Growth persists in FY 2023 despite facing adverse winds for Alpha company.
Alpha Group Reports Record Revenues and Announces Acquisition
In a significant move, Alpha Group, a leading player in the financial services industry, has announced its acquisition of multibank connectivity platform Cobase, marking the company's first acquisition. This strategic move is expected to expand Alpha Group's corporate client offering and allow it to offer a range of treasury-focused products.
The acquisition, which was completed in December 2023, is anticipated to contribute to the growth of Alpha Group's business from 2024 onwards. According to the company's latest financial report, the benefits from the Cobase acquisition are expected to be seen from this year onwards.
For the financial year 2023, Alpha Group reported a 12% increase in revenue to £110m ($140m), with operating profit margins of 39%. The company's overall pre-tax profits climbed above its revenue for the year to £115m ($146m), representing a Year-on-Year (YoY) increase of 140%.
The growth in revenues was driven by the company's FX risk management (FXRM) business, which experienced significant growth. Alpha Group launched offices in Madrid and Munich in its FXRM business, and the UK institutional FXRM business saw growth and is expected to continue as macroeconomic conditions improve. The levels of interest income from client balances reached £73m for the year, up from £9.3m in 2022.
However, the company saw a decline in revenue from its UK corporate business. Despite these challenging conditions, Alpha Group reported record revenues in Q4 2023.
In a bid to encourage long-term client benefits, Alpha Group has adopted a commission structure that incentivizes less complex products. The group believes that complex hedging-based products in the B2B payments space sacrifice long-term client benefits for short-term gains, harming client retention.
The B2B payments market is projected to grow significantly in the coming years, with cross-border transactions expected to reach 18 billion by 2030 as global business activity intensifies despite trade tariffs. The market outlook from 2025 to 2030 anticipates robust growth driven by an increase in various payment channels including virtual cards, instant payments, and wire transfers, supported by technological innovations and value-added services that enhance payment platforms.
The total transaction value in the B2B payments market is forecasted to increase substantially from 2025 through 2030, underscoring accelerated adoption across small, medium, and large businesses. Emerging technologies and integrated payment solutions are major growth drivers, improving efficiency and reducing friction in cross-border and domestic payments. Market growth is bolstered by enhanced readiness in 61 key countries, expanding the geographic footprint and adoption of B2B payments solutions globally.
In related payment segments such as Canada, commercial B2B payments accounted for 32% of payments value in 2024, with continuous adoption of API-based and integrated ERP solutions that improve remittance and reconciliation processes, indicating the trend towards digital transformation in B2B payments.
Overall, the B2B payments market is poised for strong expansion, supported by technological advances, increased cross-border activity, and demand for richer payment data and automation tools across business sizes and regions.
With the acquisition of Cobase, Alpha Group is well-positioned to capitalise on this growth and continue its trajectory of success.
Investing in the acquisition of Cobase, a multibank connectivity platform, positions Alpha Group to leverage emerging opportunities in the growing B2B payments market, enhancing its business operations. As the company anticipates, the benefits from this acquisition are expected to contribute to the expansion of Alpha Group's treasury-focused products and corporate client offerings from 2024 onwards.
