A system boiler works on the principle of stored hot water. It provides heat for your heating system while being able to heat a hot water cylinder (like a Megaflo). This guarantees simultaneous supply of hot water to all outlets. These type of boilers work with both vented and unvented how water cylinders.
System boilers operate on a sealed system like the combination boiler. As the system is not affected by mains water pressure, they can operate in areas where combi boilers cannot (like lofts). System boilers are usually compact as all the major components like the pump and the diverter valve are built into the boiler.
A system boiler is a great choice for a larger home or family with hot water needs that can’t be met by a combi boiler. You will need a tank in the airing cupboard, though.