The directors present the strategic report for the year ended 31 December 2024.
Ownership and financing
The Company is ultimately owned by Constellation Software Inc., a company incorporated in Canada and listed on the Toronto Stock exchange.
The Company through its subsidiaries is committed to the following key long-term objectives:
To supply market leading broker and insurer software solutions on an international basis, supplying customers in both existing and new territories;
To provide class leading capability across commercial and personal lines for brokers;
To continue to develop our digital ecosystem, to develop our offering, seeking opportunities for enhancement and innovation; and
To complete the extensive overhaul of our data centres, including through stable and easily scalable Cloudbased infrastructures.
The Company has made a loss after tax for the year ended 31 December 2024 of £5.3m (2023: profit of £20.8m). This loss is driven by an increase in impairments against amounts due from group undertakings, net interest receivable on intercompany loans of £23m (2023: £21.0m), and finance costs of the loan notes issued in the year of
£3.8m (2023: £3.8m). The loss has been transferred to reserves.
As the Company is an intermediate holding company, with no transactions other than in relation to advisors’ costs, management charges, loan notes and intercompany loans, no key performance indicators have been identified by the directors.
The SSP Group (the Company and its subsidiaries) continues to integrate into the proven Constellation Software Inc business model and processes and will look to benefit from Constellation’s extensive expertise of software businesses.
The key risks to the Company are the recoverability of amounts due from group undertakings of £283.8m (2023:£260.9m). The recoverability of intercompany debtors is dependent on the continued profitable performance of the SSP Group and the balance is shown net of an impairment based on the ability of the SSP Group to generate sufficient cash to repay the balance.
The key risks to which the SSP Group are exposed, and therefore indirectly SSP Midco 2 Limited, are summarised as follows:
Economic risk: general economic environment influencing the willingness of customers to commit to investment in IT solutions. In mitigation, the SSP Group SaaS platforms will offer these customers a cost effective alternative to high capital cost projects;
Industry risk: failure to anticipate or react to changes in the industry model such as the consolidation of major customers and insurers moving pricing and rating onto their own systems. This is mitigated by constant engagement with the wider insurance sector through industry events and research and the ongoing development of SSP Group products to ensure that the Company provides up to date and market leading capabilities to its customers;
Industry risk: competitors developing their products and targeting market share, mitigated by a clear and comprehensive product development roadmap;
Finance risk: credit risk attached to trade receivables, mitigated by credit checks on new customers. Management considers the balance sheet value of trade receivables reflects the recoverable amount;
Capability risk: failure to retain key skilled resources in an increasingly competitive market. This could lead to reputation damage through compromise on quality and the timeliness of delivery. This is mitigated by the investment in HR initiatives, timely and honest communications, incentive plans and the development of the working environment; and
Infrastructure risk: damage to revenue and reputation through service failure or a security breach. In mitigation, SSP has invested heavily in its managed service infrastructure to ensure the hosting environment, data security procedures and disaster recovery plan are as robust as possible. Infrastructure includes both established data centres and the development of Cloud-based environments.
Financial risk management objectives and policies
SSP Group’s activities expose it and the Company to a number of potential financial risks including credit risk and liquidity risk.
Credit risk
The Company’s credit risk is primarily attributable to amounts due from group undertakings. The amount presented in the balance sheet is net of an impairment based on the ability of the SSP Group to generate sufficient cash to repay this debtor.
In turn, the SSP Group’s principal financial assets are bank balances and cash, trade and other receivables.
The SSP Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. The credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
The SSP Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.
Liquidity risk
The company’s liquidity risk is tied to the liquidity risk of SSP Group. SSP Group held cash of £4.5m (2023: £1.5m) as at 31 December 2023. Liquidity risk arises where there is insufficient cash in the short term to fund ongoing operations and future developments.
Liquidity risk is mitigated by standalone cash generation, an ongoing focus on working capital management and the ability to drawdown from broader group resources via its parent company, Volaris Group UK Holdco Limited.
SSP is fully committed to its employees and recognise they are critical to the specialist services that are provided to its customers. Staff are actively encouraged to access the comprehensive training opportunities, both technical and for personal development, provided by the company designed to assist them with career progression. Measures to support staff working from home include enhanced medical support and flexible working measures.
To achieve its long-term objectives, the Group needs to develop and maintain strong relationships with its customers, suppliers and other key stakeholders. The Board has worked hard to build an understanding of customer needs around the world. The Group recognises that strong relationships are an essential part of a partnership approach and any supplier requirements as they develop over time, and delivering ongoing, outstanding levels of service. The Group ethos is “to place the customer at the heart of everything we do”.
SSP recognises that the company and its employees are all responsible for the environment around us. The Group seeks to adopt a responsible approach to business activities, including travel, as part of broader corporate social responsibilities.
The Company has detailed policies and mandatory annual training for all employees regarding data protection, information security, anti-bribery, modern slavery, equality and diversity and corporate responsibility.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2024.
The Company’s principal activities, principal risks and uncertainties and future prospects are presented in the Strategic Report. In accordance with section 414C(11) the Company has elected to present information in respect of principal activities, principal risks and uncertainties and future prospects in the Strategic Report rather than the Directors’ Report.
The results for the year are set out on page 10.
The directors do not recommend the payment of a dividend either in the year or subsequently (2023: £nil).
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
PM+M Solutions for Business LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Pursuant to the Streamlined Energy and Carbon Reporting (SECR) regulations, the company has been exempted from preparing a separate energy and carbon report. The relevant energy and carbon information is included in the group report of a parent company.
It is the directors’ responsibility to assess whether the going concern basis of accounting is appropriate in the financial statements for the Company. The going concern basis should be adopted unless there is an intention to liquidate the entity or to cease trading or there is no realistic alternative but to do so.
In assessing going concern, the directors have considered the performance of the Company, its future prospects and the financial strength and support of the broader group of which the Company is part.
The Company reported an after tax loss for the year of £5.3m (2023:£20.8m) and net assets at 31 December 2024 of £120.2m (2023:£125.5m). Net assets at 31 December 2024 include loan note liabilities of £76.8m (2023:£73.6m).
Forecasts covering the year to 31 December 2029 reflect the reduced debt burden and show that SSP Group will be cash generative and able to pay its liabilities as they fall due. To the extent that surplus cash is generated, or additional facilities are required, SSP Group is part of a broader group of companies where the operating model is to make cash available across the group on an as-needed basis. In support of this, the ultimate parent undertaking, Constellation Software Inc, has provided a letter confirming it will provide financial support for the Group to meet its contractual obligations entered in the ordinary course of business for a period of least 12 months from the date of signing these financial statements. The directors of the Company are satisfied that the wider group of which the Company is part has sufficient funds to meet any cash requirements of the Company and its subsidiaries for the foreseeable future.
The Company’s balance sheet has current liabilities of £15.1m as amounts due to other group undertakings, being amounts due to SSP Limited, a subsidiary company. The directors of SSP Limited, have confirmed that they do not intend to call payment within 12 months of the signature date of these accounts, other than where the Company has funds available to pay this.
We have audited the financial statements of SSP Midco 2 Limited (the 'company') for the year ended 31 December 2024 which comprise the income statement, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
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.
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 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.
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, based on the work undertaken in the course of our 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 extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:
the nature of the industry and sector, control environment and business performance including the design of the Company's remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
any matters we identified having obtained and reviewed the Company's documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
the matters discussed among the audit engagement team including significant component audit teams and involving relevant specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation and tax legislation.
Audit response to risks identified
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the identified risks of fraud through 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.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s member 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 member, those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
The notes on pages 13 to 22 form part of these financial statements.
The notes on pages 13 to 22 form part of these financial statements.
The notes on pages 13 to 22 form part of these financial statements.
SSP Midco 2 Limited is a private company limited by shares incorporated in England and Wales. The registered office is 3rd Floor, West Bowling Mill, Dean Clough Mills, Halifax, West Yorkshire, HX3 5AX. The company's principal activities and nature of its operations are disclosed in the strategic report.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies and processes for managing capital;
disclosure of key management personnel compensation;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the effect of financial instruments on the statement of comprehensive income;
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment, intangible assets, investment property and biological assets;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
for financial instruments measured at fair value and within the scope of IFRS 13, the valuation techniques and inputs used to measure fair value, the effect of fair value measurements with significant unobservable inputs on the result for the period and the impact of credit risk on the fair value; and
related party disclosures for transactions with the parent or wholly owned members of the group.
The company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
SSP Midco 2 Limited is a wholly owned subsidiary of Volaris Group UK Holdco Limited and the results of SSP Midco 2 Limited are included in the consolidated financial statements of Constellation Software Inc which are available from its registered office, 66 Wellington Street West, Suite 5300, Toronto, Ontario, Canada.
Investments are included in the balance sheet at cost less any provision for permanent diminution in value.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
There have been no significant changes to IFRSs that impact the Company’s financial statements.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Fees payable to the Company's auditor for the audit of the Company's financial statements have been met by a fellow group undertaking.
No directors received any remuneration from the Company during the year. The Directors are employees of the group company, Constellation Software Inc. It is not practicable to allocate their remuneration between their services as executives of Constellation Software Inc and as directors of the other group companies.
There are no other employees.
In the prior period none of the directors appointed in the period were employed or remunerated by the Company.
The charge for the year can be reconciled to the (loss)/profit per the income statement as follows:
At 31 December 2024 there was an unrecognised deferred tax asset of £775,000 (2023:£589,000) relating primarily to unutilised losses. This is not recognised as it was more likely than not under the current group tax structure that this asset would not unwind in the foreseeable future. The deferred tax balance at the year end has been calculated based on the main rate of 25%.
Details of the company's subsidiaries at 31 December 2024 are as follows:
The registered office of the companies registered in England & Wales is 3rd Floor, West Bowling Mill, Dean Clough, Halifax, HX3 5AX.
The registered office of the companies registered in South Africa is Sandown Mews, Ground Floor West Building, 88 Stella Road, Johannesburg, 2196.
The registered office of SSP (New Zealand) Limited is Level 6, 205 Queen Street, Auckland.
The registered office of SSP (India) Private Limited is 4th Floor, Block A-2, DLF World Tech Park, DLF IT SEZ Silokhera, Sector 30, Gurugram, Haryana, 122002.
The registered office of SSP (Asia Pacific) Pty Limited is Level 3, 293 Camberwell Road, Camberwell, Vic 3124.
No interest is charged on amounts due from the parent entity.
Interest on amounts due from the subsidiary entity is charged at 10% or 5.75% per the underlying loan.
Amounts owed by group undertakings are held at amortised cost. Although intercompany receivables are repayable on demand, there is no expectation that they will be recovered in the 12 months after the balance sheet date, and they have therefore been presented as non-current assets.
No interest is charged on amounts due to the parent entity.
Interest on amounts due to other group undertakings is charged at 7% plus SONIA.
Amounts owed to group undertakings are repayable on demand and held at amortised cost.
Loan notes of £65,000,000 were issued on 17 February 2021. These notes have a 7 year term and are repayable on 17 Feb 2028. Interest is charged at 5.75% per annum with 1% repayable quarterly and 4.75% accrued and repayable at the end of the term.
At 31 December 2024, accrued interest totalled £11,952,432 (2023: £8,856,473).
Debt issue costs of £415,000 were capitalised on 17 February 2021 and are being amortised over the term of the loan notes. At 31 December 2024 the loan note balance of £76,762,931 (2023: £73,607,795) is shown net of debt issue cost of £189,501 (2023: £248,677).
The Company has one class of ordinary shares which carry no right to fixed income.
There are no events after the balance sheet date that are material to the financial statements.
The Company has taken advantage of the exemption under paragraph 8(k) of FRS 101 not to disclose details of related party transactions with other wholly owned group companies.
The immediate parent undertaking of the Company at the date of signing these financial statements is Volaris Group UK Holdco Limited, a company incorporated in the United Kingdom. Copies of those financial statements will be available at the following address: Rivington House, Drumhead Road, Chorley, Lancashire, England, PR6 7BX.
The ultimate parent company at the date of signing these financial statements is Constellation Software Inc., a company incorporated in Canada. Copies of the consolidated financial statements of Constellation Software Inc. are made available to the public and may be obtained from 66 Wellington Street West, Suite 5300, Toronto, Ontario, Canada.