitor and
determine actions to address any potential, or
actual, conflicts that may arise. The Committee
reviews all potential conflicts of interest on an
annual basis and when new Directors are
formally appointed. No conflicts of interest
were noted in the year and to the date of this
Annual Report.
On behalf of the Board, the Committee
reviewed the independence of each Non-
Executive Director and is satisfied that all
Non-Executive Directors, including the Chair,
remain independent under the definition in the
Code. Furthermore, the Committee is satisfied
that each of the Non-Executive Directors
commits sufficient time to meet their Board
responsibilities. All Directors are required to
submit an annual declaration of conflicts of
interest and to declare any new conflicts as
they arise. The Board delegates to the
Committee the responsibility for reviewing
theprocedures for assessing, managing and,
where appropriate, recommending the
approval of any conflicts of interest to the
Board. The Committee reported to the Board
that the current procedures are appropriate
and that they have operated effectively during
the year.
The Committee is satisfied that the external
commitments of the Board’s Chairman and
members do not conflict with their duties as
Directors of the Company.
Election and re-election of Directors
The re-election of Directors is subject to their
continuing commitment to Board activities and
satisfactory performance. All Directors will
stand for re-election annually in accordance
with the provision of the 2018 Code. Following
discussion of the skills and contribution of each
Director, and in conjunction with the Board
performance evaluation, the Committee
supports the proposed re-election of all
Directors standing for re-election at the AGM
in2024. The Committee has confirmed to the
Board that the contributions made by the
Directors offering themselves for re-election
atthe 2024 AGM continue to benefit the Board
and the members are invited to support their
re-election. Non-Executive Directors are
appointed initially for three years and Non-
Executive Directors may, subject to Board
approval, remain in office for a period of up to
six years, or two terms in office, with discretion
for the Board to extend the term for one
further three-year term, to a maximum of
nineyears.
Chris Sullivan
Chair, Nomination Committee
12 March 2025
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Introducing our new
Non-Executive Director
Reena Raichura
Board Appointment and Induction
Before officially joining the Board in June 2024,
Reena Raichura met with fellow Board
members and the Executive Directors.
As part of her induction, Reena received
acomprehensive induction pack containing key
corporate documents and information about
the Group. This covered the role of a director,
including relevant policies on anti-bribery,
conflicts of interest, expenses, gifts and
hospitality, and share dealing. It also provided
insights into the Board and its Committees,
financials, strategy, governance, risk
management, culture, shareholders, and
available training.
Upon joining, Reena underwent a tailored
induction program, which included meetings
with key internal stakeholders. The programme
focused on the Group’s culture, values,
stakeholders, strategy, operations, product
management and governance. It was designed
to align with herspecific role and leverage her
skills andexperience.
Stakeholder engagement initiatives
Town Hall – Conversation with the NEDs
Reena participated in both the EMEA and Asia
Pacific town halls, where she introduced
herself to Alfa colleagues. Shehighlighted her
extensive background in financial services
technology and product management and
shared her enthusiasm for product and
technology. She highlighted how her expertise
would contribute to shaping key initiatives,
enhancing product management strategies,
and help drive innovation. She shared her
initial impressions of Alfa, emphasising its
strong culture, leading technology, and
commitment to value creation.
“Meet the NEDs” Social Event
Reena engaged with colleagues at an informal
“Meet the NEDs” social event held at the
Company’s head office. This provided
employees with an opportunity to interact with
Non-Executive Directors in a relaxed setting.
Alfa Systems 6 Launch Event
Reena attended the Alfa Systems 6 Launch
event, held in conjunction with the EMEA User
Group meeting. This allowed her to network
with customers and gain direct feedback from
users on the new system launch.
Professional Development
Reena completed an externally facilitated
Non-Executive Director course to enhance
herunderstanding of the role. This program
covered a non-executive director’s legal
andpractical responsibilities, strategies for
building an effective Board, and approaches
tonavigating boardroom challenges.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Principal activities in 2024
• Reviewed the 2023 year-end financial
statements and Annual Report.
• Reviewed the half-year financial results and
trading updates.
• Approved the Company’s risk management
framework, risk appetite and risk register.
• Reviewed key findings from 2024 internal
audits and considered the 2025 internal
audit plan.
• Received an update on information and
cyber security.
• Reviewed the Company’s Business
Continuityarrangements.
• Reviewed the tax compliance status.
• Reviewed Internal and External Audit
effectiveness.
• Reviewed a letter received from the Financial
Reporting Council on its review of the 2023
Annual Report and Accounts (see page 82).
• Considered key accounting matters.
Areas of focus for 2025
• Continue to monitor legislative and
regulatory changes that may impact the
work of the Committee.
• Continue with oversight of internal audit
activities and findings.
• Continue oversight of the Company’s risk
management framework including
developments arising from the revised
UKCorporate Governance Code.
• Monitor the continued progressive
enhancements to Alfa’s systems and
internalcontrols across all key functions
ofthe business.
Dear Shareholders,
I am pleased to present our Audit and Risk
Committee Report for the year ended
31 December 2024. The Report explains the
work of the Committee during the year, as
wellas setting out expected key areas of focus
for 2025.
The Committee has an annual work plan linked
to the Company’s financial reporting cycle,
which ensures that it considers all matters
delegated to it by the Board.
We have continued to review and challenge
theassumptions and judgements made by
management in the preparation of published
financial information and to oversee the
internal control environment, including
oversight of the external and internal audit
processes. Throughout the year, the
Committee’s primary focus was to maintain the
integrity and transparency of the Company’s
internal and external financial reporting.
Wecontinued to spend time assessing the
application of IFRS 15 ‘Revenue from
Contractswith Customers’, alongside
carefulconsideration of the Company’s risk
management framework, internal controls
andmanagement information systems.
During the year, the Company continued to
refine key processes and further enhance
insightful management information across
itsbusiness.
Alongside core financial controls, Alfa’s cyber
and information security resilience is critical.
The Committee has continued to pay close
attention to management’s work to enhance
Alfa’s cyber security control environment.
Committee members’ skills and experience
areset out on page 72. The Board issatisfied
that the Committee meets the requirement to
have recent and relevant financial experience,
and that, as a whole, its members have
experience of the auto and equipment finance
and enterprise software sector and corporate
governance.
As a result of its work during the year, the
Committee has concluded that it has acted in
accordance with its Terms of Reference.
Steve Breach
Chair of the Audit and Risk Committee
Continued enhancement of
Alfa’s governance frameworks
to support our growth.
Steve Breach
Chair of the Audit and Risk Committee
Meetings held during 2024
Member
since
Meetings
attended
2024
Steve Breach (Chair) 2019 4/4
Adrian Chamberlain 2020 4/4
Reena Raichura
1
2024 3/3
Charlotte de Metz
2
2020 3/4
Chris Sullivan 2019 4/4
1. Reena Raichura joined the Committee on
3 June2024.
2. Charlotte de Metz was unavailable to attend one
meeting due to an unavoidable commitment in
connection with her executive role.
The Committee’s members are all
Independent Non-Executive Directors.
The full Terms of Reference for the Committee
are reviewed annually and can be found at:
www.alfasystems.com/investors/ governance.
60% 40%
Male Female
Committee composition
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Key responsibilities of the Committee
The Board has delegated to the Committee
responsibility for overseeing financial reporting,
the review and assessment of the effectiveness
of the internal control and risk management
systems, and maintaining an appropriate
relationship with the external auditor.
The Committee has adopted Terms of
Reference, which are available to view at
www.alfasystems.com/investors/governance.
The Terms of Reference provided the
framework for the Committee’s work in the
year and key responsibilities of the Committee
are summarised as follows:
• Overseeing the relationship with the
Company’s external auditor, monitoring its
effectiveness and independence, and making
recommendations to the Board in respect of
its remuneration, appointment and removal.
The Committee also reviews the findings
from the external auditor, including
discussion of significant accounting and audit
judgements, levels of errors identified and
overall effectiveness of the audit process.
• Reviewing the financial statements of the
Company, including its annual and half-
yearly reports and, if applicable, any other
formal announcements relating to its
financial performance. The Committee will
also consider significant financial reporting
issues, accounting policies and key areas of
judgement or estimation. This review also
includes consideration of the clarity and
completeness of disclosures of the
information presented in the financial
statements.
• Overseeing the accounting principles,
policies and practices adopted by the
Company.
• Monitoring and reviewing internal audit
activities, reports and findings.
• Reviewing the effectiveness of the
Company’s system of internal financial
controls and internal control systems.
• Advising the Board on the Company’s risk
strategy, risk policies and current and
emerging risk exposures, including the
oversight of the overall risk management
framework and systems.
• Assessing the adequacy and security of the
Company’s arrangements for its employees
and contractors to raise concerns, in
confidence, about possible wrongdoing in
financial reporting or other matters and to
ensure proportionate and independent
investigation of such matters.
• Making recommendations to the Board
asitdeems appropriate on any area within
its remit where action or improvement
isrequired.
• Providing advice on whether the Annual
Report and Accounts, taken as a whole,
isfair, balanced and understandable.
• Reporting to the Board on how it has
discharged its responsibilities.
• Developing and implementing policy on
theengagement of the external auditor
tosupply non-audit services.
Meetings
During the year, the Committee met four times
and met privately with the external auditor
twice. The Committee operates to a forward
agenda linked to the financial calendar which
ensures that the responsibilities and duties of
the Committee are discharged in accordance
with the Terms of Reference and the
requirements of the UK Corporate
GovernanceCode.
In addition to the Committee members, by
invitation, the meetings of the Committee
maybe attended by the CFO. The Chairman
ofthe Board, CEO and COO may also attend
meetings. The Company’s external auditor and
the internal audit services provider are also
present at all Committee meetings, to ensure
full communication of matters as they relate
totheir respective responsibilities. At the end
of each Committee meeting, Committee
members have the opportunity to meet with
the external auditor (and, where appropriate,
the internal auditor) for a private discussion
regarding the audit process and relationship
with management.
The Chair of the Committee holds regular
meetings with the external auditor, which has
an opportunity to discuss matters with the
Committee without management being
present, and also with the CFO (who has
responsibility and custody of the internal
auditfunction).
Meetings of the Committee are scheduled
close to the end of the half and full year, as well
as before the publication of the associated half-
year and full-year financial reports, so as to
ensure the Committee is informed fully, on a
timely basis, on areas of significant risks and
judgement. The Board has confirmed that it is
satisfied that Committee members possess an
appropriate level of independence and depth
of financial and commercial expertise. For the
year ended 31 December 2024, Steve Breach,
the Chair of the Committee, was determined
bythe Board as having recent and relevant
financial experience.
The Committee is satisfied that it receives
sufficient information and has access to
relevant and timely personnel to allow the
Committee members to engage in an informed
debate during Committee meetings and to
fulfil its responsibilities.
Significant financial reporting
judgements
As part of its monitoring of the integrity of the
financial statements, the Committee reviews
whether suitable accounting policies have been
adopted and whether management has made
appropriate estimates and judgements and
seeks support from the external auditor to
assess them. The Committee considered the
following significant judgements, and other
areas of audit focus in respect of the financial
statements for the six months ended 30 June
2024 and year ended 31 December 2024.
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These areas have been identified as being significant by virtue of their materiality or being accounting items which are new for the current financial year or the level of judgement and/or estimation
involved. In order to ensure the approaches taken were appropriate, the Committee considered reports from both management and the external auditor. The Committee challenged judgements and
sought clarification where necessary. The Committee received a report from the external auditor on the work it had performed to arrive at its conclusions and discussed in detail all material findings
contained within the report.
Area of focus Assessment Review of the Committee Conclusion/Action taken
Revenue recognition
The Group’s operations include complex software
implementation programmes and service activities. The
delivery of these contracts typically extends over more than
onereporting period, and often the original project plans are
amended as the implementation programme progresses.
Contract modifications also occur from time totime.
In recognising customised licence revenue, management must
apply a number of judgements to allocate the overall
transaction price across the multiple performance obligations
that have been identified within these projects. Estimates are
applied in this assessment, for example when assessing the
standalone selling price.
Judgements are also made when the Group enters into new
contracts with existing customers or when there are changes to
existing contracts with customers, such as the addition of new
customer-specific contractual terms.
In advance of the half-year and full-year results, the Committee
received reports from management that outlined the key
judgements that were likely to be required to be included in
theresults. These reports were reviewed and the key points
within them were discussed with the external auditor
commenting, whererelevant.
As part of the process of approving the issuing of the half-year
and full-year results, these reports were updated and issued
bymanagement to the Committee with management’s final
positions documented. These were considered carefully by the
Committee in conjunction with input from the external auditor.
The Committee agreed with
the revenue judgements
adopted by management.
Development costs
The Group continues to invest in the development of the Alfa
Systems product. Some of the development effort is
undertaken in partnership with customers and therefore is
specific to that implementation or customer’s process.
Judgement is required to assess whether any development is
substantially new in either design or functionality, and whether
it would be commercially viable in the open market. Therefore,
management assesses the likelihood of capitalisation of such
costs prior to initiation of the investment project and also
performs regular assessments of the development work that
has been undertaken to determine if it meets the criteria set out
in IAS 38 for capitalisation. Management’s review also covers
amortisation and impairment considerations.
The Committee reviewed reports from management
detailingthe costs that had been identified as appropriate
forcapitalisation. These were considered carefully by the
Committee in conjunction with input from the external auditor.
The Committee concurred
with management’s approach
on the amounts to be
capitalised in both the
half-year and full-year results.
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Area of focus Assessment Review of the Committee Conclusion/Action taken
Goodwill and carrying value
of investments
The Group has goodwill on its balance sheet and the Company
holds investment in subsidiaries. These need to be reviewed
annually to assess whether the recoverable amount exceeds the
book value and, in the case of investment in subsidiaries, also to
see if a previous impairment should be reversed.
The Committee reviewed and challenged management’s
impairment assessment.
The Committee agreed that
no impairment was required
in the current year for both
goodwill and the carrying
value of the investment in
subsidiaries.
Going concern and
Viabilitystatement
The Directors must satisfy themselves regarding the Group’s
long-term viability and confirm that they have a reasonable
expectation that the Group will continue to operate and meet
its liabilities as they fall due for the foreseeable future.
The Committee reviewed management’s budget and forecasts,
including an overview of the assumptions made in the
preparation of the base case supporting the going concern and
viability statement. This included the Group’s 2025 budget and
also plans for 2026 and 2027.
The Committee discussed and challenged the budget and
forecasts before agreeing with the reasonableness of the
three-year period.
The Committee assessed this in light of the principal risks
anduncertainties as disclosed on pages 37 to 45 in the
Strategicreport.
The Committee discussed and challenged the downside
scenarios modelled as part of the Viability statement as
disclosed on pages 49 to 50 in the Strategic report, the funding
headroom available, the feasibility of mitigating actions,the
dividend policy and the speed of implementation ofany
cost-saving measures following future management
decision-making.
The Committee noted the 2018 Code requirement for the
Directors to state whether they consider it appropriate to
adoptthe going concern basis of accounting for a period of
atleast 12months from the date of approval of the 2024
financial statements.
Following this evaluation and
analysis, the Committee was
satisfied with the judgements
made and that the continued
use of the going concern basis
was appropriate, and the
Viability statement was
prepared appropriately.
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Fair, balanced and understandable
The Committee has undertaken a careful
review to ensure that the Annual Report is ‘fair,
balanced and understandable’ and provides
the necessary information for shareholders to
assess the Company’s consolidated position,
performance, business model and strategy, in
line with the requirements of the 2018 Code.
The Committee members were consulted at
various stages during the drafting process and
provided input at the planning stage, as well as
having the opportunity to review the Annual
Report as a whole and discuss, prior to the
March 2025 Committee meeting, any areas
requiring additional clarity or better balance
inthe messaging. In forming its opinion and
recommendation to the Board in respect of
theabove matters, the Committee assessed
the following:
• A qualitative review of disclosures and a
review of internal consistency throughout
the Annual Report and Accounts;
• A review by the Committee of all material
matters, as reported elsewhere in this
Annual Report and Accounts;
• Disclosures in relation to the Task Force on
Climate-related Financial Disclosures (TCFD);
• A risk comparison review, which assesses the
consistency of the presentation of risks and
significant judgements throughout the main
areas of risk disclosure in this Annual Report
and Accounts;
• A review of the balance of good and
badnews.
• Ensuring it correctly reflects:
• The Company’s position and performance
as described on pages 119 to 150;
• The Company’s business model, as
described on page 5; and
• The Company’s strategy, as described on
pages 14 to 18.
On the basis of this work, together with the
views expressed by the external auditor, the
Committee recommended, and in turn the
Board confirmed, that it could make the
required statement that the Annual Report is
‘fair, balanced and understandable’.
Risk management
The Board has overall responsibility for
determining the nature and extent of its
principal and emerging risks and the extent
ofAlfa’s risk appetite, and for monitoring and
reviewing the effectiveness of the Company’s
systems of risk management and internal
control. Further details of the risk management
objectives and process are on pages 34 to 36.
The principal risks and uncertainties facing the
Company are addressed in the Strategic report
in the table on pages 38 to 45. The Board has
delegated to the Committee the responsibility
for monitoring the effectiveness of the systems
of risk management.
Internal control
The Board determines the objectives and
broad policies of the Company and meets
regularly, when a set schedule of matters
which are required to be brought to it for
decision is discussed. Overall management of
the Company’s risk appetite, its tolerance to
risk and discussion of key aspects of execution
of the Company’s strategy remain the
responsibility of the Board. The Board has
delegated to the Audit and Risk Committee
theresponsibility for overseeing the system
ofinternal controls to ensure these are
appropriate to the business environments
inwhich the Company operates.
Key elements of this system include
thefollowing:
• A clearly defined organisation structure for
monitoring the conduct and operations of
the business;
• Clear delegation of authority throughout the
Company, starting with the matters reserved
for the Board;
• A formal process for ensuring that key risks
affecting operations across the Company
areidentified and assessed on a regular
basis, together with the controls in place to
mitigate those risks. Risk consideration is
embedded in decision-making processes
atall levels and the most significant risks
areperiodically reviewed by the Board.
Theriskprocess is reviewed by the Audit
andRiskCommittee;
• The preparation and review of the
annualbudget;
• The monthly reporting of actual results and
their review against the budget, forecasts
and the previous year, with explanations
obtained for all significant variances;
• Controls in respect of financial reporting and
the production of the consolidated financial
statements are well established. Group
accounting policies are consistently applied,
and review and reconciliation controls
operate effectively; and
• The Finance Manual which outlines key
control procedures and policies to apply
throughout the Company and Group.
Thisincludes clearly defined policies and
escalating authorisation levels for all
procurement activity including capital
expenditure and investment.
During 2024, the Board, through the
Committee, has continued to monitor the
Company’s risk management and internal
control, and it has also reviewed their
effectiveness. Throughout 2024, Alfa’s
financial, operational and compliance
controlscontinued to operate as intended.
Internal audit
The Audit and Risk Committee supports the
Board in fulfilling its responsibilities to review
the activities, resources, organisational
structure and operational effectiveness of the
internal audit activities. Following discussion
with the Committee Chair and the CFO,
BDOLLP presents its internal audit plan for
approval to the Committee at the start of each
new financial year and provides an update and
further plans at the mid-year stage.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
The Committee monitored and reviewed the
scope, extent and effectiveness of the internal
audit plan in line with the Company’s key risks
and strategy. Internal audit is a standing
agenda item at each Committee meeting and
BDO LLP presents an update on audit activities,
the progress of the audit plans and the
outcomes of all audits with action plans to
address any issues. Activities of internal audit
during 2024 included the following areas
offocus:
• Strategic and business planning
• Financial controls – budget setting and
monitoring
• Diversity, equity and inclusion
• Performance management
• Follow-up on prior recommendations
The Committee performed an effectiveness
review of internal audit during the year.
As part of this review referenced above, and
considering management’s opinion, the
Committee was satisfied that the internal audit
function remains effective and fit for purpose.
External audit
The Committee oversees the Company’s
relationship with, and the performance of, the
external auditor. This includes responsibility
for monitoring its independence, objectivity
and compliance with ethical and regulatory
requirements. The Committee is the primary
contact with the external auditor. The
Committee also has responsibility for
approving the nature of non-audit services
which the external auditor may or may not be
allowed to provide to the Company and the
fees paid for these services (subject to de
minimis levels).
Independence and performance of the
external auditor
The Committee is responsible for reviewing the
independence of the Company’s external
auditor, RSM, agreeing the terms of
engagement and the scope of its audit.
RSM has a policy of partner rotation, which
complies with regulatory standards, and RSM
operates a peer review process for its
engagements, to ensure that its independence
is maintained. The Committee reviewed a
report from the external auditor describing its
arrangements to identify, report and manage
any conflicts of interest.
Maintaining an independent relationship with
the Company’s external auditor is a critical part
of assessing the effectiveness of the audit
process. The Board has approved a policy
which is intended to maintain the
independence and objectivity of the external
auditor. The policy, which was updated in the
year, governs the provision of audit, audit-
related services and non-audit services
provided by the auditor. Committee approval is
required for any service with an expected cost
in excess of £10,000. During 2024, the external
auditor confirmed to the Committee that it
didnot provide any non-audit or additional
services other than for the half-year review
that could lead to its objectivity and
independence being compromised on behalf
ofthe Company.
Details of audit, audit-related fees and
non-audit fees are included in note 9 to the
consolidated financial statements.
The Committee notes that audit partner
rotation every five years facilitates
independence and objectivity within the
External Audit team. The current External Audit
Engagement Partner is Graham Ricketts, who
was appointed to lead the audit in July 2020.
Consequently, the year ended 31 December
2024 will be his last year as Audit Engagement
Partner. The Committee is satisfied with the
performance and effectiveness of RSM as
external auditor, taking into account the
Committee’s own assessment and feedback.
The Committee has concluded that RSM
displays the necessary attributes of
independence and objectivity.
The Committee confirms its compliance with
the provisions of The Statutory Audit Services
for Large Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Audit Committee
Responsibilities) Order 2014 for the financial
year ending 31 December 2024.
Assessment of the audit process
The scope of the external audit is formally
documented by the auditor. It discusses the
draft plan with management before it is
referred to the Committee, which reviews its
suitability and holds further discussions with
management and the auditor before final
approval. The Committee has reviewed the
quality of the audit plan and related reports for
the 2024 audit and is satisfied with the quality
of these documents.
The Committee discussed the quality of the
half-year review and audit work since RSM’s
appointment and considered the performance
of the external auditor, taking into account
feedback from various stakeholders across
thebusiness and the Committee’s own
assessment. The evaluation focused on:
robustness of the audit process; quality of
delivery; reporting; and people and services.
The Committee reviewed the independence
ofthe external auditor and concluded that it
complies with UK regulatory and professional
requirements and that its objectivity is not
compromised.
The Committee will conduct an audit services
tender at least every ten years to ensure that
the independence of the external auditor is
safeguarded. As noted above, under the audit
partner rotation rules there will be a new
External Audit Engagement partner for the
year ended 31 December 2025. Each year we
assess the effectiveness of the external auditor
and, subject to the Committee continuing to
believe that the audit is effective, our intention
would be to continue with RSM as external
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
auditor up to and including the audit for the
year ending 31 December 2029. Assuming this
is the case then our expectation would be to
run a tender process during the calendar year
ended 31 December 2029 in order to select a
new auditor for the year ended 31 December
2030. When considering the appropriate time
to conduct the audit tender, the Committee
takes into account the benefit of an incumbent
firm with deep knowledge of the Group’s
operations, the independence and objectivity
of the appointed auditor and audit partner
andthe results of the audit effectiveness
assessment. The Committee currently believes
that this approach is in the best interests of
theshareholders of Alfa Financial Software
Holdings PLC.
Going concern and Viability
statements
The Committee reviewed the updated wording
of the Company’s longer-term Viability
statement, set out on pages 49 to 50. To do
this, the Committee ensured that the financial
model used was consistent with the approved
three-year plan and that scenario and
sensitivity testing aligned clearly with the
principal risks of the Company. Committee
members challenged the underlying
assumptions used and reviewed the results of
the detailed work performed. The Committee
was satisfied that the analysis supporting the
Viability statement had been prepared on
anappropriate basis. The Committee also
reviewed the going concern statement, set
outon page 24 and confirmed its satisfaction
with the testing methodology.
Assessment of the effectiveness of
the Committee
The Committee’s effectiveness in respect of
2024 was evaluated as described on page 69.
The key issues that were identified in the
Committee evaluation were discussed by the
Committee to ensure these were adequately
addressed and the Chair provided an update
where appropriate.
Communication with the Financial
Reporting Council
During the year, the Chair of the Board received
a letter from the Financial Reporting Council
(FRC) stating that the 2023 Annual Report and
Accounts had been reviewed by its Corporate
Reporting Review team. We were pleased to
learn that, following its review, the FRC had
noquestions or queries to raise with the
Company. The FRC did make some
observations that it believed could enhance
existing disclosures, and these have been
considered by the Committee and
management as part of the preparation
ofthe2024 Annual Report and Accounts.
We note that the FRC review was based solely
on the Annual Report and Accounts and did
notbenefit from detailed knowledge of
ourbusiness, or an understanding of the
underlying transactions entered into. The FRC
letter provides no assurance that the Annual
Report and Accounts are correct in all material
respects, and the FRC accepts no liability for
reliance on the letter by the Company or any
third party.
Focus for 2025
In 2025, as well as the regular cycle of
mattersthat the Committee schedules for
consideration each year, the Committee will
continue to monitor legislation and regulatory
changes, including those that affect the audit
market that may impact the work of the
Committee as well as the new Corporate
Governance Code. The Committee will also
continue with oversight of internal audit
activities and findings as well as monitoring
thecontinued progressive enhancements to
Alfa’s systems and internalcontrols.
Steve Breach
Chair, Audit and Risk Committee
12 March 2025
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Principal activities in 2024
• Reviewing remuneration of the Executive
Directors and members of the CLT (including
salary, benefits and variable incentives).
• Reviewing and approving the performance
outturns against the financial and non-
financial measures for the 2023 annual
bonus, and approving pay-outs.
• Reviewing and approving the 2024 Long-
Term Incentive Plan (LTIP) proposal
andgrant.
• Reviewing and approving the 2024 annual
bonus framework and measures, and award
opportunities.
• Reviewing shareholder feedback on the
revised Directors’ Remuneration Policy and
approving the Policy which was presented to
shareholders at the 2024 AGM;
• Approving the 2023 Directors’ Remuneration
Report, including the Gender Pay Gap report
and CEO pay ratio.
• Overseeing the remuneration of the wider
Alfa workforce.
• Overseeing employee share plans, including
the UK (Sharesave) and US (ESPP).
• Reviewing the Terms of Reference.
Dear Shareholders,
On behalf of the Remuneration Committee,
Iam pleased to introduce the Directors’
Remuneration Report for the year ended
31 December 2024.
In this Report, I have set out information
onthebusiness context and the wider
operating environment, details of executive
remuneration outcomes in 2024, the key focus
areas for the Committee during 2024, and the
intended implementation of the Directors’
Remuneration Policy for 2025. We were
delighted to receive strong shareholder
support for our revised Directors’
Remuneration Policy at the 2024 AGM, which
was approved with over 99% support. A full
copy of the Policy can be found on our website
at www.alfasystems.com/investors and pages
106 to 113 of the 2023 Annual Report.
Our performance
In 2024, Alfa performed strongly both
operationally and financially. We continued
toexercise disciplined capital management
thisyear, delivering three dividends to
shareholders. This reflects the strength of
ourfinancial position and our commitment
toproviding consistent returns, even as we
invested in initiatives to drive sustainable,
long-term growth.
Further detail on our overall performance
during 2024 is set out in the CEO’s review on
pages 6 to 9 and the CFO’s Financial review on
pages 21 to 24.
Our people
In 2024, the Committee reviewed remuneration
and related policies across the broader
workforce and confirmed that Executive
Directors’ pay remains aligned with the wider
workforce. This alignment was maintained
through the consistent application of pay
principles across the Group and an equitable
annual pay review process. Notably, the salary
increase for Executive Directors was lower than
that of the wider workforce, reinforcing the
Group’s commitment to fairness and
proportionality in remuneration.
The Committee receives updates on the People
strategy and talent management from Vicky
Edwards, the Chief People Officer, which serve
as valuable input for decisions regarding
Executive Director remuneration and that of
the CLT.
Remuneration outcomes for 2024
As explained in last year’s report, for the year
commencing 1 January 2024, the Committee
increased Duncan Magrath and Matthew
White’s salaries by 1.8%, well below the
employee average salary increases of 7.7%.
Thesalaries for the Chairman and CEO were
increased to align with the London Living Wage
and they voluntarily waived their right to
receive a bonus or LTIP.
We ensure remuneration
alignment by consistently
applying pay principles across
the Group and conducting an
equitable annual pay review
process.
Adrian Chamberlain
Chair, Remuneration Committee
Meetings held during 2024
Member
since
Meetings
attended
2024
Adrian Chamberlain 2020 3/3
Steve Breach 2019 3/3
Charlotte de Metz
1
2020 2/3
Reena Raichura
2
2024 2/2
Chris Sullivan 2019 3/3
1. Charlotte de Metz was unavailable to attend one
meeting due to an unavoidable commitment in
connection with her executive role.
2. Reena Raichura joined the Committee on 3 June 2024.
The full Terms of Reference for the Committee can
befound at www.alfasystems.com/en-eu/investors/
governance.
60% 40%
Male Female
Committee composition
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
As a result of Alfa’s continued strong
performance, the Committee approved
annualbonus outcome of 69.0% and 68.6%
achievement for Duncan Magrath and Matthew
White respectively for 2024. In reaching this
decision, the Committee considered the
formulaic outcome against the targets set
atthe start of the year, and the broader
underlying performance ofthe Company.
Consistent with the Remuneration Policy, 50%
of the bonus earned by Duncan Magrath and
Matthew White will be paid in cash, and the
remaining 50%, after the deduction of tax, will
be deferred in Alfa shares for three years.
With regard to the Group’s longer-term
incentives, performance conditions attached to
LTIP awards made on 12 April 2022 were tested
to 31 December 2024. The award is based
equally on growth in earnings per share (EPS)
and total shareholder return (TSR). TSR over
the three-year period was 28.4%, which ranked
Alfa in the top quartile against its benchmark.
The Group’s 2024 diluted EPS outturn of 8.56
pence warrants 74% vesting of this award
element. Accordingly, 87% of the award will
vest in April 2025, and will be subject to
amandatory two-year holding period. Further
details, including the value of these awards,
areincluded on pages 87 to 89.
The Committee is satisfied that overall pay
outcomes in respect of the year ended
31 December 2024 are appropriate and
reflectAlfa’s strong financial and operational
performance. The annual bonus outcome for
theyear reflects strong financial performance
in2024, while vesting of the awards granted
under the 2022 LTIP reflects long-term, strong
performance for shareholders during the
period. The Committee has therefore not
exercised any discretion in relation to its
assessment of the outcome of the variable
payschemes, or to overall remuneration
levelsthis year.
2025 – The year ahead
Salaries
We have undertaken our annual review of the
Executive salaries and awarded an increase of
3.3% of salary to the CFO and an increase of
3.6% of salary to the COO, effective as of
1 January 2025. The salaries for the Chairman
and CEO will continue to be aligned to the
London Living Wage and they will receive
anincrease of 5.6%, just above the increase
announced by the London Living Wage
Foundation of 5.3%. In addition, the Chairman
and CEO will waive their rights to any variable
incentive award or pension contribution for
2025. Boththe Chairman and CEO are
significant shareholders in the Company
andexpressed a desire to align their future
remuneration with those of the
othershareholders.
2025 annual bonus
The 2025 annual bonus will operate on a
similar basis as last year and will continue to
include a set of ESG measures. The maximum
bonus opportunities will remain at 125% of
salary for both the CFO and COO, with half
ofany earned amount deferred in shares for
three years. Having reviewed the operation of
the cash modifier over the last few years the
Committee concluded that this should be
removed going forwards as an explicit financial
metric. Instead if there was a particularly good
or poor cash performance in any one year the
Committee would consider the use of
discretion to modify the overall bonus payout.
The ESG component of the 2025 bonus will
have two key elements. The first will continue
to measure overall employee engagement,
ensuring we maintain a connected and
motivated workforce. The second will assess
our diversity initiatives, focusing on Alfa’s
progress in improving diversity. This will
involve a comprehensive review of our efforts
to retain, engage, and develop diverse talent,
with performance evaluated based on the
overall progress achieved.
2025 LTIP
The 2025 LTIP award opportunity will remain at
150% of salary for the CFO and 100% of salary
for the COO. The Committee agreed that the
performance conditions for the 2025 LTIP
willcontinue to be based on EPS and TSR
measures, with an equal measure applied
toeach measure.
The Committee will continue to monitor
marketdevelopments throughout 2025 and
will consider how any emerging trends may
affectAlfa.
I will be happy to answer any questions you
may have at the upcoming AGM.
Adrian Chamberlain
Chair of the Remuneration Committee
12 March 2025
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
This section of the Directors’ Remuneration Report sets out the remuneration earned in 2024 and the proposed remuneration for 2025, and will be subject to an advisory vote at the 2025 AGM.
Thefollowing sections on pages 85 to 95 have been audited: Single total figure of remuneration, Long-Term Incentive Plan – awards vesting in the year, Pension entitlement, Payments for loss of office,
Payments topast Directors and Statement of Directors’ shareholdings and scheme interests.
Single total figure of remuneration
The audited table below sets out the aggregate emoluments earned by the Directors of the Company during 1 January 2024 to 31 December 2024 and for comparison, the amounts earned during the
period 1 January 2023 to 31 December 2023.
£’000s
Salary
andfees Benefits
1
Pension
3
Total fixed
remuneration
Annual
bonus
5
Long-term
incentives
Total
variable pay
Total figure
remuneration
2023 2024 2023
2
2024 2023 2024 2023 2024 2023 2024 2023
6
2024
7
2023 2024 2023 2024
Executive Directors
Andrew Page
4
25 27 1 1 – – 26 28 – – – – – – 26 28
Andrew Denton
4
25 27 3 3 – – 28 30 – – – – – – 28 30
Duncan Magrath 289 300 13 2 17 18 319 320 147 259 481 466 628 725 947 1,045
Matthew White 231 241 14 3 14 14 259 259 121 207 257 248 378 455 637 714
Non-Executive Directors
Steve Breach 65 65 – – – – 65 65 – – – – – – 65 65
Adrian Chamberlain 65 65 – – – – 65 65 – – – – – – 65 65
Charlotte deMetz 55 55 – – – – 55 55 – – – – – – 55 55
Reena Raichura
8
– 32 – – – – – 32 – – – – – – – 32
Chris Sullivan 65 65 – – – – 65 65 – – – – – – 65 65
1. Benefits for Executive Directors corresponds to the taxable value of benefits receivable during the relevant financial year and principally include life assurance, travel insurance and private medical insurance.
2. 2023 Benefits included car allowance for Duncan Magrath and Matthew White.
3. Pension – Andrew Page and Andrew Denton have opted out of the pension scheme. Duncan Magrath and Matthew White receive a cash payment in lieu of a pension contribution of 6% in line with the wider workforce.
4. Andrew Page and Andrew Denton salaries are set to align with the London living wage.
5. Annual bonus corresponds to the amount earned in respect of the relevant financial year. For the CFO and COO, the values disclosed in the table above include the gross value of the amount of bonus deferred into shares.
6. The value of the 2023 LTIP figure has been restated using the share price at the date of vesting.
7. The 2024 figure relates to 87% of the 2022 LTIP awards which will vest on 12 April 2025 following the achievement of the TSR and EPS targets for the three-year period ended 31 December 2024. The value of these awards has been calculated using the
three-month average share price to 31 December 2024 of 215.0p.
8. Reena Raichura joined the Board on 3 June 2024; her fees have been pro-rated accordingly.
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Annual report on remuneration 2024
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
All-employee workforce remuneration at Alfa
The Committee takes into consideration the reward, incentives and conditions available to colleagues when considering the remuneration of Executive Directors and senior management. Our
remuneration principles are consistent for all our employees. The key difference in our executive remuneration, compared to the approach to remuneration across our workforce, is that executive
remuneration is heavily weighted towards the achievement of the delivery of financial and strategic objectives, with elements deferred to support retention and aligned with share price performance.
Alfa’s approach to remuneration
Alfa’s approach to all-employee reward is focused on providing a competitive package to attract, retain and incentivise our employees to deliver for our customers and shareholders. Salaries for
Executive Directors, senior managers and the rest of the workforce are all determined with reference to the same factors such as technical expertise, experience and performance, and increases
across these populations are reviewed to ensure they are broadly aligned. The Committee also took an active role in determining rewards for the CLT. Further information on key initiatives for our
people and what makes Alfa unique can be found in the People section on page 26. In addition to a competitive salary, most employees have the opportunity to receive a discretionary profit share
scheme, private medical care, matched contribution pension and death-in-service life assurance. The CLT and certain employees are eligible to participate in long-term incentive schemes.
Salary Set considering market rates, roles, skills, experience and individual performance. Alfa continues to review salaries Company-wide to ensure that we remain
acompetitive employer within the local market.
Allowances and benefits Alfa provides a number of financial benefits and allowances, including travel insurance, life assurance, private medical insurance, smart working allowance and
Company loan scheme.
Pension Alfa offers employees access to a Self Invested Personal Pension, in which Alfa will match employee contributions up to 6% of salary.
Annual incentives Alfa operates a discretionary profit share bonus scheme which reflects the Alfa ethos that we are all striving towards the same goal and share in the profits of
theCompany.
Long-term incentives Senior grades participate in a long-term incentive arrangement, with performance shares, recognising the markets in which we compete for talent. At other levels,
awards are typically made in restricted shares only.
During the year, the Committee received reports from the Chief People Officer on pay and conditions across Alfa, and on the recruitment and retention experience. We took these into account when
determining executive remuneration. We have established channels in place to inform our colleagues and help them understand how executive remuneration and wider pay policies are aligned.
Further detail on Alfa’s approach to employee engagement is provided on page 46.
Context to remuneration decisions
The Committee’s decision-making takes into account a range of internal and external factors, including the Committee’s responsibility for reviewing remuneration and related policies foremployees,
and ensures that pay decisions are aligned across the Group. This ensures we take the reward, incentives and conditions available to colleagues into account when considering the remuneration of
Executive Directors and the CLT. The Directors have had regard to the matters set out in Section 172(1) of the Act when performing their duty to promote the success of the Company, while continuing
to deliver exceptional results for shareholders. In particular, the Committee was mindful that: (i) Alfa continued strong cash generation enabling the payment of two special dividends along with the
regular dividend to shareholders; (ii) performance targets are aligned to culture and do not drive the wrong behaviours. These initiatives enable the Committee to satisfy itself that the right steps have
been taken to ensure executive remuneration is appropriate.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Base salary
The Committee determined that the salary increase for the CFO, Duncan Magrath, and COO, Matthew White, for the period from 1 January 2024 would be 1.8%. The Chairman, Andrew Page, and CEO,
Andrew Denton, would receive an increase of 10%, which reflected the 2024 increase to the London Living Wage.
2024 Annual bonus
The 2024 annual bonus performance measures were selected to reflect the Company’s annual and long-term objectives and its financial and strategic priorities, as appropriate. Performance targets
are intended to be challenging, taking into account a range of reference points, including the Company’s budget and third party analyst forecasts, as well as the Group’s strategic priorities. Duncan
Magrath and Matthew White both participated in the 2024 annual bonus (which combines a cash award and conditional deferred shares award). The Executive Chairman and CEO have waived their
entitlement to a bonus for the 2024 performance year.
In respect of the annual bonus, the targets were weighted towards financial metrics, with 75% of the award measured on the revenue and operating profit of the Company. The outcome of this
element of the bonus can be decreased by a modifier based on the operating free cash flow conversion over a two year period, being cash flow generated from operations after deducting capital
expenditure as a percentage of operating profit EBIT. The ESG measures for the 2024 bonus consist of two individual elements, one assessing overall employee engagement and the other assessing
anumber of diversity initiatives, the achievement of which was evaluated on the overall progress at year end. The ESG measures have a combined weighting of 5% of total bonus opportunity.
Theremaining 20% is subject to achievement of individual personal objectives. Further details on performance outcomes for the non-financial measures are shown in the second table.
The following table sets out the targets, actual performance against these targets and, accordingly, the applicable pay-out for the 2024 annual bonus:
2024 Annual bonus outcome
Performance measure
Weighting (based
on 100% max)
Threshold
performance
50% Target
performance
required
Maximum
performance
required
Actual
performance
Annual bonus
value for threshold
and maximum
performance
(% of max)
Percentage of
maximum
performance
achieved
Duncan
Magrath
Matthew
White
Maximum opportunity (% salary) 125% 125%
Revenue 37.5% £106.4m £111.4m £114.0m £109.9m 0%-100% 34.6% 13.0% 13.0%
Operating profit 37.5% £30.0m £31.4m £33.3m £34.3m 0%-100% 100% 37.5% 37.5%
Cash flow conversion Modifier 90% 100% 100.8% 0.9-1.0 1.0 1.0 1.0
TOTAL financial 75.0% 67.2% 50.5% 50.5%
ESG measures
Employee engagement 2.5% 80% 82% 100% 2.5% 2.5%
Diversity initiatives 2.5% 0%-100% 80% 2.0% 2.0%
Personal performance 20.0% 0%-100% 14.0% 13.6%
TOTAL 100.0% 55.0% 69.0% 68.6%
Total payable (£) £258,686 £206,794
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Performance against non-financial measures
We introduced our first annual bonus ESG performance measures in 2023, which had a combined weighting of 5% of the total bonus opportunity. The 2024 ESG measures continued to assess
employee engagement, and the second measure was revised from employee retention to a number of diversity initiatives. These ESG measures continue to have a combined weighting of 5% of the
total bonus opportunity.
In 2024, our average engagement rate stood at 82%, exceeding the threshold of 80%. This accomplishment reflects our ongoing efforts to create a positive and fulfilling work environment, which
serves as a fundamental metric for our Company’s sustained success and stability. Together, these metrics highlight our commitment to maintaining a consistent and engaged workforce.
Diversity initiatives
The Committee considered the DEI measures, which demonstrated significant progress, evidenced by a range of focused metrics and initiatives. Retention rates for diverse groups have been closely
monitored and compared to Company-wide averages to ensure that any disparities are addressed through targeted future initiatives. Promotion data has been considered through a diversity lens to
identify areas where additional support or opportunities may be required. Additionally, the Company’s diversity landscape and engagement levels have been mapped across all business areas, which
has provided a comprehensive view of representation and will shape future initiatives. Efforts to attract top talent remain robust, with a strong focus on securing a sustainable talent pipeline that
reflects the Company’s commitment to diversity. Key initiatives have included launching a mentoring programme to support career growth and tailored resources to advance female employees’
professional development, fostering an inclusive environment that empowers all employees to thrive.
The Committee considered a performance assessment for the CFO and COO, showing the extent of their achievement against the individual personal strategic and operational measures agreed by
the Committee. As with the financial elements of the annual bonus, the Committee was satisfied with the scale of Executive Directors’ achievements this year. The personal measures described above
are assessed with reference to the following objectives:
Objective Commentary on performance achieved
Duncan Magrath Finance processes and
structure
• Made improvements in speed and accuracy of reporting and strengthened the team
Investor relations • Focused on explaining the impact of moving to a SaaS business
• Improved the understanding of key technological decisions and functionality of Alfa Systems, through different media
• Used presentation platform to start increasing visibility to retail investors
ESG • Improved the quality of emissions reporting and signed up to UNGC
Achievement 70%
Matthew White Fit for future growth • Developed of our Alfa Start product for US Auto
• Extended our Smart Hub strategy
• Focused on defining our culture to ensure continued attraction and retention as we expand globally
Focus on quality • Improved performance testing environment tooling and performance test ownership within our Engineering team
• Improved automated testing, improving confidence and reducing cost
Alfa Development Model • Completed the launch of our agile development model for our customers
Achievement 68%
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Performance against annual bonus targets
Based on the achievements listed above, the Committee agreed that the final vesting under the 2024 bonus would be 69.0% of the maximum for Duncan Magrath and 68.6% of the maximum for
Matthew White. In confirming this outcome, the Committee took into consideration the broader financial and operational performance of Alfa during the year, and the strong and effective leadership
demonstrated by the Executive Directors. It was determined that no adjustments were required to the formulaic outcome. In accordance with the Remuneration Policy, 50% of these bonus amounts
will be paid in cash, with the remaining 50%, after deduction of tax, to be deferred into an award of Alfa shares with a minimum holding period of three years.
Executive Base salary
Maximum
opportunity
(% salary)
Financial
measures
(% of maximum)
ESG
measures
(% of maximum)
Personal
performance
(% of maximum)
Performance
outcome
(% of maximum)
Bonus
outcome
Duncan Magrath £300,100 125% 50.5% 4.5% 14.0% 69.0% £258,686
Matthew White £241,300 125% 50.5% 4.5% 13.6% 68.6% £206,794
Long-Term Incentive Plan – awards vesting in the year
Awards granted to Executive Directors in April 2022 were subject to EPS growth and relative TSR performance over a three-year period ended 31 December 2024.
The EPS targets (applying to 50% of each award) required EPS for the year ending 31 December 2024 of 7.4 pence for 25% of that element to vest, rising to full vesting if EPS for the year ending
31 December 2024 was 9.2 pence or higher. The Group’s 2024 EPS outturn of 8.56 pence warrants 74% vesting of this element of the award.
The TSR element (applying to 50% of each award) required the Group’s three-year TSR performance to rank at median against the constituents of the FTSE small cap index (excluding investment trusts
and the Company) for 25% of that element to vest, rising to full vesting if Alfa’s TSR ranked at or above the upper quartile against the comparator group. Alfa’s TSR over the period was 28.4%, which
was at the 80th percentile versus the comparator group. This outcome warrants 100% vesting of this element of the award.
The Committee determined, after careful consideration of business performance and the interests of Alfa’s stakeholders including shareholders, customers and employees, that the formulaic
outcome was appropriate. Consequently, 87% of the total award will vest.
Awards are scheduled to vest on 12 April 2025, and both Executive Directors’ awards will be subject to a two-year holding period, after deduction of tax with a release date of 12 April 2027. Details of
the awards to Executive Directors are set out in the table below:
No. of
shares
granted
Proportion of
award vesting
(% maximum)
No. of
shares
vesting
Value attributable
to share price
growth
1
Face value
of shares
vesting
2
Duncan Magrath 250,151 87% 217, 631 £106,639 £465,731
Matthew White 133,414 87% 116,070 £56,874 £248,390
1. The value of the award which is attributable to share price growth. Based on the share price at grant of 165.0 pence.
2. The amounts shown are indicative vesting values based on the average share price for the three-month period to 31 December 2024 of 214.0 pence.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Long-Term Incentive Plan – awards granted in the year
Share awards were made to the Executive Directors under the LTIP on 9 April 2024 equivalent to 150% of salary for the CFO and 100% of salary for the COO. The Executive Chairman and CEO have
waived their entitlement to participate in the 2024 LTIP.
Executive Date of award
Face value
(% of salary)
Number of
shares granted
Average share
price at grant (£) Award value
1
Vesting at threshold
(% of face value) Performance period
Duncan Magrath 9 April 2024 150% 261,411 1.722 £450,150 25% 1 January 2024 to 31 December 2026
Matthew White 9 April 2024 100% 140,127 1.722 £241,300 25% 1 January 2024 to 31December 2026
1. This represents the face value of the share awards.
The LTIP awards are subject to two equally weighted performance metrics:
Measure Description Weighting Threshold/target Maximum target
2024
Total shareholder return (TSR) Measured with reference to the FTSE small cap index excluding investment trusts and
theCompany
50% Median Upper quartile
Earnings per share (EPS) Measured with reference to EPS performance in the year ending December 2026 50% 9.2p 11.1p
Straight-line vesting occurs between threshold and maximum for both TSR and EPS elements of the award.
The three-year period over which performance will be measured begins on 1 January of the year the awards are granted and ends on 31 December of the third year. Any awards vesting for
performance will be subject to an additional two-year holding period, during which malus and clawback provisions will continue to apply.
Pension entitlement
The only element of remuneration that is pensionable is basic annual salary. A cash payment in lieu of pension contributions are payable to the CFO and COO, at a rate of 6% of salary as aligned with
the broader workforce.
External appointments
Executive Directors are allowed to accept one appointment outside the Company, with the prior approval of the Board. Any fees may be retained by the Director, although this is at the discretion of
the Board. During 2024 and up to the date of this report, none of the Executive Directors who held office during the year under review held external appointments for which they received a fee.
Payments for loss of office
There were no payments for loss of office during the year or prior year.
Payments to past Directors
There were no payments to past Directors for loss of office during the year or prior year.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Fees for the Non-Executive Directors
The fees were agreed on appointment. The Board reviewed the rates of pay for Non-Executive Directors over the year to ensure they remain aligned with market levels. A summary of 2024 fees is
shown below:
£’000s Basic fee Audit and Risk Chair Remuneration Chair Senior Independent Director
Steve Breach 55 10 – –
Adrian Chamberlain 55 – 10 –
Charlotte de Metz 55 – – –
Reena Raichura 55 – – –
Chris Sullivan – – – 65
There is no additional fee payable to the Chair of the Nomination Committee.
Percentage change in Executive and Non-Executive Director remuneration
The table below shows the percentage increase/decrease in each Director’s salary/fees, taxable benefits and annual bonus between 2020 and 2024 compared with the average percentage increase in
each of those components of pay for the UK-based employees of the Group as a whole.
Disclosure for all Directors in addition to the CEO has been added in 2020 in line with the requirements under the EU Shareholder Rights Directive II. Alfa Financial Software Holdings PLC employs only
the Directors and therefore a subset of the Group’s employees has been used.
Base salary/fees Taxable benefits Bonus
Name 2020 2021 2022 2023
Change
2024 2020 2021 2022 2023
Change
2024 2020 2021 2022 2023
Change
2024
Average Employee 9% 5% 9% 8% 8% 13% 7% 8% 2% 0% n/a n/a n/a n/a n/a
Executive Directors
Andrew Page 0% (8)% (93)% 8% 10% (7)% (8)% (58)% (71)% (1)% n/a n/a n/a n/a n/a
Andrew Denton 0% (8)% (92)% 8% 10% (6)% (12)% (69)% (30)% (6)% n/a n/a n/a n/a n/a
Duncan Magrath
1
0% 0% 0% 5% 1.8% 0% 0% 0% 0% (82)% n/a 12% (16)% (44)% 77%
Matthew White
2
0% 0% 0% 5% 1.8% 0% 0% 0% 0% (79)% n/a 16% (17)% (30)% 72%
Non-Executive Directors
Steve Breach 0% 0% 0% 0% 0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Adrian Chamberlain 0% 0% 0% 0% 0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Charlotte de Metz 0% 0% 0% 0% 0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Reena Raichura – – – – 0% – – – – n/a – – – – n/a
Chris Sullivan 0% 0% 0% 0% 0% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
1. Duncan Magrath joined the Board in March 2020; the first year he received a bonus was in April 2021, in relation to the 2020 financial year.
2. Matthew White joined the Board in October 2019; the first year he received a bonus was in April 2021, in relation to the 2020 financial year.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Director contracts
Details of the Executive Directors’ service contracts and the Non-Executive Directors’ letters of appointment are set out below. All Directors’ service contracts and letters of appointment are available
for inspection at the Company’s registered office and at the AGM up until the start of the meeting.
Date of appointment
Steve Breach 9 August 2019
Adrian Chamberlain 24 April 2020
Charlotte de Metz 24 April 2020
Andrew Denton 6 April 2017
Duncan Magrath 24 April 2020
Andrew Page 4 May 2017
Reena Raichura 3 June 2024
Chris Sullivan 18 July 2019
Matthew White 9 October 2019
Executive Directors‘ contracts operate on a six or 12-month rolling notice basis. Non-Executive Directors’ contracts are for fixed periods of three years, which may be renewed for up to a maximum
ofnine years in total.
Dilution
Awards under Alfa incentive plans may be satisfied by treasury shares, shares held by the Employee Benefit Trust, the issue of new shares or the purchase of shares in the market. Under Investment
Association guidelines, the issue of new shares or reissue of treasury shares under a plan, when aggregated with awards under all of a company’s other schemes, must not exceed 10% of the issued
ordinary share capital (adjusted for share issuance and cancellation) in any rolling 10-year period. As at 31 December 2024, no new shares, or reissue of treasury shares had been used to satisfy
awards, and so this limit had not been exceeded.
All-employee share plans
The Company proposes to issue a new Sharesave Scheme each year and all Executive Directors will be entitled to participate on the same basis as all other employees.
Relative importance of spend on pay
The table below illustrates Alfa’s returns to shareholders by way of dividends and share buy-backs in relation to spend on pay for all employees for the period and last financial year.
2024 2023 Change
Total personnel costs (£m) (note 7 to the consolidated financial statements) 53.4 52.2 2.3%
Average number of employees (note 7 to the consolidated financial statements) 485 463 4.6%
Returns to shareholders (£m) (see note 31 for total dividends) 22.1 19.7 12.2%
Returns to shareholders (£m) (see note 28 for value of shares purchased during the year) 0.7 4.8 (85.4%)
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Total shareholder return (for the period from 25 May 2017 to 31 December 2024)
The graph below shows Alfa’s TSR performance from Admission in May 2017 to 31 December 2024 against the TSR performance of the FTSE small cap index (excluding investment trusts).
Thesecondgraph shows the rebased TSR performance from 1 January 2022 to 31 December 2024. The graphs show the total shareholder return generated by both the movement in share value
andthe reinvestment over the same period of dividend income. As Alfa was a constituent member of the FTSE small cap index for the majority of this period, the Committee considers that it is the
appropriate index for comparative purposes. These graphs have been calculated in accordance with the Directors’ Remuneration Reporting Regulations.
Total Shareholder Return (for the period from 25 May 2017 to 31 December 2024) Total Shareholder Return (for the period from 1 January 2022 to 31 December 2024)
Value (£) (rebased)
£175
£150
£100
£75
£50
£25
£0
May-17 Dec-17
Alfa Financial Software Holdings PLC FTSE Small Capitalisation Index Ex Investment Trusts
Dec-23 Dec-24Dec-22Dec-21Dec-20Dec-19Dec-18
Value (£) (rebased)
£150
£100
£75
£50
£25
£0
Dec-21 Dec-22
Alfa Financial Software Holdings PLC FTSE Small Capitalisation Index Ex Investment Trusts
Dec-23 Dec-24
Total CEO single figure of remuneration and variable pay outcome
The table below shows the CEO single figure of total remuneration during financial years from 2017 to 2024.
CEO single figure of remuneration
Annual bonus pay-out
(as a % of maximum opportunity)
1
LTIP vesting
(as a % of maximum opportunity)
2
2024 £29,996 n/a n/a
2023 £27,814 n/a n/a
2022 £26,998 n/a n/a
2021
3
£310,236 n/a n/a
2020 £337,174 n/a n/a
2019 £338,129 n/a n/a
2018 £337,944 n/a n/a
2017 £349,478 n/a n/a
1. The CEO waived any eligibility for a bonus from 2017 to 2024.
2. The CEO waived any eligibility to participate in the long-term incentive awards in respect of the 2017 to 2024 performance years.
3. The CEO agreed to a reduction in salary effective 1 December 2021.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
CEO pay ratio
The table below sets out the pay ratios for the CEO in relation to the equivalent pay for the lower quartile, median and upper quartile (calculated on a full-time equivalent basis) of the UK employee
population. The ratios have been calculated in accordance with the Companies (Miscellaneous Reporting) Requirements 2018. The CEO pay ratio data will be built upon annually until a rolling 10-year
dataset is produced. The methodology adopted for calculating the ratio was ‘Option A’ which entailed calculating the total full-time equivalent (FTE) pay and benefits for all UK employees on the 2024
payroll. Employees were then ranked based on their FTE remuneration from low to high in order to identify those whose remuneration placed them at the 25th, 50th (median) and 75th percentile
points. The CEO’s single total figure of remuneration (STFR) was then measured against these percentiles, to produce the three pay ratios. Option A was chosen because it was deemed to be the most
statistically accurate method for this reporting purpose. The Company carries out annual salary reviews and annual reviews of benefits packages. Salary awards are made with reference to the
outputs of annual industry benchmarking exercises. As per guidance, data relating to employees who left part way through the year and/or employees on secondment were excluded from the data
set and analysis.
Pay ratio table
Year Method
25th percentile
(lower quartile)
50th percentile
(median)
75th percentile
(upper quartile)
2024 A 0.5:1 0.3:1 0.3:1
2023 A 0.5:1 0.3:1 0.2:1
2022 A 0.6:1 0.4:1 0.3:1
2021 A 6.1:1 4.0:1 3.2:1
2020 A 5.7:1 4.3:1 3.2:1
2019 A 5.7:1 4.4:1 3.2:1
Year £’000s
25th
percentile
50th
percentile
75th
percentile
2024 Total remuneration 64.7 96.5 119.3
Salary only 58.4 88.9 104.3
2023 Total remuneration 58.8 88.2 118.2
Salary only 52.0 80.3 100.7
2022 Total remuneration 51.4 78.2 108.4
Salary only 47.2 70.0 91.5
2021 Total remuneration 50.9 77.1 96.7
Salary only 46.8 72.2 86.2
2020 Total remuneration 59.5 78.5 106.7
Salary only 55.1 73.2 98.1
2019 Total remuneration 59.0 76.2 106.3
Salary only 57.1 71.2 95.7
This is the sixth financial year in which the Company has reported information on ratios between CEO and average staff pay under the amendments to the Companies (Miscellaneous Reporting)
Regulations in 2018. There has been a significant decrease in the pay ratio due to the fact that the CEO agreed to reduce salary to the minimum level in December 2021. As a result, the CEO’s STFR is
lowerin 2022, 2023 and 2024 than in previous years. In addition, the CEO has waived his right to any bonuses of LTIPs; the value of any employee equivalents has been excluded from the employee
remuneration figures used. The Total remuneration includes benefits receivable during the relevant financial year and principally includes life assurance, travel insurance and private medical insurance.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Statement of Directors’ shareholdings and scheme interests
Executive Directors are expected to build and hold Alfa shares of at least 200% of their annual salary to align with the long-term interests of shareholders, with a requirement to retain 50% of any
share awards vesting until the 200% requirement is met.
Under the Directors’ Remuneration Policy, Executive Directors are required to maintain a minimum shareholding of 200% of salary (or actual shareholding if lower) for two years post-employment.
There are no share ownership requirements for the Non-Executive Directors. Shareholding requirements and the number of shares held by Directors during the year and as at 31 December 2024
areset out in the table below:
Shares owned
outright at
31December
2023
Sharesave
without
conditions
2
Interests in share
incentive schemes
which are
performance-tested
but unvested
3
Interests in share
incentive schemes
with performance
conditions
Shares owned
outright at
31December
2024
Shareholding
requirement (% of
requirement
achieved)
1
Andrew Page 166,635,559 – – – 153,769,534 achieved
Andrew Denton 9,280,589 – – – 7,695,747 achieved
Matthew White 1,083,261 11,718 116,070 311,238 351,301 achieved
Duncan Magrath 674,992 11,718 217,631 582,244 844,012 achieved
Chris Sullivan 317,649 – – – 251,317 n/a
Steve Breach 43,983 – – – 43,983 n/a
Adrian Chamberlain 14,380 – – – 14,380 n/a
Charlotte de Metz – – – – – n/a
Reena Raichura n/a – – – – n/a
1. Calculated using the share price of 215.0 pence (the three-month average to 31 December 2024).
2. Duncan Magrath and Matthew White elected to join the Company Sharesave share scheme for which an option to acquire 11,718 ordinary shares at an option exercise price of 153.6 pence per ordinary share was granted on 30 November 2021. Subject to
certain conditions being satisfied, the entitlement to exercise the Sharesave option arises during the period 1 January 2025 to 30 June 2025. On 2 January 2025, Duncan Magrath and Matthew White exercised their share options under the Alfa Financial
Software Holdings PLC 2021 Sharesave Plan. Both Directors elected to retain their shares and informed the Company that they had transferred to their respective spouse for nil consideration. Duncan Magrath and Matthew White remain the beneficial
owners of the shares.
3. The 2022 LTIP awards (which vest based on performance to 31 December 2024) will vest on the third anniversary of grant on 12 April 2025.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Duncan Magrath, CFO (£000)
49%27%24%
39%32%29%
18%30%
52%
£1,381
£1,156
£631
100%
£331Fixed pay
Target
Maximum
Maximum + 50%
share price growth
Andrew Page, Chairman (£000)
100%
100%
100%
£30
£30
£30
100%
£30
Maximum + 50%
share price growth
Maximum
Target
Fixed pay
Andrew Denton, CEO (£000)
100%
100%
100%
£32
£32
£32
100%
£32
Maximum + 50%
share price growth
Maximum
Target
Fixed pay
Matthew White, COO (£000)
13%
£931
£810
£478
£267
39%32%29%
30%37%33%
31%56%
100%
Maximum
Target
Fixed pay
Maximum + 50%
share price growth
Illustrations of potential remuneration outcomes 2025
The following charts illustrate the remuneration that could be received by each of the executive Directors for varying levels of performance in 2025. The charts are based on the following assumptions:
Pay scenario Purpose and link to strategy
Maximum + 50% share price growth Assumes 100% pay-out under the annual bonus
Assumes 100% pay-out under the LTIP plus 50% share price growth
Maximum Assumes 100% pay-out under the annual bonus
Assumes 100% pay-out under the LTIP
On-target Assumes 50% pay-out under the annual bonus
Assumes 25% pay-out under the LTIP (aligned with threshold performance)
Minimum Fixed elements of remuneration only – base salary, pension and benefits
2025 single figure outcomes
Fixed Bonus LTIP
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Implementation of the Remuneration Policy 2025
2025 Executive Directors’ base salary
The Executive Directors’ salaries were reviewed in December 2024. The Chair, Andrew Page, and CEO, Andrew Denton, indicated that they would continue to receive the legal minimum salary
requirement, as they are significant shareholders in the Company and want to align their future remuneration with those of the other shareholders. In October 2024, the Living Wage Foundation
announced that the London Living Wage would increase by 5.3% for 2025, equating to an annual salary of £28,816 for a 40 hour week. The Committee reviewed this and determined that the salary
forthe Chair and CEO, would be rounded up to £28,900, which would equate to a 5.6% increase.
The Committee carried out a review of the CFO‘s and COO’s remuneration packages in December 2024 and determined that there would be a base salary increase of 3.3% and 3.6% respectively.
The table below shows the salaries for the Executive Directors as at 1 January 2025 and the salary increase in comparison to base salary at 1 January 2024:
1 January 2024 1 January 2025 Salary % increase
Andrew Page £27,360 £28,900 5.6%
Andrew Denton £27,360 £28,900 5.6%
Duncan Magrath £300,100 £310,000 3.3%
Matthew White £241,300 £250,000 3.6%
2025 Annual bonus
The Chairman and CEO have elected to waive their bonus opportunity. The CFO and COO will be entitled to a maximum annual bonus of 125% of salary for 2025. The following measures have been
selected for the 2025 annual bonus performance year:
Measure Weighting
Operating profit 37.5%
Revenue 37.5%
Personal performance 20%
ESG 5%
The Committee determined that the existing annual bonus measures of revenue, operating profit, ESG measures and personal objectives continue to be appropriate for the business.
Each bonus measure has a target. Failure to meet a minimum percentage of the revenue and operating profit target will result in no bonus being awarded for that element. Achieving maximum target
of operating profit and revenue target will result in the maximum bonus being awarded under the formula (subject to the minimum operating profit target being achieved). The ESG measure consists
oftwo individual elements, one will assess the overall employee engagement, and the second will assess a number of diversity initiatives, the achievement of which will be evaluated on the overall
progress at the end of the year. The ESG measure will have a combined weighting of 5% of total bonus opportunity. Having reviewed the operation of the cash modifier over the last few years the
Committee concluded that this should be removed going forwards as an explicit financial metric. Instead if there was a particularly good or poor cash performance in any one year the Committee
would consider the use of discretion to modify the overall bonus payout.
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As described earlier, the final determination is made by the Committee taking all available factors into account. The detailed bonus targets for the coming year are considered to be commercially
sensitive. However, the Committee will provide an appropriate explanation of the bonus outcomes in the 2025 Directors’ Remuneration Report. In accordance with the Policy, 50% of any bonus earned
will be deferred into shares for a three-year holding period.
2025 Long-Term Incentive Plan
The award opportunity will remain at 150% of salary for the CFO and 100% of salary for the COO. Following vesting, awards will be subject to a subsequent holding period of two years, with the
entirety of any award vesting released after two years. For 2025, the Executive Chair and CEO have elected to waive their LTIP opportunity. The maximum LTIP opportunity under the Policy is 150%
ofsalary.
The Committee has agreed TSR and EPS measures for the LTIP, with an equal weighting applied to each measure. EPS targets have been calculated based on growth targets from previous year’s
actualEPS.
The Committee decided that following the Company’s promotion to the FTSE 250, the TSR element for the 2025 LTIP would be assessed based on the constituents of the FTSE 250 index comparator
group, excluding investment trusts rather than the FTSE Small cap. This ensures that performance comparisons are made against a more relevant peer group reflecting the Company’s growth and
increased market position. Median performance over the three-year performance period will result in 25% vesting, with 100% vesting if upper quartile performance is achieved. In each case, threshold
vesting will be 25% of the maximum. Straight-line vesting occurs between threshold and maximum for both TSR and EPS elements of the award.
Measure Description Weighting Threshold/target Maximum target
2025
Total shareholder return (TSR) Measured with reference to the FTSE 250 Cap index excluding investment trusts and
theCompany
50% Median Upper quartile
Earnings per share (EPS) Measured with reference to EPS performance in the year ending 31 December 2027 50% 9.91 pence 11.71 pence
Pension and benefits
For 2025, the CFO and COO, in lieu of a pension contribution, will receive a cash allowance of 6% of salary in line with the pension contribution available to the wider workforce. There are no further
changes proposed to the benefits provided.
2025 Non-Executive Director remuneration
Non-Executive Directors do not participate in any of the Company’s share incentive arrangements, nor do they receive any benefits. Fees for Non-Executive Directors are reviewed annually and are
set by the Chair and the Executive Directors. Following the annual review of Non-Executive Director fees, no changes are proposed for the 2025 fees. It was determined that the fees will remain at the
following level:
Base fee £55,000
Additional fee for chairing Audit and Risk Committee or Remuneration Committee (subject to maximum fees of £65,000) £10,000
Fee for the Senior Independent Director (including chairing Committees) £65,000
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Remuneration Committee membership
All current members of the Committee are deemed to be independent. Accordingly, the Committee continues to comply with the independence requirements set out in the Code. During 2024, there
were three formal meetings of the Remuneration Committee. The attendance is noted at the beginning of the Remuneration Committee Report. The responsibilities of the Committee are set out in
the Corporate governance section on pages 51 to 109.
The Executive Directors and the CPO may be invited to attend meetings to assist the Committee in its deliberations, as appropriate. No person is present during any discussion relating to their own
remuneration or is involved in deciding their own remuneration.
Remuneration consultant
During the year, the Remuneration Committee and the Company retained an independent external advisor to assist on various aspects of the Company’s remuneration and share schemes. The
Company has continued to retain the services of Ellason LLP as external advisors to the Committee for executive remuneration advice and updates on market practice. Ellason’s fees for 2024 were
£16,680 (2023: £19,845). Ellason does not provide any other services to the Group or any of the Directors, and the Committee is satisfied that it remains independent. Ellason is a member and
signatory to the Remuneration Consultants Group’s Code of Conduct, which requires that its advice be objective and impartial, and does not have any other connection with the Company or its
Executive Directors.
Statement of shareholding voting
The 2023 Directors’ Remuneration Report was approved by shareholders at the 2024 AGM. The Directors’ Remuneration Policy was approved by shareholders at the 2024 AGM. The votes cast were
asfollows:
For Against Votes withheld
Directors’ Remuneration Report (FY2023) 99.98% 0.02% 0
Directors’ Remuneration Policy 99.98% 0.02% 0
As ever, the Committee welcomes any enquiries or feedback shareholders may have on the Policy or any aspect of the work of the Committee.
Adrian Chamberlain
Chair, Remuneration Committee
12 March 2025
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Introduction
The Alfa Directors’ Remuneration Policy (the ‘Policy’) was approved with over 99% of shareholders’ support at the AGM held on 1 May 2024. It is intended that the Policy will apply for a period of up to
three years and will need to be re-approved at the 2027 AGM at the latest. The full Policy was published in the 2023 Annual Report.
Fixed elements of remuneration for Executive Directors
Salary
Purpose and link tostrategy
To attract, retain and motivate Executive Directors of the calibre required to deliver the Company’s strategy and drive business performance.
Operation
Base salaries will be reviewed at least annually, and assessed, taking into account the scope and requirements of the role, experience of the incumbent and the total
remuneration package. Any increases will typically be effective from 1January.
Account will also be taken of the performance of the business, the salary increases awarded to the wider employee population, and remuneration arrangements in
other listed companies of comparable scale andsector.
Maximum opportunity
There is no overall maximum for, or increase to, salary levels. Any increase in Executive Director salaries will generally beno higher inpercentage terms than that for
the broader employee population. Inappropriate circumstances, the Committee may award increases outside thisrange.
These may include:
• A change in role and/or responsibilities;
• Performance and/or development in the role of the Executive Director; and
• A significant change in theCompany’s size, composition and/or complexity.
In addition, where an Executive Director has been appointed to the Board at a starting salary which is lower than the typical market rate, larger increases may
beawarded as their experience develops, ifthe Committee considers such increases to be appropriate.
Performance
Personal performance will be taken into consideration when determining any salary increases.
Benefits
Purpose and link tostrategy
To provide market competitive benefits which help to recruit and retain high-calibre Executive Directors.
Operation
The Committee’s policy is to provide Executive Directors with competitive levels of benefits, taking into consideration thebenefits provided to Alfa’s employees and
those offered by its peers. Benefits are in line with those for the broader workforce and currently include (but are not limited to) private medical insurance for
individual and family, (if applicable); anddeath-in service life assurance. The Company may award additional benefits where the Committee considers it appropriate
(e.g. travel, accommodation and subsistence allowances). These may include national and international relocation benefits such as (but not limited to)
accommodation, family relocation support and travel in line with our policyfor other employees in similar situations.
Maximum opportunity
Given that the cost of benefits depends on the Executive Director’s individual circumstances, there is no prescribed maximum monetary value.
The cost of the benefits provision will be reviewed by the Committee on a periodic basis to ensure it remains appropriate.
Other payments such as legal fees or outplacement costs may be paid if it is considered appropriate.
Performance
There are no performance conditions.
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Directors’ Remuneration Policy – a summary
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Pension
Purpose and link tostrategy
To encourage and assist with responsible, secure retirement provisions, thereby facilitating the recruitment of high-calibre Executive Directors to deliver the
Company’s strategy.
Operation
May be provided by way of contribution into a Company pension scheme or a cash supplement in lieu of pension contributions into this scheme (or such other
arrangement the Committee determines has the same economic effect).
Maximum opportunity
The maximum Company contribution for Executive Directors will not exceed the contribution (as a percentage of salary) available to the broader employee
population (currently 6% of salary).
Performance
There are no performance conditions.
Variable elements of remuneration for Executive Directors
Annual bonus and Deferred Bonus Share Plan (DBSP)
Purpose and link tostrategy
Incentivises and rewards the achievement of annual financial and non-financial objectives integral to the Company’sstrategy.
The part deferral of earned bonus into shares provides alignment with shareholders’ long-term interests.
Operation
The Committee will set the performance measures, their weighting and targets annually to reflect the key financial and non-financial priorities forthe business in the
relevant year.
Annual bonus outcomes will be determined by the Committee, and the Committee may use its discretion at the end of theperformance period to adjust the final
bonus outcome if it considers that the outcome does not reflect the underlying performance of the business during the year, or if it considers the payment is not
appropriate in the context of unforeseen, unexpected or exceptional circumstances.
Where exercised, the rationale for this discretion will be fully disclosed to shareholders in the relevant Annual Report.
Not less than 50% of any bonus will normally be satisfied by way of an award of shares under theDBSP.
Deferred shares will be subject to a three year holding period from the date of the award, but no further performance conditions will apply. Directors may sell
sufficient shares to satisfy the respective tax liability but must retain the net number of shares until theend of this three yearperiod.
Malus and clawback provisions will apply (see explanatory notes in full policy).
Maximum opportunity
The maximum bonus opportunity may be up to 150% of salary for the Executive Directors for each financial year. On-target performance will typically pay out up to
50% of the maximum opportunity.
Full details on the annual bonus for Executive Directors will be set out in the Annual Report on Remuneration in respect ofthe relevant year.
Performance
Performance measures will comprise a combination of financial and non-financial objectives, and the measures may vary from year to year. At least half of the annual
bonus will be based on financial measures. The non-financial performance measures may include acombination of strategic and/or personal objectives.
Further details on, and the rationale for, the measures used in the annual bonus will be disclosed in the relevant Annual Report (and the targets set will normally be
disclosed retrospectively, subject to these being considered not to be commercially sensitive).
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Long-Term Incentive Plan (LTIP)
Purpose and link tostrategy
Incentivises and rewards the achievement of the Company’s long-term strategic objectives for the business, through the use of share-based awards. Encourages
long-term shareholdings to retain Executive Directors and provide alignment with shareholders’ interests.
Operation
Awards granted under the LTIP vest subject to the achievement of applicable performance conditions measured over at least athree-year period. LTIPs may be made
as conditional share awards or in other forms (e.g. nil cost options) if it is considered appropriate.
The Committee may use its discretion at the end of the performance period to adjust the final vesting outcomes if it considers that the formulaic outcome does not
reflect the underlying performance of thebusiness during the performance period, or if it considers the payment is not appropriate in the context of unforeseen,
unexpected or exceptional circumstances. Where exercised, the rationale for this discretion will be fully disclosed to shareholders in therelevant Annual Report.
Awards that vest are subject toa further two-year holding period after the vesting date. Directors may sell sufficient shares to satisfy the respective tax liability but
must retain the net number of shares until the end of this two-year period.
The Committee retains the discretion to allow dividends to accrue over the vesting period in respect of any awards that vest (see explanatory notes in full policy).
Maximum opportunity
The maximum value of shares (at grant) which can be made under an award to an individual in respect of afinancial year is 150% of salary.
Performance
Performance measures willbe determined by the Committee at the time of making each award to ensure alignment with the long-term success of the business.
The performance conditions may include, but are not limited to, market measures, financial measures and strategic long-term objectives.
For performance between threshold and maximum, awards vest on a straight-line basis. 100% of an award will vest for maximum performance and typically 25% will
vest at threshold.
All-employee share plans
Purpose and link tostrategy
All-employee share plans are designed to encourage share ownership across the wider workforce.
Operation
Executive Directors are eligibleto participate in any all-employee share plan, onidentical terms to other participants. Inthe case ofUK tax qualifying plans, these will
be operated in line with HMRC guidance.
Maximum opportunity
Participation in any approved all-employee share plans will be subject to the same limits as for other eligible employees and, in the case of any UK tax qualifying plan,
willbe subject to the maximum limits permitted by the relevant tax legislation.
Performance
The Committee may apply conditions to participation in all-employee share plans, which will apply to allemployees.
Shareholding requirement
Purpose and link tostrategy
To drive long-term, sustainable decision-making for the benefit of the Company and our shareholders.
Operation
The Executive Directors arerequired to build up a shareholding equivalent to 200% of salary to align with thelong-term interests of shareholders. Until the
requirement is met, 50% of anyshare awards vesting (after any sales to cover tax liabilities) should be retained.
Maximum opportunity
Executive Directors are required to hold shares equivalent to 200% of their salary in value.
Post-employment, Executive Directors will normally be expected tomaintain a minimum shareholding of 200% of salary(oractual shareholding if lower) for two
years. The Committee retains discretion to waive this guideline if itisnotconsidered to be appropriate in the specificcircumstance.
Performance
There are no performance conditions.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Non-Executive Director remuneration
Fees paid to the Non-Executive Directors
Purpose and link tostrategy
Fees are set at a level to reflect the amount of time and level of involvement required in order to carry out duties as members of the Board and its Committees, and
to attract and retain Non-Executive Directors of the highest calibre withrelevant commercial and other experience.
Operation
Fees for Non-Executive Directors will be determined by the Chairman and the Executive Directors.
Additional fees are payable for acting as Senior Independent Director, Committee Chairs, or for undertaking other duties. Fee levels will be reviewed (though not
necessarily increased) annually and set with reference to the time commitment and responsibility of the position as well as taking into consideration market data for
roles in other companies of a similar size and complexity.
Benefits appropriate to the rolemay be provided. The Non-Executive Directors will have the benefit of a qualifying third party indemnity from the Company and
appropriate Directors’ and Officers’ liabilityinsurance. Travel and reasonable expenses incurred (including any tax gross-up) in the course of performing their duties
may be paid by the Company orreimbursed.
Maximum opportunity
Details of the current feelevels for the Non-Executive Directors are set out in the Annual Report on Remuneration. There isno prescribed maximum annual increase.
Total fees will notexceed the maximum amount provided in the Company’s Articles of Association.
Performance
There are no performance conditions.
Discretion, malus and clawback
Our incentive plans provide the Committee with discretion in
respect of vesting outcomes that affect the actual level of reward
payable to individuals. Such discretion would only be used in
exceptional circumstances and, if exercised, the rationale for this
discretion will be fully disclosed to shareholders in the relevant
Annual Report. Variable pay awards may be subject to adjustment
events. At the discretion of the Committee, an award may be
adjusted before delivery (malus) or reclaimed after delivery
(clawback) if an adjustment event occurs. Malus will apply to
awards under the DBSP and the LTIP.
The Committee has the discretion to invoke these provisions in the following circumstances:
• Where there is a material misstatement of any Company financial results;
• Where an error in assessing performance conditions is discovered;
• Where there is misconduct on the part of the individual; and
• Where a material failure of risk management by the Company is identified, or in the event of serious reputational damage to
the Company.
The full Policy also includes further information on:
• Performance conditions
• Shareholding requirement
• Recruitment remuneration
• Service contracts and appointment letters
• Termination of office
• Change of control
• Shareholders’ views
• Employment conditions in the Company
• External appointments
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Alignment of Remuneration Policy with the 2018 UK Corporate Governance Code
Governance in practice
The Remuneration Committee is committed to good corporate governance and as such takes into account a broad range of factors when determining its Directors’ Remuneration Policy. The
Committee considered both legal and regulatory requirements, associated guidance, and the views of shareholders and their representative bodies. Below is an outline of how the Committee works
to ensure the principles of Provision 40 of the 2018 UK Corporate Governance Code are met.
Clarity
Remuneration arrangements should betransparent and
promote effective engagement with shareholders and
theworkforce.
Alfa is committed to clear and transparent reporting and communication with itsstakeholders. The Committee actively engages
with our shareholders on key decisions and Policy matters, when required.
The Alfa Remuneration Policy is aligned with longer-term shareholder interests andstructured to promote the Group’s financial and
strategic priorities.
Simplicity
Remuneration structures should avoid complexity, and their
rationale and operation should be easy to understand.
Alfa’s approach to its remuneration framework focuses on simplicity. The framework comprises three core elements
toremuneration:
Fixed pay. This element comprises base pay, taxable benefits and pension.
Short-term incentives. This element relates to an annual performance-related bonus which incentivises delivery against both
financial and non-financial measures. In total, 50% of any bonus earned is paid in cash with 50% deferred into shares.
Long-term incentives. This element relates to longer-term value creation through theLTIP.
Risk
Remuneration arrangements should ensure that reputational
and other risks from excessive rewards, and behavioural risks
that can arise from target-based incentives plans are identified
and mitigated.
The remuneration arrangements are split between short-term and long-term rewards coupled with holding periods, deferred
elements, and malus and clawback provisions to drive the right behaviours to incentivise the Executive Directors to deliver
long-term sustainability of the business and shareholder returns.
As a wider control, malus and clawback provisions apply to all participants of our long-term incentive plans. The Remuneration
Committee retains discretion to override formulaic outcomes where these are not considered reflective of underlying performance.
Predictability
The range of possible values of rewards to individual Directors
and any other limits or discretions should be identified and
explained at the time of approving the Policy.
The Remuneration Policy sets out scenario charts illustrating base pay, short-term incentives and longer-term incentive outcomes
under threshold, target and maximum performance scenarios.
Proportionality
The link between individual awards, thedelivery of strategy and
the long-term performance of the Company should be clear.
Outcomes should notreward poor performance.
The Committee assesses performance against a range of financial and non-financial measures linked to our business strategy.
The Committee has the ability to override formulaic calculations and apply discretion.
The Committee regularly reviews pay policies for the wider workforce and is mindful of this when setting remuneration for
Executive Directors.
Alignment to culture
Incentive schemes should drive behaviours consistent with
Company purpose, values and strategy.
When considering the alignment of incentive plans and culture the Committee considers that performance targets do not drive the
wrong behaviours. The Committee also retains discretion under the plan rules to override formulaic vesting outcomes and to
extend holding periods.
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Alignment of Remuneration Policy
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
The Directors of Alfa present their report and the audited financial statements for the year ended
31 December 2024. This report includes information required by the Companies Act 2006 and the
UK Financial Conduct Authority’s UK Listing Rules (UKLR) and forms part of the management
report as required by the Disclosure and Transparency (DTR) Rule 4. Additional information which
is incorporated by reference into this Directors’ report can be located by reference in the tables
below. As permitted by the Companies Act 2006, the Directors’ report includes the disclosures in
the Strategic report on:
Subject matter
Location in Annual Report
(page)
Performance and future development in the business affecting
theGroup since the financial year 1 to 50
Climate change emission reporting 29 to 33
Long-term Viability statement 49 to 50
Stakeholder engagement 46 to 48
Employee engagement 46
Directors who held office during the year 92
The Group is required to disclose certain information under UKLR 6.6 in the Directors’ report or
advise where such relevant information is contained. This information can be found in the
following sections of the Annual Report and Accounts:
Listing rule requirement
Location in Annual Report
(page)
Details of any long-term incentive schemes 89 to 90, 98
Details of waiver of Director emoluments and future emoluments 87, 90, 97 to 98
Shareholder waiver of dividends and future dividends 106
Details of any contract of significance
107Board statement in respect of the Relationship Agreement with the
controlling shareholder
Principal activities
The principal activity of the Alfa Group is the provision of software and software-related services
to the auto and equipment finance industry. Alfa is a public company limited by shares and is
incorporated and domiciled in England. Its shares are listed on the London Stock Exchange.
Theregistered office is Moor Place, 1 Fore Street Avenue, London, EC2Y 9DT, United Kingdom.
Alfa’s registration number is 10713517. The principal activity of the Company is that of a
holdingcompany.
The Company’s registrar is Equiniti Limited
situated at Aspect House, Spencer Road,
Lancing, West Sussex, BN99 6DA.
Directors’ interests
The Directors’ interests in and options over
ordinary shares in the Company are shown in
the Directors’ Remuneration Report on page
95. There has been no change in Directors’
interests from the end of the financial year
andto the date of this report.
In line with the requirements of the Companies
Act, each Director has notified the Company of
any situation in which they have, or could have,
a direct or indirect interest that conflicts, or
possibly may conflict, with the interests of the
Company (a situational conflict). These were
considered and approved by the Board in
accordance with the Articles and each Director
was informed of the authorisation and any
terms on which it was given. All Directors are
aware of the need to consult with the Company
Secretary should any possible situational
conflict arise, so that prior consideration can
be given by the Board as to whether or not
such conflict will be approved.
Corporate governance statement
The Company’s statement on corporate
governance can be found on page 53 of the
corporate governance report. The report
formspart of this Directors’ report and is
incorporated by cross-reference.
2025 Annual General Meeting
The Company’s AGM will be held on
Wednesday, 30 April 2025 at 3pm at Alfa’s
headoffice at Moor Place, 1 Fore Street
Avenue, London, EC2Y 9DT. The Notice of
Meeting setting out the resolutions to be
proposed atthe 2025 AGM, together with
explanatory notes, will be sent to shareholders
as a separate document and made available on
the Company’s website www.alfasystems.com/
en-eu/investors/shareholder-information.
Shareholders’ voting rights
All members who hold ordinary shares are
entitled to attend and vote at the AGM. On
ashow of hands at a general meeting, every
member present in person shall have one vote
and on a poll, every member present in person
or by proxy shall have one vote for every
ordinary share held. No shareholder holds
ordinary shares carrying special rights relating
to the control of the Company and the
Directors are not aware of any agreements
between holders of the Company’s shares that
may result in restrictions on voting rights.
Amendment of the Articles
The Articles may only be amended by a special
resolution of the Company’s shareholders in
ageneral meeting.
Financial risk management
The financial risk management objectives and
policies of the Group and the Company and the
exposure of the Group and the Company to
price risk, credit risk, liquidity risk and cash
flow risk are disclosed in note 3 to the
financialstatements.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Diversity data as at 31 December 2024
Our gender identity and ethnicity data is in accordance with UK Listing Rule 6.6.6(9) in the
formatset out in UKLR 22 Annex 1. Data is collected by self-disclosure directly from the
individualsconcerned.
Gender identity or sex
No. of Board
members
% of the
Board
No. of
senior
positions on
the Board
(CEO, CFO,
SID and
Chair) No. in CLT
1
% of CLT
Men 7 78% 4 3 75%
Women 2 22% – 1 25%
Not specified/prefer not tosay – – – –
1. The CLT composition data excludes the three Executive Directors who are part of the CLT.
Ethnic background
No. of Board
members
% of the
Board
No. of
senior
positions on
the Board
(CEO, CFO,
SID and
Chair) No. in CLT
1
% of CLT
White British or other
White(including minority-
whitegroups) 8 89% 4 4 100%
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British 1 11% – – –
Black/African/Caribbean/
BlackBritish – – – – –
Other ethnic group,
includingArab – – – – –
Not specified/prefer not tosay – – – – –
1. The CLT composition data excludes the three Executive Directors who are part of the CLT.
Internal controls
Further details of our internal control
framework can be found in the Audit and
RiskCommittee Report on page 80.
Profits and dividends
The consolidated profit after tax for the year
ended 31 December 2024 was £25.6m
(2023: £23.5m). The results are discussed
ingreater detail in the Financial review on
pages21 to 24. Information on dividends is
shown in note 31 of the financial statements
and is incorporated into this reportby
reference. Subject to approval at the AGM on
30 April 2025, a 2024 final dividend of 1.4 pence
per share will be paid on 27 June 2025 to
holders on the register on 30 May 2025. The
ordinary shares will be quoted ex-dividend on
29 May 2025.
In addition, the Board has decided to declare a
special dividend of 2.4 pence per share, with an
ex-dividend date of 1 May 2025, a record date of
2 May 2025 and a payment date of 30 May 2025.
This follows the payment of two special
dividends of 2.0 pence and 4.2 pence on 30 May
2024 and 8 November 2024 respectively.
Research and development
The Group continued to invest in product
research and development throughout the
year. The product is enhanced by both specific
customer-driven requirements, some of which
are paid for by customers, but also by internal
development using the skills and knowledge
from the Development teams but also using
feedback from the Implementation and
Markets and Products teams. Theamount
expensed in the profit and loss account for
research and development is shown in note 6
to the consolidated financial statements. In
addition, amounts are capitalised as Other
intangible assets, which are shown in note 15
to the consolidated financial statements.
Interest capitalised in the period
No interest has been capitalised by Alfa in
theyear ended 31 December 2024 or at
31 December 2023.
Directors’ insurance and indemnities
Each Director of the Company has the benefit
of a qualifying indemnity, as defined by section
236 of the Companies Act, and as permitted by
the Articles, as well as Directors’ and Officers’
liability insurance.
Shares held in the Employee
BenefitTrust
During the year, the trustees of the Employee
Benefit Trust, which operates in connection
with the Company’s share plans, waived its
rights to receive dividends on any shares held
by it. Details of the trust can be found in note
28 of the financial statements.
Share capital
The Company’s ordinary shares are listed on
the London Stock Exchange. The authorised
share capital of the Company as at
31 December 2024 was made up of 300,000,000
ordinary shares of 0.1 pence each, of which it
held 4,775,119 shares in Treasury. Further
information regarding the Company’s issued
share capital can be found in note 26 of the
Company financial statements on page 145.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Restrictions on transfer of
ordinaryshares
The Articles do not contain any restrictions on
the transfer of ordinary shares in the Company
other than the usual restrictions applicable
where any amount is unpaid on a share. All
issued share capital of the Company at the date
of this Annual Report is fully paid. Certain
restrictions are also imposed by laws and
regulations (such as insider trading and market
abuse requirements relating to close periods)
and requirements of the Listing Rules whereby
Directors and certain employees of the
Company require Board approval to deal in the
Company’s securities.
Disability
With regard to existing team members and
those who may become disabled, Alfa’s policy
is to examine ways and means to provide
continuing employment under the existing
terms and conditions and to provide training
and career development, including promotion,
where appropriate.
When considering recruitment, training, career
development, promotion or any other aspect
of employment, we strive to ensure that no
colleague or job applicant is discriminated
against, either directly or indirectly, on the
grounds of disability.
Authority to purchase own shares
Subject to authorisation by shareholder
resolution, the Company may purchase its own
shares in accordance with the Companies Act
2006. Any shares bought back may be held as
treasury shares or cancelled immediately on
completion of the purchase. At the 2024 AGM,
the Company was generally and
unconditionally authorised by its shareholders
to purchase in the market up to 10% of the
ordinary shares of the Company (29,522,488
ordinary shares). This authority is renewable
annually, and a special resolution will be
proposed at the 2025 AGM to request
shareholders to renew it.
Transactions with related parties
There is an existing material relationship with
the controlling shareholder, a related party,
which is governed by a Relationship
Agreement.
The relationship between the Company and
the controlling shareholder of the Company
(the ‘Controlling Shareholder‘), CHP Software
and Consulting Holdings Limited, is governed
by a Relationship Agreement (dated 26 May
2017, as amended by deeds of adherence dated
10 January 2024 and 15 January 2024).
Subject to a certain minimum shareholding,
the Relationship Agreement details the rights
the Controlling Shareholder has to
representation on the Board and Nomination
Committee and to appoint observers to the
Nomination Committee (if not represented on
the Committee). The Controlling Shareholder
also undertakes not to operate, establish, own
or acquire a competing business during the
terms of the agreement.
Any transactions between Alfa and the
Controlling Shareholder will be at arm’s
lengthand on normal commercial terms.
In accordance with the requirements of UKLR,
the Board confirms that the Company has
complied with its obligations under the
Relationship Agreement, including in respect of
the independence provisions and, so far as the
Company is aware, the Controlling Shareholder
has complied with the provisions of the
Relationship Agreement (including the
independence and non-compete provisions set
out therein), at all times since the Agreement
was entered into. Other related party
transactions are detailed in note 32.3 to the
consolidated financial statements.
There are no further transactions with
relatedparties.
Compensation for loss of office and
change of control
There are no agreements between the
Company and its Directors or Alfa team
members providing for additional
compensation for loss of office or employment
(whether through resignation, redundancy or
otherwise) that occurs because of a takeover
bid. The only significant agreement, to which
the Company is a party that takes effect, alters
or terminates upon a change of control of the
Company following a takeover bid, and the
effect thereof, is the Relationship Agreement.
The Relationship Agreement with the
Controlling Shareholder contains a provision
under which it will terminate upon the earlier
of: (i) the Controlling Shareholder and its
associates ceasing to have the entitlement to
exercise or control the exercise of 10% or more
of the voting rights in the Company; or (ii) the
Company’s ordinary shares ceasing to be
admitted to the listing on the Official List of
theFCA.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Appointment and retirement of
aDirector
The Articles of Association of the Company
setout the rules governing the appointment
and removal of a Director. The Articles of
Association may be amended by a special
resolution of the shareholders.
CHP Software and Consulting Holdings Limited,
has the right to appoint one Non-Executive
Director to the Board for so long as the
Controlling Shareholder holds 10% or more but
less than 20% of the voting rights in respect of
the Company’s shares.
If none of the Controlling Shareholders are
members of the Nomination Committee, the
Controlling Shareholder can appoint an
observer to the Nomination Committee.
Andrew Page is designated as the first
appointed Director of the Controlling
Shareholder. Andrew Denton has not been
appointed as a designated Director by the
Controlling Shareholder. It has been agreed
that for as long as the Controlling Shareholder
has the right to appoint two Directors to the
Board, and whilst Andrew Denton is a Director
of the Company, the Controlling Shareholder
will not exercise its right to appoint a second
Director to the Board.
In accordance with the recommendations
ofthe 2018 Code, all Directors will stand
forre-election at the 2024 AGM on an
annualbasis.
Powers of the Directors
Specific powers relating to the allotment and
issuance of ordinary shares and the ability of
the Company to purchase its own securities are
also included within the Articles and such
authorities are submitted for approval by the
shareholders at the AGM each year.
The Directors have the authority to allot shares
or grant rights to subscribe for or to convert
any security into shares in the Company.
Further details of the proposed authorities are
set out in the notice of the AGM. A share
repurchase programme concluded on 30 June
2023. Further details can be found page 145.
Streamlined Energy and Carbon
Reporting (SECR)
A breakdown of our greenhouse gas (GHG)
emissions in accordance with our regulatory
obligation to report GHG emissions pursuant
to section 7 of the Companies Act 2006
(Strategic report and Directors’ report)
Regulations 2013, can be found on pages 32
and 33.
Stakeholder engagement
Details of how the Group has engaged with its
employees, suppliers, customers and other
principal stakeholders together with details of
the key decisions taken by the Group during
the year are disclosed on pages 46 to 48.
Political donations
The Group made no political donations and incurred no political expenditure during the year (2023: £nil). The Company’s policy remains not to make political donations nor incur political expenditure.
At the 2024 AGM, the Directors were generally and unconditionally authorised by the Company’s shareholders to make limited political donations of up to £50,000, in order to protect against any
inadvertent breaches of the relevant provisions of the Companies Act 2006 which are very broad in nature. The Board has no intention of using this authority.
Significant shareholdings
As at 31 December 2024 and 28 February 2025 (being the latest practicable date of this report), the Company had been notified, in accordance with chapter 5 of the Disclosure Guidance and
Transparency Rules, of the following voting rights as a shareholder of the Company:
Name of shareholder
No. of ordinary shares at
31 December 2024
% of total voting rights at
31 December 2024
No. of ordinary shares at
28 February 2025
% of total voting rights at
28 February 2025 Nature of holding
CHP Software and Consulting Holdings Limited 161,454,782 54.69 161,454,782 54.66 Direct
Liontrust Asset Management 26,821,266 9.09 26,154,328 8.86 Indirect
BlackRock 17,270,499 5.85 17,519,219 5.93 Indirect
Invesco 13,876,018 4.70 13,961,511 4.73 Indirect
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Employee involvement
We place considerable value on the
involvement of our employees, viewing and
treating them as valued team members and an
integral part of our business and success. We
continue to keep them informed on matters
affecting them through CEO updates and both
formal and informal meetings, and through
Confluence, our intranet. Our employees are
regularly consulted on a wide range of matters
affecting their current and future interests.
Many of our employees have interests in
shares, including participation in the Sharesave
scheme and awards granted under the Alfa
LTIP to some senior employees. Information on
employee engagement is available on page 46,
with additional information highlighted
onpages 64. Further information on employee
engagement, as measured by our internal
employee surveys, is included on page26.
Subsidiaries and branches
The Group has subsidiaries in the USA,
Germany, Australia and New Zealand. Further
details ofthese can be found in note 32.2 to
the accounts on page 149.
Disclosure of information to
theauditor
Each of the Directors of the Company at
thedate the Directors’ report is approved
confirmsthat:
• So far as the Director is aware, there is no
relevant audit information of which the
Company’s auditor is unaware; and
• Each Director has taken all reasonable steps
to ascertain any relevant audit information
and to establish that the Group and
Company’s auditor is aware of that
information.
This confirmation is given and should be
interpreted in accordance with the provisions
of section 418 of the Companies Act 2006. RSM
UK Audit LLP, the Group’s auditor, has indicated
its willingness to continue in office and, on the
recommendation of the Audit and Risk
Committee and in accordance with section 489
of the Companies Act of 2006, a resolution to
reappoint it will be put to the 2025 AGM.
Board approval of the Directors’report
The Directors’ report was approved by the
Board on 12 March 2025 and signed on its
behalf by:
Andrew Denton
Chief Executive Officer
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The Directors are responsible for preparing
theStrategic report and the Directors’ report,
the Directors’ Remuneration Report and the
financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
Group and Company financial statements for
each financial year. The Directors have elected
under company law and are required under
theUK Listing Rules of the Financial Conduct
Authority to prepare Group financial
statements in accordance with UK-adopted
International Accounting Standards. The
Directors have elected under company law to
prepare the Company financial statements in
accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law).
The Group financial statements are required
bylaw and UK-adopted International
Accounting Standards to present fairly the
financial position and performance of the
Group; the Companies Act 2006 provides in
relation to such financial statements that
references in the relevant part of that Act
tofinancial statements giving a true and
fairview are references to their achieving
afairpresentation.
Under company law the Directors must not
approve the financial statements unless they
are satisfied that they give a true and fair view
of the state of affairs of the Group and the
Company and of the profit or loss of the Group
for that period.
In preparing each of the Group and Company
financial statements, the Directors are
required to:
a. select suitable accounting policies and then
apply them consistently;
b. make judgements and accounting estimates
that are reasonable and prudent;
c. for the Group financial statements, state
whether they have been prepared in
accordance with UK-adopted International
Accounting Standards;
d. for the Company financial statements, state
whether applicable UK accounting standards
have been followed, subject to any material
departures disclosed and explained in the
Company financial statements; and
e. prepare the financial statements on the
going concern basis unless it is inappropriate
to presume that the Group and the Company
will continue in business.
The Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain the Group’s and the
Company’s transactions and disclose with
reasonable accuracy at any time the financial
position of the Group and the Company and
enable them to ensure that the financial
statements and the Directors’ Remuneration
Report comply with the Companies Act 2006.
They are also responsible for safeguarding
theassets of the Group and the Company
andhence for taking reasonable steps for
theprevention and detection of fraud and
other irregularities.
Directors’ statement pursuant to the
Disclosure and Transparency Rules
Each of the Directors, whose names and
functions are listed on pages 54 to 55 confirm
that, to the best of each person’sknowledge:
a. the financial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and fair
view of the assets, liabilities, financial
position and profit of the Company and the
undertakings included in the consolidation
taken as a whole; and
b. the Strategic report contained in the
AnnualReport includes a fair review of
thedevelopment and performance of the
business and the position of the Company
and the undertakings included in the
consolidation taken as a whole, together
with a description of the principal risks
anduncertainties that they face.
The Directors are responsible for the
maintenance and integrity of the corporate
andfinancial information included on the Alfa
Financial Software Holdings PLC website.
Legislation in the United Kingdom governing
the preparation and dissemination of financial
statements may differ from legislation in
otherjurisdictions.
This responsibility statement was approved by
the Board of Directors on 12 March 2025 and is
signed on its behalf by:
Andrew Denton
Chief Executive Officer
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Financial
statements
112 Independent auditor’s report
119 Consolidated statement of profit
orlossandcomprehensive income
120 Consolidated statement of financial position
121 Consolidated statement of changesinequity
122 Consolidated statement of cash flows
123 Notes to the consolidated financial statements
151 Company statement of financial position
152 Company statement of changes in equity
153 Notes to the Company financialstatements
158 Five-year history
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Summary of our audit approach
Key audit matters Group
• Revenue recognition – Software Engineering and Delivery revenue
from implementation projects
Parent Company
• None
Materiality Group
• Overall materiality: £1.70m (2023: £1.48m)
• Performance materiality: £1.27m (2023: £1.11m)
Parent Company
• Overall materiality: £1.69m (2023: £1.47m)
• Performance materiality: £1.26m (2023: £1.10m)
Scope Our audit procedures covered 100% of revenue, total assets and profit
before tax.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the group financial statements of the current period and include
themost significant assessed risks of material misstatement (whether or not due to fraud)
weidentified, including those which had the greatest effect on the overall audit strategy, the
allocation of resources in the audit and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the group financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Opinion
We have audited the financial statements of Alfa Financial Holdings PLC (the ‘parent company’)
and its subsidiaries (the ‘group’) for the year ended 31 December 2024 which comprise
consolidated statement of profit or loss and comprehensive income, consolidated statement of
financial position, consolidated statement of changes in equity, consolidated statement of cash
flows, Company statement of financial position, Company statement of changes in equity and
notes to the financial statements, including significant accounting policies. The financial reporting
framework that has been applied in the preparation of the group financial statements is
applicable law and UK-adopted International Accounting Standards. The financial reporting
framework that has been applied in the preparation of the parent company financial statements
is applicable law and United Kingdom Accounting standards including Financial Reporting
Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”
(United Kingdom Generally Accepted Accounting Practice).
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 31 December 2024 and of the group’s profit for the year then ended;
• the group financial statements have been properly prepared in accordance with UK-adopted
International Accounting Standards;
• the parent company financial statements have been properly prepared in accordance with
United Kingdom Generally Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial statements section of our report. We are
independent of the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
as applied to listed public interest entities and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
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Revenue recognition – Software Engineering and Delivery revenue from implementation projects
Key audit matter
description
The Group’s operations include complex Software Engineering and Delivery activities. The delivery of customer contracts typically extends over more than one reporting period,
and often the original project plans are amended. In recognising customised licence revenue, management has to apply a number of judgements to allocate the overall
transaction price across the multiple performance obligations that have been identified within these projects. In addition, for all revenue streams, the business often negotiates
specific contractual terms with its customers which require judgement to be applied to determine how these should be accounted for in line with IFRS 15 ‘Revenue from
contracts with customers.’
We consider revenue recognition for Software Engineering and Delivery to be a key audit matter due to:
• The level of judgement involved in the identification of distinct performance obligations and subsequent measurement and timing of recognition of customised licence revenue;
• The level of judgement involved in respect of contract-specific judgements for all revenue streams;
• The potential risk of fraud in revenue recognition;
• The allocation of audit resources and effort.
Further details on revenue recognition are included in the financial statements in note 1.5 “Accounting policies – Revenue recognition”, note 2 “Critical accounting judgements,
estimates and assumptions” and note 5 “Revenue from contracts with customers”.
How the matter
was addressed in
the audit
In response to this key audit matter, the audit procedures we performed included:
• Updating our understanding of the processes and controls around revenue recognition;
• Examining the group’s revenue recognition policy, including supporting accounting papers, to assess whether performance obligations have been appropriately identified and
revenue recognised in line with IFRS 15;
• For Software Engineering and Delivery revenue from implementation projects we:
• Assessed management’s analysis of the performance obligations within individual contracts and of how the five steps in IFRS 15 should be applied;
• Audited the revenue recognition calculations for a sample of the most significant contracts to assess whether the methodology applied was consistent with the group’s
revenue recognition policy and across projects. This included testing inputs in the calculations to supporting evidence;
• Examined a sample of underlying contracts to confirm the relevant contract terms had been appropriately identified;
• Verified the explanations and data provided by management by holding discussions with project managers regarding the key assumptions and judgements made;
• Tested the completeness and accuracy of timesheet data as some performance obligations are recognised based on days worked;
• Challenged management on the appropriateness of estimates made in IFRS 15 calculations for customised licence revenue;
• Assessed specific contract key judgements and whether these were recognised appropriately in line with IFRS 15.
• Auditing the disclosures in the financial statements and evaluating whether the policy for revenue recognition is appropriately explained and critical judgements are
appropriately disclosed.
Key observations Based on the results of the audit procedures outlined above, we have no observations to report. The impacts of the key judgements applied in respect of revenue recognition
are disclosed in note 2 to the financial statements.
No key audit matters were identified in respect of the parent company.
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Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent of our audit procedures. When evaluating whether the effects of
misstatements, both individually and on the financial statements as a whole, could reasonably influence the economic decisions of the users we take into account the qualitative nature and the size
ofthe misstatements. Based on our professional judgement, we determined materiality as follows:
Group Parent company
Overall materiality £1.70m (2023: £1.48m) £1.69m (2023: £1.47m)
Basis for determining overall materiality 5% of profit before tax
(2023: 5% of profit before tax)
1% of net assets, capped at 99% of group overall materiality
(2023: 1% of net assets, capped at 99% of group overall materiality)
Rationale for benchmark applied As a listed entity, profit before taxation is considered the most
appropriate benchmark for users of the financial statements.
Net assets is considered to be the most appropriate benchmark for the
parent company as it is primarily a holding company.
Performance materiality £1.27m (2023: £1.11m) £1.26m (2023: £1.10m)
Basis for determining performance
materiality
75% of overall materiality 75% of overall materiality
Reporting of misstatements to the
AuditCommittee
Misstatements in excess of £0.09m and misstatements below that
threshold that, in our view, warranted reporting on qualitative grounds.
Misstatements in excess of £0.08m and misstatements below that
threshold that, in our view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
The group has operations located in the following countries:
• United Kingdom
• United States of America
• Germany
• Australia
• New Zealand
Although the structure of the group is made up of a number of legal entities, we have assessed that the group is a single component for the purposes of our audit because financial information is
presented to management and the Board on a consolidated basis and the group’s financial statements report a single segment and do not disclose any specific divisional information. The group’s
principal activity is consistent across all locations with a commonality of operations and there is operational interdependence across the group.
Our audit approach covers 100% of profit before tax, revenue and total assets. All audit work was completed by the group audit team and no component auditors were used in our audit.
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In relation to the entity reporting on how they have applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in relation to the directors’ statement in the
financial statements about whether the directors considered it appropriate to adopt the going
concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the
financial statements and our auditor’s report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained
inthe course of the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with
applicable legal requirements.
The impact of climate change on the audit
In planning our audit, we considered the potential impact of the possible risks arising from climate
change on the Group’s and the Company’s financial statements and obtained an understanding of
how management identifies and responds to climate-related risks. Further information on
management’s risk assessment, progress and commitments is provided in the Group’s climate-
related risk disclosures on pages 25 to 33 of the annual report.
We performed risk assessment procedures including making enquiries of management, reading
board minutes and applying our knowledge of the Group and the Company and the sector within
which it operates, to assess the potential impact on the financial statements.
Taking account of the nature of the business, the extent of the headroom in impairment testing,
and insensitivity of useful economic lives of tangible and intangible assets to changing regulation,
weather patterns or business activities, we have not assessed climate-related risk to be significant
to our audit. There was also no impact on our key audit matters.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate. Our
evaluation of the directors’ assessment of the group’s and parent company’s ability to continue to
adopt the going concern basis of accounting included:
• Checking the arithmetic accuracy of the forecasts that form the basis of the directors’ going
concern assessment and Viability statement;
• Corroborating the cash balance that is used as the starting point for the forecasts by confirming
to bank confirmations;
• Challenging management’s forecasts and comparing the 2024 budget to YTD results and
orderbook;
• Assessing the assumptions made in management’s stress-testing;
• Completing further sensitivity analysis and stress-testing of management’s forecasts;
• Auditing the disclosures in the financial statements in respect of going concern and viability.
Based on the work we have performed, we have not identified any material uncertainties relating
to events or conditions that, individually or collectively, may cast significant doubt on the group’s
or the parent company’s ability to continue as a going concern for a period of at least twelve
months from when the financial statements are authorised for issue.
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Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 110, the
directors are responsible for the preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and
the parent company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as
awhole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
butis not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect
amaterial misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
The extent to which the audit was considered capable of detecting
irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our
audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and
regulations that have a direct effect on the determination of material amounts and disclosures
inthe financial statements, to perform audit procedures to help identify instances of non-
compliance with other laws and regulations that may have a material effect on the financial
statements, and to respond appropriately to identified or suspected non-compliance with laws
and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material
misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit
evidence regarding the assessed risks of material misstatement due to fraud through designing
and implementing appropriate responses and to respond appropriately to fraud or suspected
fraud identified during the audit.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their
environment obtained in the course of the audit, we have not identified material misstatements
in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate
for our audit have not been received from branches not visited by us; or
• the parent company financial statements and the part of the directors’ remuneration report to
be audited are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Corporate governance statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and
that part of the Corporate Governance Statement relating to the parent company’s compliance
with the provisions of the UK Corporate Governance Code specified for our review by the
ListingRules.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the Corporate Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
• Directors’ statement as regards the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set out on page 24;
• Directors’ explanation as to their assessment of the group’s prospects, the period this
assessment covers and why the period is appropriate set out on pages 49 to 50;
• Director’s statement on whether it has a reasonable expectation that the group will be able to
continue in operation and meets its liabilities set out on page 49;
• Directors’ statement on fair, balanced and understandable set out on page 80;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on page 34;
• Section of the annual report that describes the review of effectiveness of risk management and
internal control systems set out on page 80; and
• Section describing the work of the audit committee set out on pages 76 to 82.
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However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity’s operations are conducted in accordance with the provisions
of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement team:
• obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks that the group and parent company operate in and how the group and parent
company are complying with the legal and regulatory frameworks;
• inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged
instancesof fraud;
• discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.
The most significant laws and regulations were determined as follows:
Legislation/Regulation Additional audit procedures performed by the Group audit engagement team included:
UK adopted IAS, FRS 102 and Companies
Act 2006
• Review of the financial statement disclosures and testing to supporting documentation;
• Completion of disclosure checklists to identify areas of non-compliance.
Tax compliance regulations • Inspection of advice received from internal/external tax advisors;
• Consultation with a tax specialist regarding the approach taken to the audit of tax;
• Consideration of whether any matter identified during the audit required reporting to an appropriate authority outside the entity.
The areas that we identified as being susceptible to material misstatement due to fraud were:
Risk Audit procedures performed by the audit engagement team:
Revenue recognition The audit procedures performed in relation to revenue recognition are documented in the key audit matter section of our audit report for Software
Engineering and Delivery revenue from implementation projects. In respect of ongoing Software Engineering and Delivery revenue our procedures
included:
• Recalculation of the revenue recognised in the year for a sample of customers based on time worked and other supporting information;
• Examining disclosures made in the financial statements to determine if these have been made in line with IFRS 15 ‘Revenue from contracts
withcustomers’.
Capitalisation of development costs • Examining the Investment Committee meeting minutes for any projects which may indicate the understatement of amounts capitalised during
theperiod;
• Interviewing relevant personnel to understand the projects capitalised in the period and the nature of projects not capitalised;
• Verifying the amounts capitalised during the year by reference to underlying payroll records and timesheet data; and
• Examining for a sample of projects whether these had been accounted for in line with IAS 38 ‘Intangible assets’.
Management override of controls • Testing the appropriateness of journal entries and other adjustments;
• Assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
• Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of
Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to
the company’s members those matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency
Rules, these financial statements will form part of the Annual Financial Report prepared in
Extensible Hypertext Markup Language (XHTML) format and filed on the National Storage
Mechanism of the UK FCA. This auditor’s report provides no assurance over whether the annual
financial report has been prepared in XHTML format.
Graham Ricketts
(Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
25 Farringdon Street
London
United Kingdom
EC4A 4AB
12 March 2025
A further description of our responsibilities for the audit of the financial statements is located
onthe Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities.
Thisdescription forms part of our auditor’s report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were appointed by management in
July 2020 to audit the financial statements for the year ending 31 December 2020 and subsequent
financial periods.
The period of total uninterrupted consecutive appointments is 5 years, covering the years ending
31 December 2020 to 31 December 2024.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group
orthe parent company and we remain independent of the group and the parent company in
conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee in accordance
with ISAs (UK).
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
£m
Note
2024
2023
Continuing operations
Revenue
5
109.9
102.0
Cost of sales
(39.0)
(38.3)
Gross profit
70.9
63.7
Sales, general and administrative expenses
(36.6)
(34.3)
Other income
–
0.7
Operating profit
6
34.3
30.1
Share of net loss of joint venture
19
–
(0.3)
Profit before net finance costs and tax
34.3
29.8
Finance income
10
0.5
0.3
Finance expense
10
(0.7)
(0.5)
Profit before taxation
34.1
29.6
Taxation
11
(8.5)
(6.1)
Profit for the financial year
25.6
23.5
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
27
(0.1)
(0.2)
Other comprehensive (loss) net of tax
(0.1)
(0.2)
Total comprehensive income for the year
25.5
23.3
Earnings per share (in pence)
Basic
12
8.68
7.99
Diluted
12
8.56
7.90
The above consolidated statement of profit or loss and comprehensive income should be read in conjunction with the accompanying notes.
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Consolidated statement of profit or loss and comprehensiveincome
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
£m
Note
2024
2023
Assets
Non-current assets
Goodwill
14
24.7
24.7
Other intangible assets
15
9.3
5.0
Property, plant and equipment
16
0.7
1.0
Right-of-use assets
17
7.7
6.1
Deferred tax assets
18
0.5
0.3
Total non-current assets
42.9
37.1
Current assets
Trade receivables
20
8.6
5.6
Accrued income
21
4.7
4.6
Prepayments
21
4.9
3.8
Other receivables
21
0.3
0.3
Corporation tax recoverable
21
2.8
1.9
Cash and cash equivalents
22
20.5
21.8
Total current assets
41.8
38.0
Total assets
84.7
75.1
Liabilities and equity
Current liabilities
Trade and other payables
23
11.7
10.0
Lease liabilities
24
0.1
1.4
Contract liabilities
23
15.7
14.2
Total current liabilities
27.5
25.6
Non-current liabilities
Lease liabilities
24
9.2
6.8
Provisions for other liabilities
25
0.8
0.7
Deferred tax liabilities
18
1.0
–
Total non-current liabilities
11.0
7.5
Total liabilities
38.5
33.1
Capital and reserves
Share capital
26
0.3
0.3
Translation reserve
27
0.1
0.2
Own shares
28
(7.9)
(8.7)
Retained earnings
53.7
50.2
Total equity
46.2
42.0
Total liabilities and equity
84.7
75.1
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
The consolidated financial statements on pages 119 to 150 were approved and authorised for issue by the Board of Directors on 12 March 2025 and signed on its behalf by:
Andrew Denton
Chief Executive Officer
Duncan Magrath
Chief Financial Officer
Alfa Financial Software Holdings PLC – Registered number: 10713517
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Consolidated statement of financial position
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Equity
attributable to
Translation Retained owners of the
£m
Note
Share capital
Own shares
reserveearningsparent
Balance as at 1 January 2023
0.3
(7.5)
0.4
48.8
42.0
Profit for the financial year
–
–
–
23.5
23.5
Other comprehensive (loss)
–
–
(0.2)
–
(0.2)
Total comprehensive income for the year
–
–
(0.2)
23.5
23.3
Transactions with owners in their capacity as owners:
Equity-settled share-based payment schemes
29
–
–
–
1.5
1.5
Equity-settled share-based payment schemes – deferred tax impact
18
–
–
–
(0.5)
(0.5)
Dividends
31
–
–
–
(19.7)
(19.7)
Own shares distributed
28
–
3.6
–
(3.4)
0.2
Own shares acquired
28
–
(4.8)
–
–
(4.8)
Balance as at 31 December 2023
0.3
(8.7)
0.2
50.2
42.0
Profit for the financial year
–
–
–
25.6
25.6
Other comprehensive (loss)
–
–
(0.1)
–
(0.1)
Total comprehensive income for the year
–
–
(0.1)
25.6
25.5
Transactions with owners in their capacity as owners:
Equity-settled share-based payment schemes
29
–
–
–
1.1
1.1
Equity-settled share-based payment schemes – deferred tax impact
18
–
–
–
0.4
0.4
Dividends
31
–
–
–
(22.1)
(22.1)
Own shares distributed
28
–
1.5
–
(1.5)
–
Own shares acquired
28
–
(0.7)
–
–
(0.7)
Balance as at 31 December 2024
0.3
(7.9)
0.1
53.7
46.2
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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£m
Note
2024
2023
Cash flows from operating activities
Profit before tax
34.1
29.6
Net finance costs
0.2
0.2
Share of net loss from joint venture
–
0.3
Operating profit
34.3
30.1
Adjustments:
Depreciation
6/16/17
1.7
1.8
Amortisation
6/15
1.0
0.7
Share-based payment charge
29
1.1
1.6
RDEC tax charge/(credit)
6
0.1
(0.5)
Increase/(decrease) in provisions
25
0.1
(0.2)
Movements in working capital:
Increase/(decrease) in contract liabilities
23
1.5
(0.6)
(Increase)/decrease in trade and other receivables
20/21
(4.2)
5.8
Increase in trade and other payables (excluding contract liabilities)
23
1.7
0.5
Cash generated from operations
37.3
39.2
Interest element on lease payments
10/24
(0.6)
(0.4)
Other interest paid
10
(0.1)
(0.1)
Income taxes paid
(8.2)
(6.5)
Net cash generated from operating activities
28.4
32.2
Cash flows from investing activities
Payments for purchases of property, plant and equipment
16
(0.3)
(0.6)
Payments for internally developed software
15
(5.3)
(2.8)
Payments in relation to direct costs associated with lease extensions
(0.3)
–
Interest received
10
0.5
0.3
Net cash outflow from in investing activities
(5.4)
(3.1)
Cash flows from financing activities
Dividends paid to Company shareholders
31
(22.1)
(19.7)
Payments of lease liabilities (principal)
24
(1.3)
(1.3)
Purchase of own shares
28
(0.7)
(4.8)
Cash used in financing activities
(24.1)
(25.8)
Net (decrease)/increase in cash
(1.1)
3.3
Cash and cash equivalents at the beginning of the year
22
21.8
18.7
Effect of foreign exchange rate changes on cash and cash equivalents
(0.2)
(0.2)
Cash and cash equivalents at the end of the year
22
20.5
21.8
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
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New and amended standards adopted by the Group
The Group has not adopted any new and amended standards in the current financial year
that have had any material impact on the disclosures or on the amounts reported in these
financial statements.
New standards, amendments and interpretations not yet adopted
At the date of authorisation of these financial statements, the Group has not applied the following
new and revised IFRS Standards that have been issued but are not yet effective:
• IFRS 9/IFRS 7 – ‘Amendments to the Classification and Measurement of Financial Instruments’
(effective 1 January 2026)
• ‘Annual Improvements to IFRS Accounting Standards’ – Volume 11 (effective 1 January 2026)
• IFRS 18 – ‘Presentation and Disclosures in Financial Statements’ (effective 1 January 2027)
The Directors of the Company have not as yet evaluated the impact of these amendments on the
presentation and disclosures of the Group’s consolidated financial statements in future periods.
1.2 Group structure
Basis of consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when
the Group is exposed to, or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. Unless otherwise stated,
subsidiaries have share capital consisting solely of ordinary shares, and the proportion of
ownership interests held equals the voting rights held by the Group. The country of incorporation
or registration is also each subsidiary’s principal place of business.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
All subsidiaries have a 31 December year-end. The Group exercises control over the employee
benefit trust (EBT) because it is exposed to, and has a right to, variable returns from this EBT and
is able to use its power over the EBT to affect those returns. The EBT is therefore consolidated by
the Group.
Joint arrangements
A joint arrangement is a contractual arrangement whereby the Group and other parties
undertake an economic activity that is subject to joint control; that is, when the relevant activities
that significantly affect the investee’s returns require the unanimous consent of the parties
sharing control.
1. Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these
consolidated financial statements. These policies have been consistently applied to all the years
presented, unless otherwise stated. The financial statements are for the Group, consisting of Alfa
Financial Software Holdings PLC (Alfa or the Company), its subsidiaries and joint venture, and are
presented to the nearest £0.1m unless otherwise stated.
The principal activity of the Group is to develop, implement and support software and SaaS
solutions to the auto and equipment finance industry in the United Kingdom, Europe, Africa,
North America, and Australasia.
1.1 Basis of preparation
Compliance with IFRS
The consolidated financial statements of the Group have been prepared in accordance with the
Companies Act 2006 and with United Kingdom adopted International Accounting Standards.
Historical cost convention
The consolidated financial statements have been prepared under the historical cost convention,
other than the revaluation of financial assets and financial liabilities recorded at fair value through
profit or loss.
Going concern
The financial statements are prepared on the going concern basis. The Group continues to be
cash-generative and the Directors believe that the Group has a resilient business model. The
Group meets its day-to-day working capital requirements through its cash reserves generated
from operating activities. The Group’s forecasts and projections, taking account of reasonably
possible changes in trading performance, show that the Group has sufficient cash reserves
to continue to operate for a period of not less than 12 months from the date of these
financial statements.
The going concern assessment also includes downside stress testing in line with FRC guidance
which demonstrates that even in the most extreme downside conditions considered reasonably
possible, given the existing level of cash held, the Group would continue to be able to meet its
obligations as they fall due.
On this basis, the Directors consider it appropriate to continue to adopt the going concern basis
of accounting in preparing the financial statements.
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Notes to the consolidated financial statements for the year ended 31 December 2024
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
c.  Delivery revenues are revenues from any work done for customers including pre-
implementation, implementation work and ongoing services, but excludes any revenue
from development work which is disclosed in Software Engineering.
See note 1.5 for details of our revenue recognition accounting policy and note 2 for the critical
accounting judgements in relation to revenue recognition.
1.4 Foreign currency translation
Functional currency
Items included in the consolidated financial statements of each of the Group’s subsidiaries are
measured using their functional currency. The functional currency of the parent and each
subsidiary is the currency of the primary economic environment in which the entity operates.
See applicable exchange rates used in 2024 and 2023 below:
2024
2023
Closing
Average
Closing
Average
USD
1.25
1.28
1.27
1.24
EUR
1.21
1.18
1.15
1.15
NZD
2.24
2.11
2.01
2.02
AUD
2.02
1.94
1.87
1.87
Presentation currency
The consolidated financial statements are presented in pounds sterling. The Company’s
functional and presentation currency is pounds sterling.
Group companies
The results and financial position of foreign operations (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
• Assets and liabilities for each consolidated statement of financial position presented are
translated at the closing rate at the date of that consolidated statement of financial position.
• Income and expenses for each statement of profit or loss and statement of comprehensive
income are translated at average exchange rates (unless this is not a reasonable approximation
of the cumulative effect of the rates prevailing on the transaction dates, in which case income
and expenses are translated at the dates of the transactions).
• All resulting exchange differences are recognised in other comprehensive income.
1. Summary of significant accounting policies continued
1.2 Group structure continued
Joint control is the contractually agreed sharing of control of an arrangement, and exists only
when decisions about the activities that significantly affect the arrangement’s returns require
the unanimous consent of the parties sharing control. Judgement is required in determining this
classification through an evaluation of the facts and circumstances arising from each individual
arrangement. Joint arrangements are classified as either joint operations or joint ventures based
on the rights and obligations of the parties to the arrangement. In joint operations, the parties
have rights to the assets and obligations for the liabilities relating to the arrangement, whereas
in joint ventures, the parties have rights to the net assets of the arrangement.
Alfa only had one joint venture, namely Alfa iQ Limited (Alfa iQ), which was formed in May 2020.
Due to the activity in Alfa iQ being brought fully into the Alfa Group, the Alfa iQ joint venture
ceased its activity in late 2023 and the Company was placed into Members Voluntary Liquidation
in 2024. The investment in the joint venture, up to the point of the Members Voluntary
Liquidation, was accounted for using the equity method.
1.3 Segment reporting
Operating and reporting segments are reported in a manner consistent with the internal
reporting provided to the Chief Operating Decision Maker (CODM). The Group’s Chief Executive
Officer (CEO), who is responsible for allocating resources and assessing performance, has been
identified as the CODM.
The CODM regularly reviews the Group’s operating results in order to assess performance and to
allocate resources. The CODM considers the business from a product perspective and, therefore,
recognises one operating and reporting segment, being the sale of software and related services.
The Group splits revenue by type of activity but reports operating results on a consolidated basis,
as presented to the CODM, along with the required entity wide disclosures.
The Group discloses revenue split by type of activity, being Subscription, Software Engineering
and Delivery.
a.  Subscription revenues include recurring revenues paid on a monthly or annual basis,
including subscription licence revenues, maintenance and cloud hosting.
b.  Software Engineering revenues include revenues from the recognition of customised licence
revenue, one-off licence fees and any development revenues.
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Notes to the consolidated financial statements for the year ended 31 December 2024 continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Any one contract may include a single performance obligation or a combination of those listed below:
1.5.1 Software implementation services
Where implementation services are considered to be distinct, i.e. when relatively straightforward,
do not require additional development services and could be performed by an external third
party, the implementation services are accounted for as a separate performance obligation from
any development services.
When a customer is in the process of implementing the software, the transaction price is
allocated to this based on the stand-alone selling prices (derived from standard day rates) and is
recognised over time based on the effort incurred, limited to the amount to which Alfa has a right
to payment. For customers under the Group’s subscription-based contracts that are undergoing
implementation, revenue for software implementation services is deemed to be distinct from
any other performance obligation. Recognition over time is appropriate because customers
simultaneously receive and consume the benefits provided. A percentage-of-completion basis
is used to estimate progress towards completion of the performance obligation over time.
To calculate the percentage-of-completion, data is derived from timesheets for the days worked
for the customer on implementation work and compared with the latest forecast of total
implementation days to be completed on the project.
When the type of services provided are ongoing services, the transaction price is deemed to be
the actual day rate, and revenue is recognised at a point in time as the service is provided.
1.5.2 Development services and licence services (the customised licence)
Another performance obligation is the granting of a right to use Alfa Systems, which includes
the delivery of the related software licence and any development efforts which change the
underlying code. During the initial phase of implementing the software, the total revenue
attributable to this performance obligation is estimated at the outset of the relevant software
implementation project and recognised as the effort is expended, on a percentage-of-completion
basis, limited to the amount of revenue to which Alfa has the right to payment. See note 5.6 for
the accounting policy for variable consideration.
Recognition over time is appropriate because customers obtain the ability to benefit from the
product from the start of the implementation project; the development or customisation of the
asset is tailored to the customer’s specific requirements; and the customer is entitled to the
benefits of the efforts as at the date the efforts are delivered. A percentage-of-completion basis
is used to estimate progress towards completion of the performance obligation over time. To
calculate the percentage-of-completion, data is derived from timesheets for the days worked for
the customer on development work and compared with the latest forecast of total development
days to be completed on the project.
1. Summary of significant accounting policies continued
1.4 Foreign currency translation continued
On consolidation, exchange differences arising from the translation of any net investment in
foreign entities are recognised in other comprehensive income. When a foreign operation is sold,
the associated exchange differences are reclassified to profit or loss, as part of the gain or loss
on sale.
Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies using
the exchange rates prevailing at the dates of the transactions. Foreign exchange differences
arising from the settlement of such transactions and from the translation at the reporting date of
monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
See applicable exchange rates used by the Group above.
1.5 Revenue recognition
The Group derives revenue by type of activity being Subscription, Software Engineering and
Delivery (as disclosed in note 1.3).
i  Subscription revenue includes the periodic rights to use Alfa Systems, periodic maintenance,
and subscription (including cloud hosting).
ii  Software Engineering revenue includes chargeable development revenue, customised licence
revenue, options over the right to use Alfa Systems, and one-off licence fees.
iii Delivery revenue includes software implementation services.
The Group provides the right to use, software development services, core implementation
services and ongoing support of its product, Alfa Systems. The Group’s contractual arrangements
contain multiple deliverables or services, such as the development or customisation of the
software to the customer’s requirements, implementation services such as migration of data
and testing, and certain project management services.
Alfa assesses whether there are distinct performance obligations at the start of each contract and
throughout the performance of the implementation, development and services projects and
maintenance period. These performance obligations are laid out in this note.
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Notes to the consolidated financial statements for the year ended 31 December 2024 continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
1.5.5 Periodic maintenance amounts
This represents the stand-alone selling price of the ongoing support or maintenance of Alfa
Systems which is recognised throughout the period over which the services are delivered.
1.5.6 Subscription amounts
Certain of the Group’s implementation and service contracts include a subscription payment
mechanism. This represents a monthly fee charged to the customer covering one or more of
the following performance obligations: the provision of monthly hosting services; the monthly
periodic right to use Alfa Systems; and the provision of monthly maintenance services (when this
becomes applicable to the customer). The monthly payments are recognised as revenue in the
period to which they relate. This reflects the underlying performance obligations of the Group
and termination rights of the customer.
1.5.7 One-off revenue amounts
From time to time, the Group is entitled to receive one-off licence revenue from its customers as
they increase the number of contracts on their version of Alfa Systems. Additionally, there are
times when catch-up periodic maintenance amounts are entitled to be received by the Group,
also as a result of the increased number of contracts. Generally, this revenue is recognised at the
point in time it is invoiced, or becomes contractually payable, reflecting the fact that the Group
has no remaining performance obligations to satisfy.
Capitalised sales incentive costs
The Group incentivises its sales force for securing sales. In line with IFRS 15, these costs are
capitalised and are amortised in line with the percentage-of-completion of the software
implementation project to which they relate.
Costs to fulfil contracts
The Group has recognised an asset in relation to employee costs to fulfil its long-term
development contracts (as disclosed in note 21). These costs relate directly to the contracts,
generate or enhance resources to be used to satisfy performance obligations in the future and
are expected to be recovered. This asset is presented within prepayments in the statement of
financial position. These costs are amortised within cost of sales in line with the percentage-of-
completion of the development project to which they relate.
1. Summary of significant accounting policies continued
1.5 Revenue recognition continued
Revenue attributable to development services is valued using the residual value method as
there are no stand-alone selling prices which are observable, as each project is customised. For
customers under the Group’s subscription-based contracts that are undergoing implementation,
revenue for development services is deemed to be distinct from any other performance
obligation and is recognised based on a percentage-of-completion basis.
Once the customer is already using the software, and the services provided are ongoing
development, the transaction price is deemed to be the actual day rate and revenue is recognised
at a point in time as the development service is provided.
1.5.3 Option over the right to use Alfa Systems
In the event that perpetual licence customers have to pay periodic maintenance fees in order to
keep using Alfa Systems, a component of these future maintenance fees is attributable to the
right to use the software. In these circumstances, the licence granted by Alfa is considered to
renew in future periods. There may be a material right in respect of discounts in future periods.
In order to ascribe a value to this option, management annualises the value of the customised
licence performance obligation and compares it to the annual right to use software performance
obligation post go live.
The value of this option is built up from the start of the implementation project in line with the
percentage-of-completion of development revenue described in note 1.5.2 above. Following the
completion of the implementation project, the value of this option is recognised evenly over the
expected remaining customer life.
1.5.4 Periodic right to use Alfa Systems
When a customer pays its maintenance fee annually, this performance obligation represents the
proportion of this fee which relates to the periodic option to renew the right to use Alfa Systems.
If there is the right of clawback of the annual right to use, such amounts are recognised
throughout the annual period. If there is no right of clawback, then the annual right to use
amount is recognised in full when there is a right of collection.
When a customer pays for its maintenance fee as part of a subscription contract (see note 1.5.6
below), it will not be treated as a separate performance obligation (and will instead be part of the
subscription amount).
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Notes to the consolidated financial statements for the year ended 31 December 2024 continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the reporting date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable
profits will be available against which the temporary differences can be utilised. Deferred income
tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred income taxes, assets and liabilities
relate to income taxes levied by the same taxation authority on either the taxable entity or
different taxable entities where there is an intention to settle the balances on a net basis.
1.8 Leases
The Group enters into lease contracts in respect of various properties and motor vehicles. These
rental contracts are typically made for fixed periods of two to ten years, and sometimes have
extension options. Lease terms are negotiated on an individual basis and contain a wide range of
different terms and conditions. In accordance with IFRS 16, leases are recognised as a right-of-use
asset with a corresponding liability, at the date at which the leased asset is available for use by the
Group. These assets and liabilities are initially measured on a present value basis (as set out in
more detail below), with each subsequent lease payment allocated between the liability and
finance cost. The finance cost is charged to profit or loss over the lease period to produce
a constant periodic rate of interest on the remaining balance of the liability for each period.
The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease
term on a straight-line basis.
Alfa assesses whether a contract is, or contains, a lease at inception of the contract. The Group
recognises a right-of-use asset and a corresponding lease liability, with respect to all lease
arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease
term of 12 months, or less) and leases of low-value assets. For these leases, the Group recognises
the lease payments as an expense on a straight-line basis over the term of the lease, unless
another systematic basis is more representative of the time pattern in which economic benefits
from the leased assets are consumed.
Lease liabilities
The lease liability is initially measured at the present value of the lease payments that are not paid
at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot
be readily determined, the Group uses its incremental borrowing rate.
1. Summary of significant accounting policies continued
1.6 Operating expenses
Operating expenses include items such as personnel costs (including training and recruitment),
cost of software not capitalised, research and development costs, and other infrastructure
expenses. These items have been grouped into the following categories for disclosure purposes:
• Cost of sales – This includes salaries and other direct costs associated with satisfying customer
contracts (including hosting costs) and for developing software.
• Sales, general and administrative expenses – This includes all the residual operating costs.
1.7 Income tax
Taxation expense for the year comprises current and deferred tax recognised in the reporting
period. Tax is recognised in profit and loss, except to the extent that it relates to items recognised
in other comprehensive income or directly in equity. Current or deferred taxation assets and
liabilities are not discounted.
Under the R&D Expenditure Credit (also referred to as the ‘RDEC’) scheme, the Group has received
a tax credit based on qualifying R&D expenditure. This tax credit is recognised within pre-tax
income, as ‘Other Income’.
Current tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the reporting date in the countries where the Group and its subsidiaries operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the Group’s
consolidated financial statements. However, the deferred income tax is not accounted for if
it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit
or loss.
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The right-of-use assets are presented as a separate line in the consolidated statement of
financial position.
The right-of-use assets are subsequently measured at cost less accumulated depreciation and
impairment losses (if applicable). They are depreciated from the commencement date of the lease
and over the shorter period of the lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset, or the cost of the right-of-use asset reflects an
expectation that the Group will exercise a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying asset. Currently, the Group does not have
any leases that include a purchase option, or transfer ownership of the underlying asset.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset,
restore the site on which it is located, or restore the underlying asset to the condition required
by the terms and conditions of the lease, a provision is recognised and measured under IAS 37.
Extension options (or periods after termination options) are only included in the lease term if the
lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a
significant event or a significant change in circumstances occurs which affects this assessment
and that is within the control of the lessee. During the current financial period, there have been
no changes in such assessments.
Variable rents that do not depend on an index, or rate, are not included in the measurement of the
lease liability and the right-of-use asset. The related payments are recognised as an expense in the
period in which the event or condition that triggers those payments occurs and are included as an
expense in the consolidated statement of profit or loss and comprehensive income.
1.9 Impairment of non-financial assets
Goodwill is tested annually for impairment. The carrying amount is allocated to the cash-
generating unit (CGU) that is expected to benefit from investment and which represents the
lowest level at which the goodwill is monitored for internal management purposes. The carrying
value of the CGU is then compared to the higher of its fair value less costs of disposal and its value
in use. Any impairment attributed to the goodwill is recognised immediately as an expense and is
not subsequently reversed.
1. Summary of significant accounting policies continued
1.8 Leases continued
Lease payments included in the measurement of the lease liability comprise:
• Fixed lease payments (including in substance fixed payments), less any lease incentives;
• Variable lease payments that depend on an index or rate, initially measured using the index or
rate at the commencement date;
• The amount expected to be payable by the lessee under residual value guarantees;
• The exercise price of purchase options, if the lessee is reasonably certain to exercise the
options; and
• Penalties for terminating the lease, if the lease term reflects the exercise of an option to
terminate the lease.
The lease liability is presented in separate lines, split between current and non-current liabilities,
in the consolidated statement of financial position. It is subsequently measured by increasing the
carrying amount to reflect interest on the lease liability (using the effective interest method) and
by reducing the carrying amount to reflect the lease payments made.
The Group re-measures the lease liability (and makes a corresponding adjustment to the related
right-of-use asset) whenever:
• The lease term has changed, or there is a change in the assessment of exercise of a purchase
option, in which case the lease liability is re-measured by discounting the revised lease
payments using a revised discount rate;
• The lease payments change due to changes in an index, or rate, or a change in expected
payment under a guaranteed residual value. In these cases, the lease liability is re-measured
by discounting the revised lease payments, using the initial discount rate (unless the lease
payments change is due to a change in a floating interest rate, in which case a revised discount
rate is used); and
• A lease contract is modified and the lease modification is not accounted for as a separate lease,
in which case the lease liability is re-measured by discounting the revised lease payments using
a revised discount rate.
Right-of-use assets
The right-of-use assets comprise:
• The initial measurement of the corresponding lease liability;
• Lease payments made at, or before, the commencement day;
• Any initial direct costs; and
• Restoration costs.
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All income and expenses relating to financial assets that are recognised in profit or loss,
where material, are presented within finance costs, finance income or other financial items,
except for impairment of trade receivables which is presented within sales, general and
administrative expenses.
Subsequent measurement of financial assets
Financial assets are measured at amortised cost if the assets meet the following conditions
(and are not designated as FVTPL):
• They are held within a business model whose objective is to hold the financial assets and collect
their contractual cash flows; and
• The contractual terms of the financial assets give rise to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest
method. Discounting is omitted where the effect of discounting is immaterial. The Group’s trade
and most other receivables (notes 20 and 21) and cash and cash equivalents (note 22) fall into this
category of financial instruments.
Impairment of financial assets
Under IFRS 9, the requirements are to use forward-looking information to recognise expected
credit losses – the ‘expected credit loss (ECL) model’. The Group considers a broad range of
information when assessing credit risk and measuring expected credit losses, including past
events, current conditions, and reasonable and supportable forecasts that affect the expected
collectability of the future cash flows of the instrument.
1.12 Trade receivables
Trade receivables are amounts due from customers for licences sold or services performed in the
ordinary course of business. They are generally due for settlement within 30 days of the invoice
date and are therefore all classified as current. Trade receivables are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest method, less
provision for impairment.
1. Summary of significant accounting policies continued
1.9 Impairment of non-financial assets continued
Other assets are tested for impairment whenever events or changes in circumstances indicate that
the carrying amount might not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows from other assets or groups of assets
(CGUs). Non-financial assets other than goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at the end of each reporting period.
1.10 Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand as well as short-term deposits with
original maturities of three months or less.
1.11 Financial assets
Recognition and derecognition
Financial assets are recognised in the statement of financial position when the Group becomes
party to the contractual provision of the instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the
financial asset expire, or when the financial asset and substantially all the risks and rewards
are transferred.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and
are measured at the transaction price in accordance with IFRS 15, all financial assets are initially
measured at fair value adjusted for transaction costs (where applicable). Financial assets,
other than those designated and effective as hedging instruments, are classified into the
following categories:
• Amortised cost;
• Fair value through profit or loss (FVTPL); and
• Fair value through other comprehensive income (FVOCI).
In the periods presented, the Group does not have any material financial assets categorised as
FVTPL or FVOCI. The classification is determined by both:
• The entity’s business model for managing the financial asset; and
• The contractual cash flow characteristics of the financial asset.
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recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount,
which is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of
assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows.
1.14 Goodwill and other intangible assets
Goodwill
Goodwill arose on the acquisition of subsidiaries in 2012 and represents the excess of the
consideration transferred over the fair value of the identifiable assets acquired and the liabilities
and contingent liabilities assumed.
The Group assesses whether goodwill has suffered any impairment on an annual basis in
accordance with the accounting policy stated in note 1.9 above. There is one CGU, being the
Group, as its geographical operations do not have separate or distinct cash inflows. The
recoverable amount of goodwill has been determined based on value-in-use calculations using
cash flow projections from financial budgets and forecasts.
Budgeted cash flow projections are based on the expectation of signing new customers in the
Group’s sales pipeline as well as ongoing projects with existing customers. Budgeted gross margin
is based on historical evidence and the expectations of market development and efficiency
leverage. Management believes that any reasonable change in any of the key assumptions on
which the recoverable amount is based would not cause the reported carrying amount to exceed
the recoverable amount of the CGU. The discount rate used reflects the Group’s pre-tax weighted
average cost of capital (WACC), as adjusted for region-specific risks and other factors as required
by IFRS.
Intangible assets
Internally generated intangible assets are initially measured at cost, and only qualify for
capitalisation if the Group can demonstrate all of the following:
• The technical feasibility of completing the intangible asset so that it will be available for use or
sale, its intention to complete the intangible asset and use or sell it;
• Its ability to use or sell the intangible asset, including how the intangible asset will generate
probable future economic benefits;
• The existence of a market or, if it is to be used internally, the usefulness of the intangible asset;
• The availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset; and
• Its ability to measure reliably the expenditure attributable to the intangible asset
during development.
1. Summary of significant accounting policies continued
1.12 Trade receivables continued
The Group has applied the simplified approach to measuring expected credit losses, which
uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables
have been grouped based on days overdue. The expected impairment loss is recognised in the
consolidated statement of profit or loss and comprehensive income within sales, general and
administrative expenses, and subsequent recoveries are credited to the same account previously
used to recognise the impairment charge. During the current and prior period, the result of the
above was immaterial and no impairment loss has been recognised.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of
receivable mentioned above. The credit qualities of these receivables are periodically assessed by
reference to external credit ratings (if available) or to historical information about their default
rates. The Group does not hold any collateral as security.
As the total carrying amount of the current portion of the trade and other receivables is due
within the next 12 months after the reporting date, the impact of applying the effective interest
method is not significant and, therefore, the carrying amount equals the contractual amount or
the fair value initially recognised.
1.13 Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation.
Historical cost includes expenditure that is directly attributable to the acquisition of the item.
Depreciation on assets is calculated using the straight-line method to allocate their cost over
their estimated useful lives, as follows:
Fixtures and fittings: 3-10 years
IT equipment: 2-5 years
The assets’ residual values and useful lives are reviewed and adjusted if necessary at each
reporting date. An asset’s carrying amount is written down immediately to its recoverable amount
if the asset’s carrying amount is greater than its estimated recoverable amount. Repairs and
maintenance are charged to the consolidated statement of profit or loss and comprehensive
income as incurred. Any gains or losses on disposals are recognised within sales, general and
administrative expenses in the consolidated statement of profit or loss and comprehensive
income unless otherwise specified.
Property, plant and equipment are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
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The Group’s financial liabilities include trade and other payables and lease liabilities. Financial
liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability at fair value through profit or loss. Subsequently,
financial liabilities are measured at amortised cost using the effective interest method. All
interest-related charges and, if applicable, changes in an instrument’s fair value that are reported
in profit or loss are included within finance costs or finance income. The Group derecognises
financial liabilities when, and only when, the Group’s obligations are discharged, cancelled
or expired.
Trade and other payables and lease liabilities are classified as current liabilities if payment is due
within one year or less. If not, they are presented as non-current liabilities.
1.16 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as
a result of past events, it is more likely than not that an outflow of resources will be required to
settle the obligation and a reliable estimate of the amount can be made. When the effect of the
discounting is material, provisions are measured at the present value of the expenditures
expected to be required to settle the obligation.
1.17 Employee benefits
The Group provides a range of benefits to employees, including paid holiday arrangements and
defined contribution pension plans.
Short-term benefits
Short-term benefits, including health cover and other similar non-monetary benefits, are
recognised as an expense in the period in which the service is received.
Post-employment benefits
The Group operates various defined contribution plans for its employees. A defined contribution
plan is a pension plan where the Group pays fixed contributions into a separate independent
entity. The Group has no legal or constructive obligation to pay further contributions if the fund
does not hold sufficient assets to pay all employees the benefits relating to the employee’s
service in the current and prior periods.
1. Summary of significant accounting policies continued
1.14 Goodwill and other intangible assets continued
The cost for internally generated intangible assets is based on the time spent by staff on
product development activities, to which a day rate based on salary cost is applied. Development
expenditure incurred on minor or major upgrades, or other changes in software functionality,
does not satisfy the criteria, where it is considered that the product is not substantially new in
its design or functional characteristics. Such expenditure is therefore recognised as an expense.
The Group continually assesses the eligibility of development costs for capitalisation on a project-
by-project basis. See note 15 for disclosure of development costs which have met the criteria of
IAS 38 for recognition.
Externally acquired intangible assets are initially recorded at historical cost. Historical cost
includes expenditure that is directly attributable to the acquisition of the item.
The Group amortises intangible assets with a limited useful life, using the straight-line method
over the following periods:
Computer software: licence period or 10 years as applicable
Internally generated software: 3-5 years
Amortisation is presented within sales, general and administrative expenses.
Research and development costs which do not meet the criteria set out above are recognised
as an expense when incurred. Development costs previously recognised as an expense are not
recognised as an asset in subsequent periods.
1.15 Trade and other payables
Trade payables are obligations to pay for goods or services which have been acquired in the
ordinary course of business from suppliers. Trade payables are recognised initially at fair value
and subsequently measured at amortised costs using the effective interest rate method. As the
total carrying amount is due within the next 12 months from the reporting date, the impact of
applying the effective interest method is not significant and, therefore, the carrying amount
equals the contractual amount or the fair value initially recognised.
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1.19 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of Alfa
by the weighted average number of ordinary shares outstanding during the year (excluding own
shares held).
Diluted earnings per share
Diluted earnings per share is calculated in line with the basic earnings per share calculation
above except that the weighted average number of shares includes all potentially dilutive options
granted by the reporting date as if those options had been exercised on the first day of the
accounting period or the date of the grant, if later. The shares have no right to voting or to
dividends while held in trust.
2. Critical accounting judgements, estimates and assumptions
The preparation of financial statements requires the use of accounting estimates which, by
definition, will seldom equal the actual results. Management also needs to exercise judgement in
applying the Group’s accounting policies.
This note provides an overview of the areas that involved a higher degree of judgement or
complexity, and of items which are more likely to be materially adjusted in future periods due to
estimates and assumptions turning out to be wrong. Detailed information about each of these
estimates and judgements is included in other notes, together with information about the basis
of calculation for each affected line item in the financial statements.
2.1 Critical judgements in applying the Group’s accounting policies
Revenue recognition
Critical judgements specific to customised licence revenue:
The Group is required to make an assessment as to whether the implementation process, which
includes customised licence and implementation revenue streams as well as any maintenance
fees during this phase, forms one or a number of performance obligations. Since the residual
value method is used for the customised licence revenue (as explained in note 1.5), the estimation
of fair value of implementation revenue will impact the contract consideration assigned to the
customised licence.
1. Summary of significant accounting policies continued
Employee share scheme expense
The Group makes equity-settled share-based payments to certain employees, which are
measured at fair value at the date of grant and expensed on a straight-line basis over the vesting
period, based on the Group’s estimate of shares that will eventually vest. For those share schemes
with market-related vesting conditions, the fair value is determined using the Monte Carlo model
at the grant date. For share options issued with non-market performance vesting conditions,
the fair value of the underlying vehicle is equal to the grant date share price discounted by the
expected dividend yield to reflect the lack of dividend accrual over the vesting period. For all other
share awards, those with pure employment conditions attached, the fair value is determined by
reference to the market value of the shares at the grant date or (where they have an exercise
price) by using the Black Scholes model. For all share schemes with non-market vesting
conditions, the likelihood of vesting has been taken into account when determining the relevant
charge. Vesting assumptions are reviewed during each reporting period to ensure they reflect
current expectations.
1.18 Equity
Ordinary shares
Ordinary shares are classified as equity. There are no restrictions on the distribution of capital
and the repayment of capital.
Cumulative translation reserve
Exchange differences arising on translation of foreign subsidiaries are recognised in other
comprehensive income and accumulated in a separate reserve within equity. The cumulative
amount would be reclassified to profit or loss if the entity was disposed of.
Own shares
Own shares represent the shares of the parent company Alfa Financial Software Holdings PLC
that are either held by the EBT, or acquired by the Group as part of its share buy-back programme
(see note 28).
Own shares are recorded at cost and deducted from equity.
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3. Financial risk management
In common with all other businesses, the Group is exposed to risks that arise from its use of
financial instruments. This note describes the Group’s objectives, policies and processes for
managing those risks and the methods used to measure them. Further quantitative information
in respect of these risks is presented throughout these financial statements.
Area
Exposure arising from
Measurement
Management
Market risk – foreign Contracted Cash flow forecasting Natural hedging from
exchange revenue and costs and foreign exchange localised cost base and
denominated in sensitivity conversion of foreign
a currency other than currency cash balances
the entity’s functional into pounds sterling;
currency; and and
Monetary assets and Use of forward
liabilities denominated contracts to manage
in a currency other some of the foreign
than the entity’s exchange risk (these are
functional currency not hedge accounted)
Credit risk – cash Cash and cash
Credit ratings
Diversification of bank
balances equivalents deposits
Credit risk – customer Trade receivables and Ageing analysis Credit checks and
receivables accrued income Credit ratings contractual payment
terms
Liquidity
Cash and cash
Daily cash reporting
Cash forecasting and
equivalents managing maturity of
cash deposits
The Group’s overall risk management policy focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the Group’s financial performance. The Group
has used financial instruments to hedge certain risk exposures in the past. Risk management is
carried out by the finance function under policies approved by the Board. The finance function
identifies, evaluates and mitigates financial risks when deemed necessary.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as
a going concern, so that it can provide returns for shareholders and benefits for other
stakeholders, and maintain an optimal capital structure.
2. Critical accounting judgements, estimates and assumptions continued
In addition, the Group is also required to make an assessment as to whether each contract
contains an expectation to deliver multiple separate instances of the customised licence which
may form separate groups of distinct performance obligations. In doing the above, the Group
assesses each software implementation contract as to whether the underlying software
requires significant modification or customisation by the Group in order to meet the customer’s
requirements before Alfa Systems can be utilised by the customer. Therefore, judgement is
required in determining which efforts relate to the implementation process and which efforts
could be determined to be development services which change or enhance the underlying code.
In making this judgement, the Group assesses the contractual terms and the original project
plan for the implementation but also uses historical evidence of what constitutes core
implementation work.
Critical judgements applicable to all revenue:
Judgements are made when the Group enters into new contracts with existing customers and
also when there are changes to existing contracts with customers that include the addition of new
customer-specific contractual terms. For these, the Group assesses the contractual terms both
individually and in the context of the wider arrangement and applies the guidance in IFRS 15 to
determine the appropriate accounting.
Internally generated software development – Assessing whether a project meets criteria
of IAS 38
The Group is required to make an assessment of each ongoing project in order to determine
at what stage (if at all) a project meets the criteria outlined in the Group’s accounting policies.
Such assessment may, in certain circumstances, require significant judgement. In making this
judgement, the Group evaluates, amongst other factors, the stage at which technical feasibility
has been achieved, management’s intention to complete and use or sell the product, the
likelihood of success, the availability of technical and financial resources to complete the
development phase and management’s ability to measure reliably the expenditure attributable
to the project. Research and product development expenditure incurred on minor or major
upgrades, or other changes in software functionality, does not satisfy the criteria where it is
considered that the product is not substantially new in its design or functional characteristics.
Such expenditure is therefore recognised as an expense. Judgement is also required with respect
to when an asset is ready to be amortised – in making this judgement, the Group considers,
amongst other factors, when the asset is available for use in the manner intended
by management.
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The Group’s customer base predominantly consists of large financial institutions that are
financially sound. The responsibility for customer credit risk management rests with management
of the Group. Payment terms are set in accordance with practices in the different geographies and
end markets served, typically being 30 days from the date of the invoice. Trade receivables are
actively monitored and managed. Collection risk is mitigated through prompt submission of
invoices. Historically, there has been a de minimis level of customer default as a result of the
long history of dealing with the Group’s customer base and an active credit monitoring function.
Where applicable, credit limits may be established based on internal or external rating criteria,
which take into account such factors as the financial condition of the customers, their credit
history and the risk associated with their industry segment.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses, which uses
a lifetime expected loss allowance for all trade receivables and accrued income. To measure the
expected credit losses, trade receivables and accrued income have been grouped based on
shared credit risk characteristics and the days past due. The accrued income relates to unbilled
work in progress and has substantially the same risk characteristics as the trade receivables for
the same types of contracts, other than where the Group has collected upfront payments in the
form of licence fees at the start of a software implementation contract.
The expected loss rates of trade receivables are based on the payment profiles of customer
invoices over a period of 36 months before 31 December 2024 (2023: 31 December 2023), and the
corresponding historical credit losses experienced within this period. The historical loss rates are
then adjusted to reflect current or forward-looking information in relation to any macroeconomic
factors affecting the ability of the customers to settle the receivables. The same approach is
applied to both trade receivables and accrued income expected credit loss provisions.
The Group has not identified any current factors or forward-looking information which would be
relevant to the historical loss rates. On this basis, the loss allowance as at 31 December 2024 and
31 December 2023 was immaterial for both trade receivables and accrued income.
See note 20 – Trade receivables for the ageing of trade receivables and significant customer credit
risk exposure.
3. Financial risk management continued
3.1 Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risks arising from
various currencies, primarily with respect to those described below. Revenue is predominantly
denominated in pounds sterling and US dollars. Operating costs are influenced by the currencies
of the countries where the Group’s subsidiaries are based, and pounds sterling and the US dollar
are the currencies in which most operating costs are denominated.
The split by currency in relation to trade receivables is set out in note 20.
The Group’s exposure to foreign currency risk in relation to revenue is set out in note 5.4.
The Group utilised forward contracts in both 2024 and 2023 to hedge against foreign
currency exposure. The Group has three outstanding commercial foreign exchange contracts
at 31 December 2024 (2023: one outstanding) with a fair value of £(0.1)m (2023: £0.2m). No hedge
accounting has been applied in the year.
A 10% increase in the USD:GBP exchange rate in the year ended 31 December 2024
would have increased revenue and profit by 4% and 9% respectively (2023: 3% and 6%
respectively). Management believes that 10% is a reasonable sensitivity given historical
exchange rate movement.
3.2 Credit risk
a. Credit risk related to transactions with financial institutions
Credit risk with financial institutions is managed by the Group’s finance function in accordance
with a Board-approved treasury policy. Management is not aware of any significant risks
associated with financial institutions as a result of cash and cash equivalents deposits
(including short-term investments) and financial derivative transactions.
b. Credit risks related to customer trade receivables
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy
or financial reorganisation, change of strategy and default or delinquency in payments are
considered indicators that a trade receivable could be impaired. Given the complexity, the size
and the length of certain software implementation of related projects, a delay in the settlement
of an open trade receivable does not necessarily constitute objective evidence that the trade
receivable is irrecoverable.
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4. Segments and principal activities
4.1 Revenue by stream
The Group assesses revenue by type of activity, being Subscription, Software Engineering and
Delivery, as summarised below:
£m
2024
2023
Subscription
37.5
31.8
Software Engineering
17.4
15.6
Delivery
55.0
54.6
Total revenue*
109.9
102.0
* As explained on page 24, the names of two revenue streams have been changed in 2024 – ‘Software’ is now ‘Software
Engineering’ and ‘Services’ is now ‘Delivery’. This is purely a renaming of the revenue streams which has not impacted the
revenue allocation between the streams, nor the total revenue or profit disclosed for 2023.
4.2 Non-current assets geographical information
Non-current assets attributable to each geographical market:
£m
2024
2023
UK
40.9
35.7
North America
0.8
1.0
Rest of EMEA (excl. UK)
*
–
–
Rest of World
*
0.7
0.1
Total non-current assets
42.4
36.8
* To be consistent with the geographical split in note 5.3, the ‘Rest of the World’ assets disclosed in the prior year have been
split into ‘Rest of EMEA’ and ‘Rest of the World’. The total remains unchanged.
Revenue by geographical market is contained within note 5.3. The table above excludes deferred
tax assets for both 2024 and 2023.
5. Revenue from contracts with customers
5.1 Customer concentration
There were no customers with revenue accounting for more than 10% of total revenue in 2024
and 2023.
5.2 Timing of revenue
The Group derives revenue from the transfer of goods and services as follows over time and at a
point in time in the following revenue streams:
3. Financial risk management continued
3.3 Liquidity risk
The Group’s principal objectives when managing capital are to ensure that funds are available to
support its growth strategy and to safeguard the Group’s ability to continue as a going concern.
The capital structure of the Group consists of cash and cash equivalents (note 22) and equity
attributable to equity holders of the parent.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they
fall due.
The Group manages its exposure to liquidity risk through short and long-term forecasts and by
seeking to align the maturity profiles of its financial assets with its financial liabilities. The Group’s
policy is to maintain an adequate level of liquidity to meet its liabilities expected to be settled in
the short or near term, under both normal and stressed conditions.
The following table details the remaining contractual maturity of the Group’s financial liabilities.
The amounts disclosed in the table are the contractual undiscounted cash flows.
31 December 2024
Between Between Between
Less than 6 to 12 1 to 2 2 to 5 More than
£m
Total
6 months months years years 5 years
Trade and other
payables
8.4
8.4
–
–
–
–
Lease liabilities – future
lease payments
13.4
0.5
0.3
1.8
4.8
6.0
31 December 2023
Between Between Between
Less than 6 to 12 1 to 2 2 to 5 More than
£m
Total
6 months months years years 5 years
Trade and other
payables
8.0
8.0
–
–
–
–
Lease liabilities – future
lease payments
9.3
0.8
0.9
1.6
4.6
1.4
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
5.4 Revenue by currency
Revenue by contractual currency is as follows:
£m
2024
2023
GBP
40.4
46.3
USD
46.5
34.6
EUR
14.8
13.9
Other
8.2
7.2
Total revenue
109.9
102.0
5.5 Liabilities from contracts with customers
£m
2024
2023
Contract liabilities – deferred licence and fees
8.1
8.0
Contract liabilities – deferred maintenance
7.6
6.2
Total contract liabilities
15.7
14.2
Contract liabilities – deferred licence
Where a customer purchases a perpetual software licence, this is generally invoiced upfront at
the commencement of the implementation project. Customers generally require additional
development efforts over the life of the implementation project in order to customise the
underlying code within Alfa Systems. Together, these two elements form the Group’s customised
licence performance obligation. The fair value of this performance obligation is determined using
the residual method as set out in note 1.5.2 and this fair value is recognised as the development
effort is expended, on a percentage-of-completion basis.
As such, the deferred licence contract liability balance as at 31 December 2024 and 31 December
2023 represents any amounts received in advance for the customised licence performance
obligation being satisfied (including any unrecognised software licence amounts that were
received upfront).
Additionally, where an option over the right to use Alfa Systems in the future exists, the value of
this is also included within the deferred licence contract liability. The contract liability relating to
the material right value is increased over the life of the implementation project in line with the
percentage of completion of the development efforts and then released on a straight-line basis
over the expected remaining customer life post completion of the implementation project.
5. Revenue from contracts with customers continued
5.2 Timing of revenue continued
2024
Software Total
£m
Subscription
Engineering
Delivery
revenue
At a point in time – time
and materials
–
7.5
43.8
51.3
At a point in time – fixed price
–
0.8
–
0.8
Over time – time and materials
–
7.6
11.2
18.8
Over time – fixed price
37.5
1.5
–
39.0
Total revenue*
37.5
17.4
55.0
109.9
2023
Software Total
£m
Subscription
Engineering
Delivery
revenue
At a point in time – time
and materials
–
9.8
39.3
49.1
At a point in time – fixed price
–
0.5
–
0.5
Over time – time and materials
–
3.5
15.3
18.8
Over time – fixed price
31.8
1.8
–
33.6
Total revenue*
31.8
15.6
54.6
102.0
All goods and services are sold directly to customers.
* As explained on page 24, the names of two revenue streams have been changed in 2024 – ‘Software’ is now ‘Software
Engineering’ and ‘Services’ is now ‘Delivery’. This is purely a renaming of the revenue streams which has not impacted the
revenue allocation between the streams, nor the total revenue or profit disclosed for 2023.
5.3 Revenue geographical information
Revenue attributable to each geographical market based on where the customer mainly utilises
its instance of Alfa, or where the service is rendered, is as follows:
£m
2024
2023
UK
32.0
38.1
North America
46.1
33.6
Rest of EMEA (excl. UK)
23.6
23.1
Rest of World
8.2
7.2
Total revenue
109.9
102.0
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
The above includes certain amounts recognised as contract liabilities. The transaction price
allocated to these unsatisfied or partially satisfied performance obligations as at 31 December
2024 is £9.9m (2023: £9.4m). This amount is expected to be recognised over the remaining life
of the implementation projects, in respect of the licence and development efforts, and over the
expected customer life (following the completion of the implementation project) in respect of
the option over the right to use Alfa Systems. Of the £9.9m, it is expected that £3.9m will be
recognised in 2025, with the remainder being recognised in subsequent years.
These unsatisfied or partially satisfied performance obligations are based on management’s
best judgement and may be impacted in the future by a number of factors including:
• Any possible contract modifications;
• Currency fluctuations;
• External market factors; and
• Changes to the overall forecast project plan including the overall life of the implementation
project and any required development efforts.
The Group applies the practical expedient in paragraph 121 of IFRS 15 and does not disclose
information about the unsatisfied performance obligations that have original expected durations
of one year or less. This includes those performance obligations linked to ongoing services for all
project types (i.e. subscription, software engineering and delivery).
The Group also applies the practical expedient in paragraph B16 of IFRS 15 and does not disclose
the amount of the transaction price allocated to the unsatisfied contract performance obligations
where consideration will be received directly corresponding to the value of the performance
obligation in the future and this consideration aligns to the value received to date for the
corresponding performance obligation. This includes those performance obligations linked to our
software implementation services.
The disclosures above for unsatisfied or partially satisfied performance obligations are not
relevant to our subscription performance obligations as these are typically satisfied on a monthly
basis in line with the termination rights of the customers (see note 1.5.6).
The Group has variable consideration in the form of contract banding for its licence and
maintenance volumes. It is included in the transaction price only to the extent that it is highly
probable that a significant reversal of revenue will not occur when the uncertainty associated
with the variable consideration is subsequently resolved.
5. Revenue from contracts with customers continue d
5.5 Liabilities from contracts with customers continued
The deferred licence contract liability balance will increase during the year as a result of:
• Any new upfront software licence payments;
• Any write back in previously recognised revenue as a result of project extensions or re-plans;
• Decreasing percentage-of-completion of development efforts; and
• Any additional material right balances that are added during the year.
The deferred licence contract liability balance will decrease during the year as a result of:
• Increasing percentage-of-completion of development efforts; and
• Any release of material right balances following the completion of the implementation project.
Contract liabilities – deferred maintenance
A number of the Group’s customers are invoiced annually in advance for the maintenance and
support service provided by the Group. As such, the deferred maintenance contract liability
balance will increase as a result of billing and invoices becoming due, and will decrease as the
Group satisfies its associated performance obligations. The deferred maintenance contract
liability balance as at 31 December 2024 and 31 December 2023 therefore represents the Group’s
unsatisfied maintenance performance obligation for which the revenue has been invoiced in
advance.
5.6 Unsatisfied performance obligations
During 2020, the Group entered into a new one-off five-year contract with a customer to renew its
software licence and maintenance agreements. The total amount of the contract price from this
non-cancellable contract that relates to the performance obligations that are unsatisfied at
31 December 2024 is £1.8m (2023: £4.0m). We expect to recognise the remaining £1.8m in the final
financial year of the contract, being 2025.
In addition, the Group has unsatisfied or partially satisfied performance obligations at
31 December 2024 that relate to the licence customisation for some customers that have ongoing
implementation projects. This performance obligation includes the delivery of the related
software licence and any development efforts which will change the underlying code. Linked
to certain of these ongoing and future projects, and also to certain implementation projects
completed during 2024, the Group also has unsatisfied or partially satisfied performance
obligations at 31 December 2024 that relate to the option over the right to use Alfa Systems,
and in particular any material right in respect of discounts to be received by customers in
future periods.
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Notes to the consolidated financial statements for the year ended 31 December 2024 continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Average monthly number of people employed based on location
(including Executive Directors)
2024
2023
UK
340
334
USA
99
86
Rest of EMEA (excl. UK)
*
17
14
Rest of World
*
29
29
Total average monthly number of people employed
485
463
* To be consistent with the geographical split in note 5.3 the ‘Rest of the World’ headcount disclosed in the prior year has
been split into ‘Rest of EMEA’ and ‘Rest of the World’. The total remains unchanged.
At 31 December 2024, the Group had 502 employees (2023: 475).
8. Key management
Key management compensation (including Directors):
£m
2024
2023
Wages, salaries and short-term benefits
2.3
2.1
Social security contributions
0.3
0.2
Share-based payments (including social security contributions)
0.5
1.0
Total key management compensation
3.1
3.3
Key management personnel consist of the Company Leadership Team and the Executive and
Non-Executive Directors. Directors’ remuneration is detailed in the Remuneration Report from
page 83.
6. Operating profit
The following items have been included in arriving at operating profit:
£m
2024
2023
Research and development costs
2.3
3.1
Depreciation of property, plant and equipment
0.6
0.6
Depreciation of right-of-use lease assets
1.1
1.2
Amortisation of intangible assets
1.0
0.7
Foreign exchange (gain)/loss
(0.2)
0.1
Forward foreign exchange contracts (gain)
(0.3)
(0.4)
Share-based payments (including social security contributions)
1.4
1.6
RDEC
*
0.1
(0.5)
Costs related to possible offers
**
–
0.6
* The Company intends to claim credits under the UK RDEC regime in respect of the years 2023 and 2024. The amount of
the estimated RDEC credit is required to be recognised as both other income (which is taxable) and as a recoverable. The
estimated RDEC amount recognised in 2023 was £0.5m. In 2024, the Company reduced the estimated RDEC benefit for
2023 by £0.3m to £0.2m, and also recognised an estimated RDEC benefit for 2024 of £0.2m. Accordingly, as at 31 December
2024, the Company has recognised a total £0.4m of RDEC credit for 2023 and 2024.
** Costs related to possible offers to acquire the Group of £0.6m were incurred in 2023. These related to legal fees and
expenses incurred as a result of two possible offers from private equity firms. No such costs were incurred in 2024.
7. Personnel-related costs
£m
2024
2023
Wages and salaries
*
44.4
41.3
Social security contributions (on wages and salaries)
5.2
5.1
Pension costs
3.5
3.2
Less: capitalisation
*
(5.3)
(2.8)
47.8
46.8
Profit share pay
**
4.2
3.8
Share-based payments (including social security contributions)
1.4
1.6
Total employment costs
53.4
52.2
* To be consistent with the current year disclosure, the prior year wages and salaries number has been split into the amount
that was expensed and the amount that was capitalised as part of time spent on internally generated intangibles. The net
number is consistent with the 2023 disclosure.
** Profit share pay refers to a pool of money (that equates to approximately 10% of the Group’s pre-tax profits) which is
shared amongst the employees, excluding Directors and some other senior managers, as a percentage of basic salary.
The amount disclosed includes the related social security contributions.
138
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
11. Income tax expense
Analysis of charge for the year
£m
2024
2023
Current tax:
Current tax on profit for the year
6.8
6.1
Adjustment in respect of prior years
(0.2)
(1.2)
Foreign tax on profit of subsidiaries for the current year
0.7
0.5
Current tax
7.3
5.4
Deferred tax:
Origination and reversal of temporary differences
1.2
0.7
Deferred tax
1.2
0.7
Total tax charge in the year
8.5
6.1
The effective tax rate for the year is in line with (2023: lower than) the standard rate of
corporation tax in the UK. The effective tax rate for the year ended 31 December 2024 was 24.9%
(2023: 20.6%). The effective tax rate for the year is impacted by favourable adjustments in respect
to prior years totalling £0.2m relating predominately to the UK position for 2023 including further
work on the deductibility of exceptional costs (2023: £1.2m, due predominately to the benefit of
the R&D claim for 2022). Unlike in 2022 and earlier years, the effective tax rate for both 2024 and
2023 does not benefit from the impact of UK R&D claims, as from 2023 the Company is required
to make R&D claims under the UK RDEC regime.
9. Auditor’s remuneration
The Group obtained the following services from the Group’s auditor as detailed below:
£m
2024
2023
Audit fees
RSM UK Audit LLP
Audit of the consolidated financial statements
0.2
0.2
Audit of subsidiaries
0.2
0.2
Total audit fees
0.4
0.4
Audit-related assurance fees
Review of interim financial report
0.1
0.1
Total audit-related assurance fees
0.1
0.1
Non-audit services
–
–
Total audit and non-audit-related services
0.5
0.5
10. Finance income and expense
£m
2024
2023
Finance income
Interest income on cash or short-term bank deposits
0.5
0.3
£m
Note
2024
2023
Finance expense
Interest on lease liabilities
24
(0.6)
(0.4)
Other interest expense
(0.1)
(0.1)
Total finance expense
(0.7)
(0.5)
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
13. Financial assets and liabilities
£m
Note
2024
2023
Financial assets
Financial assets at amortised cost:
Trade receivables
20
8.6
5.6
Other financial assets at amortised cost
21
5.0
4.9
Cash and cash equivalents
22
20.5
21.8
Total financial assets
34.1
32.3
Financial liabilities
Financial liabilities at amortised cost:
Trade and other payables
23
8.4
8.0
Lease liabilities
24
9.3
8.2
Total financial liabilities
17.7
16.2
14. Goodwill
£m
2024
2023
Cost
At 1 January
24.7
24.7
At 31 December
24.7
24.7
The recoverable amount of goodwill has been determined based on value-in-use calculations
using cash flow projections from financial budgets and forecasts for a five-year period using a
pre-tax discount rate of 10.4% (2023: 10.4%) which is based on the CGU’s weighted average cost of
capital. Cash flows beyond these periods have been extrapolated using a steady 2.5% (2023: 2.7%)
average growth rate which is reflective of management’s best estimate at the time.
Management believes that any reasonable change in any of the key assumptions on which the
recoverable amount is based would not cause the reported carrying amount to exceed the
recoverable amount of the CGU.
11. Income tax expense continued
The overall tax charge for the year is reconciled as follows:
Analysis of charge for the year
£m
2024
2023
Profit on ordinary activities before taxation
34.1
29.6
Profit on ordinary activities at the standard rate of corporation tax
– 25.0% (2023: 23.5%*)
8.5
7.0
Tax effects of:
Adjustment in respect of prior years
(0.2)
(1.2)
Impact of disallowable items
–
0.2
Other
0.2
0.1
Total tax charge for the year
8.5
6.1
* The rate of UK corporation tax increased from 19% to 25% with effect from April 2023. The blended rate of UK corporation
tax for 2023 is therefore 23.5%.
12. Earnings per share
2024
2023
Profit attributable to equity holders of Alfa (£m)
25.6
23.5
Weighted average number of shares outstanding during the year
294,925,812
294,462,166
Basic earnings per share (pence per share)
8.68
7.99
Weighted average number of shares outstanding including
potentially dilutive shares
298,962,970
298,119,816
Diluted earnings per share (pence per share)
8.56
7.90
The weighted average number of ordinary shares in issue excludes 5,074,188
(2023: 5,537,834) shares held by the Group cumulatively under the EBT and as a result
of the share buy-back programme.
The diluted number of ordinary shares outstanding, including share awards, is calculated on the
assumption of conversion of 4,037,158 (2023: 3,657,650) potentially dilutive ordinary shares.
140
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
16. Property, plant and equipment
Fixtures and
£m
fittings
IT equipment
Total
Cost
At 1 January 2023
1.5
3.8
5.3
Additions
0.1
0.5
0.6
Disposals
–
(1.1)
(1.1)
At 31 December 2023
1.6
3.2
4.8
Depreciation
At 1 January 2023
0.9
3.4
4.3
Charge for the year
0.2
0.4
0.6
Disposals
–
(1.1)
(1.1)
At 31 December 2023
1.1
2.7
3.8
Net book value
At 31 December 2023
0.5
0.5
1.0
Cost
At 1 January 2024
1.6
3.2
4.8
Additions
–
0.3
0.3
Disposals
(0.1)
(1.7)
(1.8)
At 31 December 2024
1.5
1.8
3.3
Depreciation
At 1 January 2024
1.1
2.7
3.8
Charge for the year
0.2
0.4
0.6
Disposals
(0.1)
(1.7)
(1.8)
At 31 December 2024
1.2
1.4
2.6
Net book value
At 31 December 2024
0.3
0.4
0.7
15. Other intangible assets
Internally
Computer generated
£m software
software
Total
Cost
At 1 January 2023
1.7
4.3
6.0
Additions
–
2.8
2.8
At 31 December 2023
1.7
7.1
8.8
Amortisation
At 1 January 2023
1.0
2.1
3.1
Charge for the period
0.1
0.6
0.7
At 31 December 2023
1.1
2.7
3.8
Net book value
At 31 December 2023
0.6
4.4
5.0
Cost
At 1 January 2024
1.7
7.1
8.8
Additions
–
5.3
5.3
Disposals
(0.7)
–
(0.7)
At 31 December 2024
1.0
12.4
13.4
Amortisation
At 1 January 2024
1.1
2.7
3.8
Charge for the period
0.2
0.8
1.0
Disposal
(0.7)
–
(0.7)
At 31 December 2024
0.6
3.5
4.1
Net book value
At 31 December 2024
0.4
8.9
9.3
Significant movement in other intangible assets
During 2024, Alfa developed new internally generated software at a cost of £5.3m (2023: £2.8m).
This software will be amortised over three to five years.
The total research and product development expense for the period was £2.3m (2023: £3.1m).
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
18. Deferred income tax
The provision for deferred tax consists of the following deferred tax assets/(liabilities) relating to
accelerated capital allowances and short-term timing differences in relation to accruals and share-
based payments.
£m
2024
2023
Balance as at 1 January
0.3
1.6
Effect of changes in tax rates
–
(0.1)
Deferred income taxes recognised in the consolidated statement of
profit or loss and comprehensive income
(1.2)
(0.7)
Deferred tax on share-based payments recognised in reserves
0.4
(0.5)
Balance as at 31 December
(0.5)
0.3
Consisting of:
Depreciation in excess of capital allowances
–
(0.1)
Capital allowances in excess of depreciation
0.1
–
Other timing differences
(0.6)
0.4
Balance as at 31 December
(0.5)
0.3
Deferred income tax liabilities have not been recognised for the withholding tax and other taxes
that would be payable on the unremitted earnings of certain subsidiaries as the Group is able to
control the timing of these temporary differences and it is probable that they will not reverse in
the foreseeable future. Unremitted earnings totalled £2.7m at 31 December 2024 (2023: £5.5m).
At the reporting date, the provision for deferred tax comprised net deferred tax assets relating to
overseas group companies of £0.5m (20023: £0.3m) and net deferred tax liabilities relating to the
UK of £(1.0)m (2023: nil). The net deferred tax liabilities relating to the UK is comprised mainly of a
deferred tax liability in relation to accelerated tax deductions for capitalised intangibles of £(2.3)m
(2023: £(1.1)m) and a deferred tax asset in relation to share options of £0.9m (2023: £0.6m).
17. Right-of-use assets
£m
Motor vehicles
Property
Total
Cost
At 1 January 2023
0.5
10.9
11.4
Additions
0.2
–
0.2
At 31 December 2023
0.7
10.9
11.6
Depreciation
At 1 January 2023
0.3
4.0
4.3
Charge for the year
0.2
1.0
1.2
At 31 December 2023
0.5
5.0
5.5
Net book value
At 31 December 2023
0.2
5.9
6.1
Cost
At 1 January 2024
0.7
10.9
11.6
Additions*
0.3
2.4
2.7
Disposals
(0.3)
–
(0.3)
At 31 December 2024
0.7
13.3
14.0
Depreciation
At 1 January 2024
0.5
5.0
5.5
Charge for the year
0.1
1.0
1.1
Disposals
(0.3)
–
(0.3)
At 31 December 2024
0.3
6.0
6.3
Net book value
At 31 December 2024
0.4
7.3
7.7
* Additions to property in the year relate primarily to the extension of the lease (a lease modification) to the UK office at
Moor Place, 1 Fore Street Avenue, London, EC2Y 9DT, UK.
The Group recognised the following amounts in the consolidated statement of profit or loss and
comprehensive income in relation to leases under IFRS 16:
£m
2024
2023
Depreciation
(1.1)
(1.2)
Interest expense
(0.6)
(0.4)
Short-term lease expense
–
(0.1)
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
20. Trade receivables
£m
2024
2023
Trade receivables
8.6
5.6
Provision for impairment
–
–
Trade receivables – net
8.6
5.6
Ageing of trade receivables
Ageing of net trade receivables £m
2024
2023
Within agreed terms
8.1
5.0
Past due 1-30 days
0.5
0.6
Past due 31-90 days
–
–
Past due 91+ days
–
–
Trade receivables – net
8.6
5.6
The Group believes that the amounts that are past due are fully recoverable as there are no
indicators of future delinquency or potential litigation.
Currency of trade receivables
£m
2024
2023
GBP
3.0
2.6
USD
4.8
2.4
Other
0.8
0.6
Trade receivables – net
8.6
5.6
Trade receivables due from significant customers
There were no customers with revenue accounting for more than 10% of total revenue in 2024
and 2023.
Impairment and risk exposure
Information about the impairment of trade receivables and the Group’s exposure to market risk
(specifically foreign currency risk) and credit risk can be found in note 3.
19. Interests in joint venture
In 2020, the Group invested £0.4m in Alfa iQ consisting of: a capital contribution of £0.3m; and
an interest-free loan fair valued at £0.1m. In 2023, the activity in the Alfa iQ joint venture ceased
and the company was placed into Members Voluntary Liquidation in 2024.
At 31 December 2024 and 31 December 2023 the investment is carried at £nil and the loan is
carried at £nil.
Investment
£m
2024
2023
Carrying amount as at 1 January
–
0.1
Other movements
–
0.1
Share of net loss from the joint venture
–
(0.2)
Carrying amount as at 31 December
–
–
Loan to joint venture
£m
2024
2023
Carrying amount as at 1 January
–
0.1
Loan write off
–
(0.1)
Carrying amount as at 31 December
–
–
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
23. Current and non-current liabilities
£m
2024
2023
Trade payables
1.0
0.5
Other payables
10.7
9.5
Contract liabilities – deferred licence and fees
8.1
8.0
Contract liabilities – deferred maintenance
7.6
6.2
Deferred tax liability
1.0
–
Lease liabilities (note 24)
9.3
8.2
Provisions for other liabilities (note 25)
0.8
0.7
Total current and non-current liabilities
38.5
33.1
Less non-current portion
(11.0)
(7.5)
Total current liabilities
27.5
25.6
Other payables includes amounts relating to other tax and social security of £3.3m (2023: £2.0m).
Of the remainder, £5.8m (2023: £5.4m) relates to amounts due as part of payroll.
24. Lease liabilities
The following table sets out the reconciliation of the lease liabilities from 1 January 2023 to the
amount disclosed at 31 December 2024:
£m
Total
Lease liabilities recognised at 1 January 2023
9.3
Additions
0.2
Interest charge
0.4
Payments made on lease liabilities
(1.7)
At 31 December 2023
8.2
Additions
2.4
Interest charge
0.6
Payments made on lease liabilities
(1.9)
At 31 December 2024
9.3
Additions to lease liabilities include extensions to existing lease agreements. In 2024 there was an
extension of the lease (a lease modification) to the UK office at Moor Place, 1 Fore Street Avenue,
London, EC2Y 9DT, UK.
Total lease payments in 2024 were £1.9m (2023: £1.8m).
21. Other receivables held at amortised cost
£m
2024
2023
Accrued income
4.7
4.6
Prepayments
4.9
3.8
Corporation tax recoverable
2.8
1.9
Other receivables
0.3
0.3
Total other receivables held at amortised cost
12.7
10.6
Accrued income represents fees earned, but not invoiced, at the reporting date, which have no
right of offset with contract liabilities – deferred licence amounts.
Prepayments include £1.0m of deferred costs in relation to costs to fulfil contracts (2023: £1.3m).
During the year £0.3m (2023: £0.2m) relating to costs to fulfil contracts has been recognised
within cost of sales.
Corporation tax recoverable at the reporting date of £2.8m (2023: £1.9m) represents
predominately UK tax of £2.3m (2023: £1.9m), due to be refunded on the submission of (i) the
R&D-related claims for 2023 and 2024 and (ii) the 2024 corporation tax return. An additional
amount of £0.4m (2023: £0.5m) relates to RDEC recoverable.
22. Cash and cash equivalents
£m
2024
2023
Cash at bank and in hand
20.5
21.8
Cash and cash equivalents
20.5
21.8
Currency of cash and cash equivalents
£m
2024
2023
GBP
8.6
13.5
USD
6.1
3.4
AUD
2.1
1.8
EUR
2.5
2.2
Other
1.2
0.9
Cash and cash equivalents
20.5
21.8
Cash and cash equivalents are all held with banks and other financial instructions which must
fulfil credit rating and investment criteria approved by the Board.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
26. Share capital
2024
2023
Issued and fully paid
Shares
£m
Shares
£m
Ordinary shares – 0.1 pence
300,000,000
0.3
300,000,000
0.3
Balance as at 31 December
300,000,000
0.3
300,000,000
0.3
No additional shares have been issued or cancelled in 2024 or 2023.
27. Translation reserve
£m
2024
2023
At 1 January
0.2
0.4
Currency translation of subsidiaries
(0.1)
(0.2)
At 31 December
0.1
0.2
28. Own shares
£m
2024
2023
Balance at 1 January
8.7
7.5
Acquired in the year
0.7
4.8
Distributed on exercise of options
(1.5)
(3.6)
Balance at 31 December
7.9
8.7
The own shares reserve represents the cost of shares in Alfa Financial Software Holdings PLC that
have been:
• Purchased in the market and held by the Group’s EBT to satisfy options under the Group’s share
options plans. The number of shares held as at 31 December 2024 was 83,904 (31 December
2023: 721,036); and
• Purchased in the market and held by the Group as a result of the share buy-back programme
that was launched on 18 January 2022 and ended on 30 June 2023. The number of shares held
at 31 December 2024 was 4,775,119 (31 December 2023: 4,775,119).
Own shares distributed relates to shares distributed to employees from the EBT for bonus awards
under share schemes. As at 31 December 2024, the Group held 1.62% (31 December 2023: 1.84%)
of its own called-up share capital.
24. Lease liabilities continued
Below is the maturity analysis of the lease liabilities:
£m
2024
2023
Non-current
9.2
6.8
Current
0.1
1.4
Total lease liabilities
9.3
8.2
No later than one year
0.8
1.7
Between one year and five years
6.6
6.2
Later than five years
6.0
1.4
Total future lease payments
13.4
9.3
Total future interest payments
(4.1)
(1.1)
Total lease liabilities
9.3
8.2
The movement during the year in lease liabilities is set out above. Movements in cash and cash
equivalents are set out in the cash flow statement. These are the only changes in liabilities arising
from financing activities in the year.
25. Provision for other liabilities
£m
At 1 January 2023
0.9
Provided in the period
0.2
Utilised in the period
(0.4)
Released in the period
–
At 31 December 2023
0.7
Provided in the period
0.4
Utilised in the period
(0.3)
Released in the period
–
At 31 December 2024
0.8
Provisions for other liabilities comprise amounts for office dilapidations and employer taxes on
share-based payments. It is expected that these will be utilised as follows: £0.3m in 2035 and
£0.5m over various years.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
29. Share awards
The Group recognised total expenses relating to share-based payment of £1.4m (2023: £1.6m) in the current year. Of this, £1.1m (2023: £1.3m) relates to equity-settled LTIP schemes and £0.3m
(2023: £0.3m) relates to Employee ShareSave schemes. See further detail below.
The outstanding share schemes are made up of the following:
Share options Share options
Exercise 31 December 31 December
Grant date
Condition type
Plan
Vesting date
price 2024 2023
April 2021
Service and Performance
LTIP
April 2024
0p
–
1,070,668
November 2021
Service Only
LTIP
October 2024
0p
–
60,872
November 2021
Service Only
UK Employee ShareSave
January 2025
153.6p
168,146
172,832
November 2021
Service Only
US Employee ShareSave
January 2024
167.0p
–
40,323
April 2022
Service and Performance
LTIP
April 2025
0p
741,162
741,162
April 2022
Service Only
LTIP
April 2025
0p
231,290
237,965
April 2022
Service Only
US Employee ShareSave
June 2024
141.1p
–
27,727
May 2022
Service Only
UK Employee ShareSave
June 2025
132.8p
211,673
214,383
September 2022
Service Only
LTIP
September 2025
0p
5,917
5,917
April 2023
Service and Performance
LTIP
April 2026
0p
913,963
913,963
April 2023
Service Only
LTIP
April 2026
0p
374,948
383,814
April 2023
Service Only
UK Employee ShareSave
June 2026
109.6p
841,071
857,493
April 2023
Service Only
US Employee ShareSave
June 2025
116.5p
54,960
54,960
April 2024
Service and Performance
LTIP
April 2027
0p
720,024
–
April 2024
Service Only
LTIP
April 2027
0p
342,774
–
April 2024
Service Only
US Employee ShareSave
June 2026
146.0p
30,274
–
May 2024
Service Only
UK Employee ShareSave
June 2027
137.4p
194,657
–
September 2024
Service Only
LTIP
September 2027
0p
3,164
–
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
29.1 LTIPs
The 2021 April and 2021 November LTIP awards vested during the year. The exercise of these
awards had a net impact of £0.8m on own shares and £1.5m on retained earnings.
The 2022 April and 2023 April LTIP awards (service and performance conditions) are conditional
on performance conditions, 50% based on EPS performance (non-market condition) and 50% on
TSR (market condition) as well as a three-year employment fulfilment. The fair value of these
awards has been determined using the Monte Carlo model. An estimate is made for the awards
which are linked to EPS based on the expectation of achievement of EPS conditions at the end of
each accounting period.
The 2022 April LTIP awards, the 2022 September LTIP awards and the 2023 April LTIP awards
(service conditions) are conditional on employment only. The fair value of these awards is equal to
the closing share price on the date of grant, discounted by the expected 12-month dividend yield
to reflect the lack of dividend accrual over the vesting period. The expected price volatility is
based on the historical volatility (based on the remaining life of the scheme), adjusted for any
expected changes to future volatility due to publicly available information.
The 2024 April LTIP awards (service and performance conditions plan) are granted conditional
on performance conditions, 50% based on EPS performance (non-market condition) and 50%
on TSR (market condition) as well as a three-year employment fulfilment. For those awards with
market-related vesting conditions, the fair value has been determined using the Monte Carlo
valuation model at the grant date. For awards issued with EPS (non-market) performance vesting
conditions, the fair value of the underlying option is equal to the grant date share price discounted
by the expected dividend yield to reflect the lack of dividend accrual over the vesting period. An
estimate is made for the awards which are linked to EPS based on the expectation of achievement
of EPS conditions at the end of each accounting period. The following table lists the inputs to the
model used for the awards granted in the year ended 31 December 2024 based on information at
the date of grant:
LTIP awards (granted in April)
TSR element
EPS element
Share price at date of grant
171.2p
171.2p
Award price
0p
0p
Volatility
44.0%
–
Embedded TSR
12.5%
–
Average correlation
15.1%
–
Life of award
3 years
3 years
Risk-free rate
4.00%
–
Fair value per award
100.7p
151.6p
29. Share awards continued
The weighted average share price at the date of exercise for share options exercised during the
period was 177.4 pence (2023: 161.7 pence). The options outstanding at 31 December 2024 had
a weighted average exercise price of 38.0 pence (2023: 34.7 pence), and a weighted average
remaining contractual life of 1.5 years (2023: 1.5 years).
The opening weighted average exercise price at 1 January 2024 was 34.7 pence (1 January
2023: 27.1 pence). The weighted average exercise price of options forfeited and exercised during
the year was 146.5 pence (31 December 2023: 161.2 pence). The expected price volatility is based
on the historical volatility adjusted for any expected changes to future volatility due to publicly
available information.
The weighted average exercise price of options granted in the period is 24.1 pence
(2023: 45.4 pence).
The total share-based payment charge relating to Alfa Financial Software Holdings PLC shares for
the year is split as follows:
£m
2024
2023
Employee share schemes – value of services
1.1
1.5
Expense in relation to fair value of social security liability on
employee share schemes
0.3
0.1
Total cost of employee share schemes
1.4
1.6
Details of the share options outstanding during the year are as follows:
2024
2023
Outstanding at 1 January
4,782,079
5,473,851
Conditionally awarded in year
1,290,893
2,210,230
Exercised
(977,712)
(2,322,473)
Forfeited or expired in year
(261,237)
(579,529)
Outstanding at 31 December
4,834,023
4,782,079
Exercisable at the end of the year
–
–
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
The inputs used in the calculation of the fair value of options granted in the year were as follows:
SAYE ESPP
31 December 31 December
2024 2024
Share price
171.2p
171.2p
Exercise price
137.4p
146.0p
Expected volatility
44.5%
42.6%
Expected life
36 months
24 months
Risk-free rate
4.13%
4.10%
Expected dividend yields
4.0%
4.0%
Fair value per award
57.3p
48.5p
30. Unrecognised items
30.1 Contingencies and commitments
The Group has no capital commitments, no material contingent liabilities and no
contingent assets.
30.2 Events occurring after the reporting period
There have been no reportable subsequent events.
31. Dividends
A special dividend of 2. 0 pence per share was paid on 30 May 2024 amounting to £5.9m
(2023: £4.4m at 1.5 pence per share).
An ordinary dividend of 1.3 pence per share was paid on 27 June 2024 amounting to £3.8m
(2023: £3.5m at 1.2 pence per share).
A special dividend of 4.2 pence per share was paid on 8 November 2024 amounting to £12.4m
(2023: £11.8m at 4.0 pence per share).
Subject to approval at the AGM on 30 April 2025, a 2024 final dividend of 1.4 pence per share will
be paid on 27 June 2025 to holders on the register on 30 May 2025. The ordinary shares will be
quoted ex-dividend on 29 May 2025. In addition, the Board has decided to declare a special
dividend of 2.4 pence per share, with an ex-dividend date of 1 May 2025, a record date of 2 May
2025 and a payment date of 30 May 2025.
29. Share awards continued
29.1 LTIPs continued
In April 2024, the Group awarded to certain employees an LTIP conditional on employment
only. The fair value of these awards on the date of grant is 151.6 pence, discounted by the
expected 12-month dividend yield to reflect the lack of dividend accrual over the vesting period
(three years).
In September 2024, the Group awarded to certain employees an LTIP conditional on employment
only. Given the small number of share options awarded in these awards, the fair value of these
awards on the date of grant was assumed to be the same as that for the April 2024 awards
mentioned above, i.e. 151.6 pence.
All of these Company schemes, as well as any non-cyclical awards, are equity-settled by award
of ordinary shares.
29.2 Employee ShareSave Scheme
The Group has in place an Employee ShareSave Scheme – the Save As You Earn (SAYE) scheme
in the UK and Employee Stock Purchase Plan (ESPP) scheme in the USA. Under these schemes,
eligible employees can save up to a set limit each month. At the end of the savings period (three
years for SAYE and two years for ESPP), employees can choose whether or not they wish to buy
the shares at the option price or take back their savings as cash. The option price is the share
price at the start of the plan with a 20% discount for the UK scheme and 15% discount for the
US scheme. The fair value of these awards has been determined using the Black Scholes model
at the grant date.
31 December 2024
SAYE
ESPP
Number of Exercise Number of Exercise
share options price share options price
Outstanding at beginning of year
1,244,708
119.7p
123,010
138.6p
Conditionally awarded in year
194,657
137.4p
30,274
146.0p
Exercised during the year
–
–
(25,118)
141.1p
Forfeited or expired in year
(23,818)
120.9p
(42,932)
142.7p
Outstanding at the end of the year
*
1,415,547
122.1p
85,234
127.0p
Exercisable at the end of the year
–
–
–
–
* The exercise price is a weighted average.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
32. Related parties
32.1 Controlling shareholder
The ultimate parent undertaking as at 31 December 2024 was CHP Software and Consulting Holdings Limited (the ‘ultimate parent’), being the parent undertaking of the smallest and largest group in
relation to these consolidated financial statements. At 31 December 2023 the immediate and ultimate parent undertaking was CHP Software and Consulting Limited. The change in the year was due to
an internal reorganisation within the CHP group. The ultimate controlling party is Andrew Page.
32.2 Basis of consolidation
The principal subsidiaries and joint ventures of the Group and the Group percentage of equity capital are set out below. All these are consolidated within the Group’s financial statements with the
exception of Alfa iQ which is accounted for using the equity method.
Held by Held by Held by Held by
Company Group Company Group
Registered address and country of incorporation
Principal activity
2024 2024 2023 2023
Alfa Financial Software Group Limited
Moor Place, 1 Fore Street Avenue, London, EC2Y 9DT, UK
Holding company
100%
100%
100%
100%
Alfa Financial Software Limited
Moor Place, 1 Fore Street Avenue, London, EC2Y 9DT, UK
Software and services
–
100%
–
100%
Alfa Financial Software Inc
124
E Hudson Ave, Royal Oak, MI 48067, United States
Software and services
–
100%
–
100%
Alfa Financial Software Australia Lisgar House, Level 3, 32 Carrington Street, Sydney, NSW,
Services
–
100%
–
100%
Pty Limited
20
00, Australia
Alfa Financial Software NZ Limited
Level 1 Building B, 600 Great South Road, Greenlane, Auckland 1051,
Services
–
100%
–
100%
New Zealand
Alfa Financial Software GmbH
Bockenheimer Landstraße. 20, 60323 Frankfurt am Main, Germany
Software and services
–
100%
–
100%
Alfa Financial Software
Moor Place, 1 Fore Street Avenue, London, EC2Y 9DT, UK
Software and services
–
100%
–
100%
International Limited
Alfa AI Limited
Moor Place, 1 Fore Street Avenue, London, EC2Y 9DT, UK
Services
–
100%
–
100%
Alfa iQ Limited*
30 Finsbury Square, London, EC2A 1AG, UK
Software and services
–
51%
–
51%
* The activity in the Alfa iQ joint venture ceased in late 2023 and the company was placed into Members Voluntary Liquidation in 2024. The registered address prior to the liquidation was Moor Place, 1 Fore Street Avenue, London, EC2Y 9DT, UK.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
33. Offsetting assets and liabilities
Assets and liabilities are offset and the net amount is reported in the consolidated statement of
financial position where Alfa currently has a legally enforceable right to offset the recognised
amounts, and there is an intention to realise the asset and settle the liability simultaneously.
The following table presents the recognised assets and liabilities that are offset as at 31 December
2024 and 31 December 2023 in the consolidated statement of financial position.
31 December 2024 Gross Amounts Net amounts
£m amounts offset presented
Accrued income
5.1
(0.4)
4.7
Contract liabilities – deferred licence
(8.5)
0.4
(8.1)
31 December 2023 Gross Amounts Net amounts
£m amounts offset presented
Accrued income
5.5
(0.9)
4.6
Contract liabilities – deferred licence
(8.9)
0.9
(8.0)
32. Related parties continued
32.3 Transactions with related parties
Full details of the Directors’ compensation and interests are set out in the Directors’
Remuneration Report from page 83. See note 8 for further detail on remuneration of key
management (including Directors).
Dividends to the amount of £12.4m were paid to the ultimate parent (2023: £11.8m).
Dividends of 2.0 pence, 1.3 pence and 4.2 pence per share were paid to all shareholders in 2024
(2023: 1.5 pence, 1.2 pence and 4.0 pence per share). Directors and other key management
received dividends based on their beneficial interest in the shares of the Company. Directors’
beneficial interests in the shares of the Company are disclosed in the Remuneration Report on
page 95.
In 2020 the Group invested £0.4m in Alfa iQ consisting of: a capital contribution of £0.3m; and an
interest-free loan fair valued at £0.1m. In 2023, the activity in the Alfa iQ joint venture ceased and
the company was placed into Members Voluntary Liquidation in 2024. Therefore, at 31 December
2024 the investment is carried at £nil (2023: £nil) and the loan is carried at £nil (2023: £nil).
In 2024 Alfa Financial Software Limited paid expenses of £0.1m on behalf of Alfa iQ Limited.
In 2023, Alfa Financial Software Limited paid expenses of £0.1m on behalf of Alfa iQ Limited and
these were fully recharged back to Alfa iQ Limited at no mark up.
In 2024, expenses relating to property of £0.02m (2023: £0.04m) were paid on behalf of the
ultimate parent and these were fully recharged back to the ultimate parent at no mark up.
In 2023, two debentures were sold to the ultimate parent for £0.2m. The transaction was at arm’s
length. No such transaction took place in 2024.
The balances outstanding from the ultimate parent at 31 December 2024 and 2023 were £nil and
£nil respectively.
There were no other outstanding balances from related parties at the end of the reporting period.
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Notes to the consolidated financial statements for the year ended 31 December 2024 continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
£m Note 2024 2023
Assets
Non-current assets
Investment in subsidiary companies 4 430.7 429.8
Total non-current assets 430.7 429.8
Current assets
Amounts owed by subsidiaries 7 0.6 –
Other receivables 5 0.5 0.7
Cash and cash equivalents 6 0.1 0.1
Total current assets 1.2 0.8
Total assets 431.9 430.6
Liabilities and equity
Current liabilities
Amounts owed to subsidiaries 7 – 1.3
Trade and other payables 8 0.8 0.6
Accruals 0.4 0.4
Total current liabilities 1.2 2.3
Non-current liabilities
Provisions 8 0.2 0.2
Total non-current liabilities 0.2 0.2
Total liabilities 1.4 2.5
Capital and reserves
Ordinary shares 9 0.3 0.3
Own shares 10 (7.9) (8.7)
Retained earnings 438.1 436.5
Total equity 430.5 428.1
Total liabilities and equity 431.9 430.6
Retained earnings includes a profit of £24.1m for the 2024 financial year (2023: £25.7m). See the statement of changes in equity on the next page for further detail.
The Company has taken advantage of the exemption under section 408 of the Companies Act 2006 from presenting its own profit and loss account. The above Company statement of financial
position should be read in conjunction with the accompanying notes.
The Company financial statements on pages 151 to 157 were approved and authorised for issue by the Board of Directors on 12 March 2025 and signed on its behalf by:
Andrew Denton
Chief Executive Officer
Duncan Magrath
Chief Financial Officer
Alfa Financial Software Holdings PLC – Registered number: 10713517
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Company statement of financial position
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
£m Note
Called-up
share capital
Own
shares
Retained
earnings Total equity
Balance as at 1 January 2023 0.3 (7.5) 432.4 425.2
Total comprehensive profit for the period – – 25.7 25.7
Employee share schemes – value of employee services 11 – – 1.5 1.5
Dividends 12 – – (19.7) (19.7)
Own shares distributed 10 – 3.6 (3.4) 0.2
Own shares acquired 10 – (4.8) – (4.8)
Balance as at 31 December 2023 0.3 (8.7) 436.5 428.1
Total comprehensive profit for the period – – 24.1 24.1
Employee share schemes – value of employee services 11 – – 1.1 1.1
Dividends 12 – – (22.1) (22.1)
Own shares distributed 10 – 1.5 (1.5) –
Own shares acquired 10 – (0.7) – (0.7)
Balance as at 31 December 2024 0.3 (7.9) 438.1 430.5
The above Company statement of changes in equity should be read in conjunction with the accompanying notes.
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Company statement of changes in equity
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
The Company exercises control over the EBT because it is exposed to, and has a right to, variable
returns from this trust and is able to use its power over the trust to affect those returns.
Therefore, the trust is consolidated by the Company.
1.2 Investments in subsidiaries
Subsidiaries are all entities over which the Company has control. The Company controls an entity
when the Company is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the entity.
Unless otherwise stated, subsidiaries have share capital consisting solely of ordinary shares,
andthe proportion of ownership interests held equals the voting rights held by the Company.
Thecountry of incorporation or registration is also each subsidiary’s principal place of business.
Investments in subsidiary undertakings are stated at cost, including those costs associated
withthe acquisitions, less provision for any impairment in value. Where events or changes in
circumstances, including an adverse movement in the share price, indicate that the carrying
amount of an investment may not be recoverable, an impairment review is performed.
Animpairment write-down is recognised to the extent that the carrying amount of the asset
exceeds the higher of the fair value less cost to sell and value in use.
Any subsidiary undertakings sold or acquired during the year are included up to, or from, the
dates of change of control. Where control of a subsidiary is lost, it is recognised in the profit
orloss.
Amounts due to and from subsidiaries are unsecured, interest-free and repayable on demand.
The carrying amounts of such payables and receivables are considered to be the same as their
fair values due to their short-term nature.
1.3 Financial assets
Basic financial assets, including trade and other receivables, cash and bank balances and other
receivables, are initially recognised at transaction price, unless the arrangement constitutes
afinancing transaction.
At the end of each reporting period, financial assets measured at amortised cost are assessed for
objective evidence of impairment. If an asset is impaired, the impairment loss is the difference
between the carrying amount and the present value of the estimated cash flows discounted at
the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
1. Summary of significant accounting policies
Alfa Financial Software Holdings PLC is a public company limited by shares and is incorporated
and domiciled in England. These financial statements are the separate financial statements for
the Company.
The registered office is Moor Place, 1 Fore Street Avenue, London, EC2Y 9DT, United Kingdom.
Theregistered number of Alfa is 10713517.
The principal activity of the Company is as a holding company.
1.1 Statement of compliance and basis of preparation
The financial statements of Alfa Financial Software Holdings PLC have been prepared in
compliance with Financial Reporting Standard 102, the Financial Reporting Standard applicable
inthe United Kingdom and the Republic of Ireland (FRS 102) and the Companies Act 2006.
The principal accounting policies applied in the preparation of these financial statements are set
out in note 1 to the consolidated financial statements. These policies have been consistently
applied to the years presented, unless otherwise stated.
These financial statements have been prepared on a going concern basis, under the historical
cost convention. The Directors have used the going concern principle on the basis that the current
profitable financial projections of the Company and its subsidiaries indicate they will continue in
operation for the foreseeable future. As described in note 1.1 to the consolidated financial
statements, this assessment includes downside stress testing in line with FRC guidance.
The Company financial statements have been prepared in pounds sterling which is the functional
and presentational currency of the Company and have been presented to the nearest £0.1m
unless otherwise stated.
As permitted by FRS 102, the Company has taken advantage of the disclosure exemptions
available under that standard in relation to financial instruments, presentation of a cash flow
statement, share-based payments, the aggregate remuneration of key management personnel
and related party transactions with other wholly owned members of the Group.
The Company meets the definition of a qualifying entity under FRS 102. Where required,
equivalent disclosures are given in the Group accounts of Alfa Financial Software Holdings PLC.
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Notes to the Company financial statements for the year ended 31 December 2024
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2. Critical accounting judgements and key sources of estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under
the circumstances. The resulting accounting estimates will, by definition, seldom equal the related
actual results.
The inputs applied in the impairment review for the value-in-use calculation for the investments
in subsidiaries are considered to be a key source of estimation uncertainty. Refer to note 4 for
more details.
There were no other critical accounting judgements that would have a significant effect on the
amounts recognised in the parent company financial statements or key sources of estimation
uncertainty at the reporting date that would have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year.
3. Financial risk management
The Company’s exposure to financial risks is managed as part of the Group’s financial risk
management. Full details about the Group’s exposure to financial risks and how these risks
couldaffect the Group’s future financial performance are given in note 3 to the consolidated
financial statements.
1. Summary of significant accounting policies continued
1.4 Financial liabilities
Basic financial liabilities, including trade and other payables and trading balances and loans from
subsidiaries, are initially recognised at transaction price, unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of the future
receipts discounted at a market rate of interest. The Company derecognises financial liabilities
when, and only when, the Company’s obligations are discharged, cancelled or expired.
Other payables are initially recorded at fair value and subsequently measured at amortised cost.
As the total carrying amount is due within the next 12 months from the balance sheet date, the
impact of applying the effective interest method is not significant and, therefore, the carrying
amount equals to the contractual amount or the fair value initially recognised.
Payables are classified as current liabilities if payment is due within one year or less.
1.5 Equity
Ordinary shares
Ordinary shares are classified as equity. There are no restrictions on the distribution of capital
and the repayment of capital.
Own shares
Own shares represent the shares of Alfa Financial Software Holdings PLC that are either held by
the EBT, or acquired by the Company as part of its share buy-back programme (see note 28 to the
consolidated financial statements). Own shares are recorded at cost and deducted from equity.
1.6 Employee share schemes
Grants made to subsidiary employees will not result in a charge recognised in the income
statement. Any charges for share-based payments are recognised as an increase in the cost of
investment in subsidiaries (as a capital contribution). For full details of the Group’s share-based
payments, refer to note 29 to the consolidated financial statements.
1.7 Dividends
Dividends are recognised through equity when approved by Alfa’s shareholders or on payment,
whichever is earlier.
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Notes to the Company financial statements for the year ended 31 December 2024 continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
7. Amounts owed by and to subsidiaries
£m 2024 2023
Amounts owed by subsidiaries 0.6 –
Total amounts owed by subsidiaries 0.6 –
All amounts owed by subsidiaries are current. They relate primarily to recharges to Alfa Financial
Software Limited from the Company for expenses incurred (2023: £nil).
£m 2024 2023
Amounts owed to subsidiaries – 1.3
Total amounts owed to subsidiaries – 1.3
All amounts owed to subsidiaries in 2023 were current. The £1.3m in 2023 related primarily to
cash advanced by Alfa Financial Software Limited to the Company for operating costs payments.
8. Payables and provision for other liabilities
Trade and other payables relate to trade creditors of £0.2m (2023: £0.1m) and salary costs of
£0.6m (2023: £0.5m).
The long-term provision relates to the employer national insurance liability of £0.2m for the share
schemes (2023: £0.2m).
9. Called-up share capital
Each ordinary share has a par value of 0.1 pence. All shares are fully paid and have equal
votingrights.
Issued and fully paid Shares – ordinary £m
At 31 December 2024 300,000,000 0.3
At 31 December 2023 300,000,000 0.3
4. Investments in subsidiaries
£m 2024 2023
Cost
As at 1 January 429.8 428.7
Capital contributions to subsidiaries (see note 1.6) 0.9 1.1
As at 31 December 430.7 429.8
The carrying amount of the investment is £430.7m at 31 December 2024 (2023: £429.8m). The
recoverable amount of the investment was determined based on value-in-use calculations using
cash flow projections of the Company and its subsidiaries from financial budgets and forecasts
for a five-year period using a pre-tax discount rate of 10.4% (2023: 10.4%). Cash flows beyond
these periods have been extrapolated using a steady 2.5% (2023: 2.7%) average growth rate which
is reflective of management’s best estimate at the time. In addition, the market capitalisation of
the Company as at 31 December 2024 was £633m. As the recoverable amount, and the market
capitalisation of the Company, are in excess of the carrying amount of the investment, no
impairment charge has been recognised during the current financial year.
5. Other receivables
At 31 December 2024, other receivables relate to prepayments of £0.4m (2023: £0.4m) and VAT
receivables of £0.1m (2023: £0.3m).
6. Cash and cash equivalents
£m 2024 2023
Cash and cash equivalents 0.1 0.1
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Notes to the Company financial statements for the year ended 31 December 2024 continued
Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
12. Dividends
A special dividend of 2.0 pence per share was paid on 30 May 2024 amounting to £5.9m
(2023: £4.4m at 1.5 pence per share).
An ordinary dividend of 1.3 pence per share was paid on 27 June 2024 amounting to £3.8m
(2023: £3.5m at 1.2 pence per share).
A special dividend of 4.2 pence per share was paid on 8 November 2024 amounting to £12.4m
(2023: £11.8m at 4.0 pence per share).
Subject to approval at the AGM on 30 April 2025, a 2024 final dividend of 1.4 pence per share will
be paid on 27 June 2025 to holders on the register on 30 May 2025. The ordinary shares will be
quoted ex-dividend on 29 May 2025. In addition, the Board has decided to declare a special
dividend of 2.4 pence per share, with an ex-dividend date of 1 May 2025, a record date of 2 May
2025 and a payment date of 30 May 2025.
10. Own shares
£m 2024 2023
Balance at 1 January 8.7 7.5
Acquired in the year 0.7 4.8
Distributed on exercise of options (1.5) (3.6)
Balance at 31 December 7.9 8.7
The own shares reserve represents the cost of shares in Alfa Financial Software Holdings PLC
purchased in the market and held by the Company’s EBT and by the Company as aresult of its
share buy-back programme (see note 1.2 of the consolidated financial statements).
The number ofown shares held by the EBT at 31 December 2024 was 83,904 (2023: 721,036).
Thenumber ofown shares held at 31 December 2024 by the Company as a result of its share
buy-back programme was 4,775,119 (2023: 4,775,119).
As at 31 December 2024, the Company held 1.62% (2023: 1.84%) of its own called-up share capital.
11. Employee share schemes
Under the rules of the Company’s LTIP plans, selected employees of the Company’s subsidiary
were granted awards in the form of nil cost options over ordinary shares in Alfa.
In addition, employees of the Company’s subsidiary that met the set criteria were invited to join
aShareSave Scheme – the SAYE scheme for the UK employees and the ESPP scheme for the
USemployees. Under these schemes, eligible employees can save up to a set limit each month
and, at the end of the vesting period, can use these savings to buy ordinary shares in Alfa
(atadiscount) or take these back as cash.
Refer to note 29 of the consolidated financial statements for more detail on these schemes.
Thecost of the share-based remuneration is passed to the relevant subsidiary.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
13. Directors’ remuneration
The Company has no employees other than the Directors. Full details of the Directors’
compensation and interests are set out in the Directors’ Remuneration Report from page 83.
14. Events occurring after the reporting period
There have been no reportable subsequent events.
15. Related party and ultimate controlling party
The Company has taken advantage of the exemption under FRS 102:33.1A from disclosing
transactions with other members of the Group.
The immediate and ultimate parent undertaking as at 31 December 2024 was CHP Software and
Consulting Holdings Limited, which was the parent undertaking of the smallest and largest group
to consolidate these financial statements. At 31 December 2023 the immediate and ultimate
parent undertaking was CHP Software and Consulting Limited. This change in the year was due to
an internal reorganisation within the CHP group.
The registered office of the immediate and ultimate parent undertaking is Moor Place, 1 Fore
Street Avenue, London EC2Y 9DT and copies of the financial statements of the ultimate parent can
be obtained from this address. The ultimate controlling party is Andrew Page.
See a full listing of the Company’s subsidiaries and joint venture in note 32.2 of the consolidated
financial statements.
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Income
2024 2023 2022 2021 2020
Revenue £m 109.9 102.0 93.3 83.2 78.9
Operating profit £m 34.3 30.1 29.6 24.7 23.9
Operating profit margin % 31% 30% 32% 30% 30%
Profit before tax £m 34.1 29.6 28.9 23.8 23.2
Tax £m (8.5) (6.1) (4.4) (4.6) (2.9)
Profit for the year £m 25.6 23.5 24.5 19.2 20.3
Operating free cash flow conversion % 89% 115% 102% 114% 114%
Capital employed
2024 2023 2022 2021 2020
Equity £m 46.2 42.0 42.0 43.4 60.2
Cash £m 20.5 21.8 18.7 23.1 37.0
Capital employed £m 57.2 49.5 50.9 60.0 77.4
Statistics
2024 2023 2022 2021 2020
TCV £m 221.3 165.3 142.9 133.1 112.9
EPS (Basic) pence 8.68 7.99 8.24 6.49 6.93
EPS (Diluted) pence 8.56 7.90 8.09 6.39 6.79
Ordinary dividends – paid in the year – pence 1.3 1.2 1.1 1.0 –
Special dividends – paid in the year – pence 6.2 5.5 6.5 10.0 15.0
Ordinary dividends – paid in the year – £m 3.8 3.5 3.3 3.0 –
Special dividends – paid in the year – £m 18.3 16.2 19.3 29.7 44.2
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Alfa Financial Software Holdings PLC | Annual Report and Accounts 2024
Alfa Financial Software Holdings PLC
Registered Office
Moor Place
1 Fore Street Avenue
London
EC2Y 9DT
www.alfasystems.com
T: +44 (0)20 7588 1800
Registered number: 10713517
Stock code: ALFA
ISIN: GB00BDHXPG30
LEI: 213800C5UOZHUTNUGA28
Investor relations
ir@alfasystems.com
Media relations
Teneo
Auditor
RSM UK Audit LLP
Brokers
Barclays Bank plc
Investec Bank plc
Panmure Liberum Ltd
Corporate lawyer
White & Case LLP
Remuneration advisors
Ellason LLP
Climate consultants
EcoAct
Registrar/shareholder queries
Equiniti Limited
Aspect House,
Spencer Road,
Lancing, West Sussex
BN99 6DA
Telephone 0371 384 2030 and outside the UK
+44 (0)121 415 7047
Online: help.shareview.co.uk (from here, you
will be able to securely email Equiniti with
yourenquiry).
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