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RNS Number : 9094N STM Group PLC 28 September 2023
(http://www.stmgroupplc.com/) (http://www.stmgroupplc.com/)
28 September 2023
STM Group Plc
("STM", "the Company" or "the Group")
Unaudited Interim Results for the six months ended 30 June 2023
STM Group Plc (AIM: STM), the multi-jurisdictional financial services group,
is pleased to announce its unaudited interim results for the six months ended
30 June 2023.
Financial Highlights:
2023 2023 2022 2022
(reported)
(reported)
(underlying)**
(underlying)**
Revenue £13.2m £13.2m £11.3m £11.3m
Profit before other items* £1.5m £1.8m £1.4m £1.7m
Profit before taxation ("PBT") £0.1m £0.4m £0.5m £0.8m
Profit before other items margin 11% 14% 12% 15%
Earnings per share 0.17p N/A 0.62p N/A
Cash at bank (net of borrowings) £13.8m £16.9m
Interim dividend - 0.60p
* defined as revenue from continuing operations less operating expenses i.e.
profit from continuing operations before taxation, net finance costs,
depreciation, amortization, and non-operating items such as bargain purchase
gain and loss on the sale of investments
** Underlying statistics are net of certain transactions which are either
non-recurring or exceptional and thus do not form part of the normal course of
business.
Operating Highlights:
· Recurring revenue resilient at 95% of total
revenues, similar to prior periods
· Successful integration of Mercer SIPP and SSAS
businesses acquired in the second half of 2022
· Completion of first part of the strategic review
· The strategic review led in turn to a Group-wide
technology review as part of a drive to improve efficiencies and margins
· Significant upfront work completed as part of being
Consumer Duty ready
· Appointment of new Head of Business Development,
leading to increased volumes of illustrations for our flexible annuity
products
· Successful implementation of new client interest
sharing policy
Post-period Highlights:
· On 11 July 2023, the boards of STM, and PSF Capital GP II Limited as
general partner of PSF Capital Reserve LP ("Pension SuperFund Capital"),
announced that they had reached agreement in principle on the key terms of a
possible cash offer (the "Offer") for the entire issued and to be issued share
capital of the Company at a price of 70 pence per share.
· On 5 September 2023, the Company announced revised terms for a
possible cash offer at a price of 67 pence per share that would be conditional
upon the completion of a disposal of certain parts of the Group that are
non-core to the strategy of Pension SuperFund Capital (the "Revised Possible
Offer"). It was also announced that Alan Kentish (a director and shareholder
of the Company) had signed heads of terms with STM and Pension SuperFund
Capital to acquire certain parts of the Group, comprising the UK SIPP
businesses and entities connected with the 'funder' of the Master Trust.
· On 27 September 2023, the Company announced it had received a revised
proposal, being an offer price of up to 67 pence per share, comprising 60
pence per share payable in cash upon completion of the possible offer and a
further 7 pence per share by way of an unsecured loan note, repayable 12
months following the date on which a firm intention to make an offer is
announced in accordance with Rule 2.7 of the City Code on Takeovers and
Mergers (the "Code"), with repayment contingent on certain conditions that are
being discussed between Pension SuperFund Capital and the Company. It also
announced discussions with Alan Kentish (a director and shareholder of the
Company) with respect to the acquisition of certain parts of the Group had
been revised such that it is now proposed that Mr Kentish will only acquire
the Group's UK SIPP businesses.
· The Company has also announced in accordance with Rule 2.6(a) of the
Code, that a further extension to the date by which Pension SuperFund Capital
is required either to announce a firm intention to make an offer in accordance
with Rule 2.7 of the Code or to announce that it does not intend to make an
offer for the Company had been granted by the Takeover Panel, in order to
allow further time for these discussions to be completed. Consequently,
Pension SuperFund Capital is required either to announce a firm intention to
make an offer in accordance with Rule 2.7 of the Code or to announce that it
does not intend to make an offer for the Company by not later than 5.00pm on
11 October 2023.
· There can be no certainty that any offer will ultimately be made for
the Company.
For further information, please contact:
STM Group Plc
Alan Kentish, Chief Executive Officer Via Walbrook PR
Therese Neish, Chief Financial Officer www.stmgroupplc.com (http://www.stmgroupplc.com)
Cavendish Capital Markets Ltd (Nominated Adviser and Broker) Tel: +44 (0)20 7600 1658
Matt Goode / Emily Watts / Abigail Kelly- Corporate Finance https://www.cavendish.com (https://www.cavendish.com)
Tim Redfern - ECM
Walbrook PR Tel: +44 (0) 20 7933 8780
Tom Cooper / Joseph Walker Mob: +44 (0) 797 122 1972
STM@walbrookpr.com (mailto:STM@walbrookpr.com)
Notes to editors:
STM is a multi-jurisdictional financial services group traded on AIM, a market
operated by the London Stock Exchange. The Group specialises in the
administration of client assets in relation to retirement, estate and
succession planning and wealth structuring.
Today, the Group has operations in the UK, Gibraltar, Malta, Australia and
Spain. STM has developed a range of pension products for UK nationals and
internationally domiciled clients and has two Gibraltar life assurance
companies which provide life insurance bonds - wrappers in which a variety of
investments, including investment funds, can be held.
STM's growth strategy is focused on both organic initiatives and strategic
acquisitions.
Further information on STM Group can be found at www.stmgroupplc.com
(https://urldefense.proofpoint.com/v2/url?u=http-3A__www.stmgroupplc.com&d=DwMGaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=05PHl3GHdShYuaCii2fBRpoqaNr9B1d97X09daeosu0&m=PU7KD9-tYowY3PC9sXem4PQSmJ-Zm8TJB2ox4M8NHwI&s=39Vvq5Ccz7txaqksRCl4B8zUxhpd6elnqEy0XmTed50&e=)
Chief Executive's Review
Overview
I am pleased to present the results for the half year ended 30 June 2023. To
say it has been a busy period would be an understatement, firstly with the
strategic review and more recently in dealing with the possible offer by
Pension SuperFund Capital for the entire issued and to be issued share capital
of the Company, as first announced on 11 July 2023. During the recent months,
the management has been heavily focused on facilitating Pension SuperFund
Capital's due diligence workstreams. Despite the exceptional circumstances,
all colleagues and teams have worked hard to ensure continued delivery of
service to customers and value to shareholders.
In this respect, and as previously announced, certain changes to the policy on
interest income were put into effect on 1 July 2023. This allowed for better
rate negotiations on client cash balances with banks, and changes were made to
how this was shared with customers. Whilst the first half of the year has seen
the benefits of increased market interest rates and the income that can be
generated from funds held on behalf of clients, the second half of the
financial year is particularly expected to see the significant benefits from
the change in policy, as well as from the materially rising interest rate
environment which the Company has benefited from during 2023. This increased
interest income compensated for income from new business generation across the
Group being slower than anticipated. With recurring operating revenue
continuing to hold up well when compared to the first half of 2022, the
overall revenue for the period was 17% higher than the prior period.
Operational expenses for the period were £11.7 million (2022: £10.0
million), broadly in line with management expectations, with overruns in
certain expense categories, mainly legal and professional costs, being
compensated for by savings in personnel costs. Non-operational expenses,
classified as "other items" on the income statement, increased in comparison
with the prior period, particularly in relation to finance costs (£302,000,
2022: £99,000) and the non-cash item of amortisation of the client portfolios
(£672,000, 2022: £445,000). The increases were expected following the
acquisition of the additional SIPP and SSAS portfolios from Mercer Ltd.
Financial review
Financial performance in the period
The Group delivered total revenue in the six months to 30 June 2023 of £13.2
million (2022: £11.3 million), of which £0.9 million was interest income
(2022: £0.08 million). The current period also saw the benefit of £1.4
million of income from the Mercer portfolios which were acquired in September
2022 and which therefore did not contribute to the revenues reported in the
prior period.
Recurring revenues at 95% of total revenues for the period remained consistent
and in line with the prior period (2022: 94%). Recurring revenues for the
current period were £12.6 million, as compared to £10.6 million in the prior
period, with £1.4 million being the contribution from the Mercer portfolios.
Profit before other items for the period was £1.5 million (2022: £1.4
million), with reported profit before tax of £0.1 million (2022: £0.5
million). A number of one-off and non-recurring costs, including legal and
professional costs associated with a strategic review of the business and
other contractual matters, were incurred during the period under review.
Adjusting for these non-recurring costs results in underlying profit before
other items of £1.8 million (2022: £1.7 million) and underlying profit
before tax of £0.4 million (2022: £0.8 million).
The reconciliation of reported measures to underlying measures is made up of
items which are either non-recurring or exceptional and thus do not form part
of the normal course of business. This reconciliation for all three key
financial measures is shown in the table below:
RECONCILIATION OF REPORTED TO UNDERLYING MEASURES
REVENUE PROFIT BEFORE OTHER ITEMS PROFIT BEFORE TAX
2023 2022 2023 2022 2023 2022
£m £m £m £m £m £m
Reported measure 13.2 11.3 1.5 1.4 0.1 0.5
Add: non-recurring costs - - 0.3 0.3 0.3 0.3
Underlying measure 13.2 11.3 1.8 1.7 0.4 0.8
Cashflows
Cash and cash equivalents as at 30 June 2023 were £18.9 million (2022: £18.1
million), with cash generated from operating activities being £1.6 million
(2022: £1.2 million), thus exceeding the reported profit before tax.
During the period the Group also repaid £0.3 million of the secured bank loan
and the outstanding balance as at 30 June 2023 was £5.1 million. As a result,
net cash and cash equivalents as at 30 June 2023 amounted to £13.8 million
(2022: £16.9 million).
As would be expected for a group which is regulated in several jurisdictions,
a significant proportion of the cash balances forms part of the Group's
regulatory and solvency requirements. It is not possible to determine the
exact amount of cash and cash equivalents required for solvency purposes, as
other assets can also be used to support the regulatory solvency requirements.
However, the aggregated regulatory capital requirement across the Group as at
30 June 2023 was £15.7 million (2022: £16.9 million) largely due to the
increase in market interest rates resulting in a higher discount rate being
applied to the life assurance solvency capital requirement.
Accrued income, in the form of work performed for clients but not billed, as
at 30 June 2023 amounted to £2.6 million (2022: £1.6 million). This increase
was largely because of the accrued income on the Mercer portfolios acquired in
September 2022, and which would therefore not have been present at the
previous period end, and increased interest income accruals because of market
rate movements. This gives some visibility of revenue still to be billed and
subsequently collected as cash at bank.
Additionally, deferred income relating to annual fees invoiced but not yet
earned at 30 June 2023 amounted to £4.1 million (2022: £3.9 million). This
figure also gives good visibility of revenue that is still to be earned
through the Income Statement in the coming months.
Trade receivables as at 30 June 2023 were £3.5 million (2022: £3.4 million).
Prepayments increased by £0.6 million to £1.3 million (2022: £0.7 million)
as at the period end as compared to prior year largely as a result of legal
fees, claims excesses and Financial Ombudsman Services fees incurred but
recoverable from other parties.
Other creditors and accruals increased by £2.0 million to £6.7 million (2022
(restated): £4.7 million) as a result of the Mercer portfolios acquisition
and incremental movements in operational accruals across the Group.
As more fully explained in Note 12, the comparative figures in the Statement
of Financial Position as at 30 June 2022 have been restated to correct
allocations previously made in the prior year's interim financial statements
in respect of liabilities for current tax, trade and other receivables, and
trade and other payables.
The reallocations had no impact on either the net asset position of the Group
as at 30 June 2022 or the income statement of the Group for the six months
ended on that date, both as previously reported.
Dividend
Given the ongoing discussions with PSF in respect to a possible offer, the
Board has taken the decision not to declare an interim dividend for the
current period (2022: interim dividend of 0.6p declared and subsequently
paid).
Review of operations
Pensions
The pensions administration businesses continue to be the cornerstone of our
operations.
Pensions revenue for the period was £11.0 million (2022: £9.1 million)
representing 83% (2022: 80%) of total Group revenues, with the Mercer
portfolios accounting for £1.4 million (£2022: £Nil) of the £1.9 million
of increased revenue. Total pensions revenue arose as follows: £4.6 million
(2022: £4.9 million) from QROPS, £3.7 million (2022: £1.8 million) from the
SIPP and SSAS businesses and a further £2.1 million (2022: £1.8 million)
from the workplace pensions business. In addition, the Group also achieved a
revenue contribution of £0.6 million (2022: £0.6 million) from third party
administration and Group Pension Plans.
The recurring revenue percentage for this operating segment increased to 96%
of all pensions revenues (2022: 95%), which, when combined with the relatively
low attrition rates, remains a solid predictor of future divisional
profitability.
With our new Group Head of Business Development having joined earlier in the
year and a new business development team now in place, management believes
that the pension businesses are now better positioned to drive organic growth.
The independent strategic review commissioned in the period also identified
areas for focus in technology and processes, which the Group has continued to
explore during this period. Subject to the outcome of the possible Offer and
related management buy-out, there will be an ongoing focus on these areas to
enhance margins. Internationally, the focus is on increasing revenue through
our Malta occupational pension schemes for international businesses.
Life Assurance
Revenue for the combined Life Assurance businesses amounted to £1.9 million,
which was consistent with the revenue generated in the same period in 2022
(£1.9 million). In a similar manner to the pensions operating segment, the
life assurance businesses also had high levels of recurring fees, which
remained stable at 94% of total life assurance revenues (2022: 94%).
Our flexible annuity products aimed at the UK market remain the key focus for
sustainable organic growth within our life businesses. Conversion times for
new business remain slow and unpredictable, albeit with our new Business
Development team fully embedded the pipeline based on illustrations issued is
now considerably higher. The continuing effort to expand our intermediary base
is an important part of improving our new business numbers.
Regulatory Developments and Consumer Duty
Consumer Duty, which is a framework set out by the Financial Conduct Authority
("FCA") for providers and adviser firms of all sizes providing financial
products or adviser to consumers to measure whether they are delivering good
outcomes for UK consumers, came into force on 31 July 2023. This framework
puts greater focus on firms to ensure they are actively assessing, improving
and evidencing how they are support UK consumers in making good financial
decisions about their future. Consumer duty applies to firms operating in
the UK, so it applies both to our UK SIPP companies and to our Gibraltar
companies that provide products and service to UK residents and financial
advisers.
Across the UK and Gibraltar, we implemented a Consumer Duty working party
project to oversee the implementation and review our products and
service. Various areas of our businesses, products and services were reviewed
with changes made to simplify our product range as well as ensuring
documentation, processes, procedures and policies were all updated to reflect
the regulatory changes. We are pleased with the progress made and, whilst
there are areas for improvement, management are of the view that we are
meeting our regulatory requirements and our products and services are designed
to deliver good customer outcomes.
Outlook
Since 30 June 2023 (being the date to which STM's interim results were drawn
up), the Group has continued to demonstrate resilience in its underlying
business through the continuing high levels of recurring revenues,
supplemented by strengthening interest income from its interest sharing model.
As a result, the Group expects to be in line with management's internal
expectations for the year ending 31 December 2023.
Possible Offer for the Company
The latest update on the possible offer was announced on 27 September 2023,
when the Company updated that it had received a revised proposal, being an
offer price of up to 67 pence per share, comprising 60 pence per share payable
in cash upon completion of the possible offer and a further 7 pence per share
by way of an unsecured loan note, repayable 12 months following the date on
which a firm intention to make an offer is announced in accordance with Rule
2.7 of the Code, with repayment contingent on certain conditions that being
discussed between Pension SuperFund Capital and the Company. It also announced
discussions with Alan Kentish (a director and shareholder of the Company) with
respect to the acquisition of certain parts of the Group had been revised such
that it is now proposed that Mr Kentish will only acquire the Group's UK SIPP
businesses.
The Company has also announced in accordance with Rule 2.6(a) of the Code,
that a further extension to the date by which Pension SuperFund Capital is
required either to announce a firm intention to make an offer in accordance
with Rule 2.7 of the Code or to announce that it does not intend to make an
offer for the Company had been granted by the Takeover Panel, in order to
allow further time for these discussions to be completed. Consequently,
Pension SuperFund Capital is required either to announce a firm intention to
make an offer in accordance with Rule 2.7 of the Code or to announce that it
does not intend to make an offer for the Company by not later than 5.00pm on
11 October 2023. The Board also notes that there can be no certainty that
any offer will ultimately be made for the Company.
In the meantime, STM's executive management has continued to focus on
developing the underlying businesses of the Group.
Alan Kentish
Chief Executive Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period from 1 January 2023 to 30 June 2023
Notes Unaudited Unaudited Audited
6 months to 6 months to Year to
30 June 30 June 31 December 2022
2023 2022 £'000
£'000 £'000
Revenue 5 13,208 11,323 24,094
Administrative expenses (11,729) (9,966) (20,773)
Profit before other items 1,479 1,357 3,321
OTHER ITEMS
Bargain purchase gain - - 327
(Loss)/gain on revaluation of financial instruments (36) - 11
Loss on disposal of subsidiaries - - (162)
Finance costs (302) (99) (322)
Depreciation and amortisation (995) (778) (1,597)
Profit before taxation 146 480 1,578
Taxation (46) (111) (724)
Profit after taxation 100 369 854
OTHER COMPREHENSIVE INCOME (11) 13 12
Items that are or may be reclassified to profit and loss
Foreign currency translation differences for foreign operations
Total other comprehensive (loss)/income (11) 13 12
Total comprehensive income for the period/year 89 382 866
100 305 844
Profit attributable to:
Owners of the Company
Non-controlling interests - 64 10
100 369 854
Total comprehensive income 89 318 856
attributable to:
Owners of the Company
Non-controlling interests - 64 10
89 382 866
Earnings per share basic (pence) 6 0.17 0.62 1.42
Earnings per share diluted (pence) 6 0.17 0.62 1.42
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2023
Notes Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
Restated
£'000 (Note 12) £'000
£'000
ASSETS
Non-current assets
Property and office equipment 933 1,317 1,161
Intangible assets 21,745 19,437 22,125
Financial assets 1,728 881 1,762
Deferred tax asset 51 76 58
Total non-current assets 24,457 21,711 25,106
Current assets
Accrued income 2,576 1,550 860
Trade and other receivables 9 6,901 6,804 8,461
Receivables due from insurers 488 24,130 488
Cash and cash equivalents 8 18,931 18,118 19,234
Total current assets 28,896 50,602 29,043
Total assets 53,353 72,313 54,149
EQUITY
Called up share capital 12 59 59 59
Share premium account 22,372 22,372 22,372
Retained earnings 14,482 14,734 14,382
Other reserves (2,322) (467) (1,843)
Equity attributable to owners of the Company 34,591 36,698 34,970
Non-controlling interests - (388) (68)
Total equity 34,591 36,310 34,902
LIABILITIES
Current liabilities
Liabilities for current tax 568 - 788
Trade and other payables 10 12,813 10,366 12,517
Provisions 488 24,130 488
Total current liabilities 13,869 34,496 13,793
Non-current liabilities
Other payables 11 4,566 1,074 5,050
Deferred tax liabilities 327 433 404
Total non-current liabilities 4,893 1,507 5,454
Total liabilities and equity 53,353 72,313 54,149
STATEMENT OF CONSOLIDATED CASHFLOW
For the period from 1 January 2023 to 30 June 2023
Notes Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
Restated
£'000 (Note 12) £'000
£'000
Operating activities
Profit for the period/year before tax 146 480 1,578
Adjustments for:
Depreciation of property and office equipment 323 333 673
Amortisation of intangible assets 672 445 924
Loss on disposal of property and office equipment 50 - 4
Unrealised loss/(gain) on financial instruments at FVTPL 36 - (11)
Bargain purchase gain - - (327)
Taxation paid (337) (1,037) (619)
Decrease/(increase) in trade and other receivables 1,560 1,150 (1,396)
Decrease in receivables due from insurers - - 23,642
(Increase)/decrease in accrued income (1,716) (239) 558
Increase in trade and other payables 857 116 2,428
Decrease in provisions - - (23,642)
Net cash generated from operating activities 1,591 1,248 3,812
Investing activities
Purchase of property and office equipment (143) (13) (165)
Increase in intangible assets (292) (527) (937)
Disposal of investments - - 1,477
Purchase of financial instrument - - (1,734)
Acquisition of non-controlling interests (400) - (120)
Consideration paid on acquisition of subsidiaries and portfolio (220) - (3,454)
Net cash absorbed by investing activities (1,055) (540) (4,933)
Financing activities
Proceeds from bank loan - - 4,463
Repayment of bank loan (275) (275) (550)
Interest paid on bank loan (190) (62) (162)
Lease liabilities paid (363) (473) (724)
Dividends paid 7 - - (891)
Net cash (absorbed by)/generated from financing activities (828) (810) 2,136
(Decrease)/increase in cash and cash (292) (102) 1,015
equivalents
Reconciliation of net cash flow to movement in net funds
Analysis of cash and cash equivalents during the period/year
(Decrease)/increase in cash and cash equivalents (292) (102) 1,015
Effect of movements in exchange rates on cash and cash equivalents (11) 13 12
Balance at start of period/year 8 19,234 18,207 18,207
Balance at end of period/year 8 18,931 18,118 19,234
STATEMENT OF CONSOLIDATED CHANGES IN EQUITY
For the period from 1 January 2023 to 30 June 2023
Share Share Retained Treasury Foreign Currency Translation Share Total Non-Controlling Interests Total Equity
Capital Premium Earnings Shares Reserve Based £000 £000 £000
£000 £000 £000 £000 £000 Payments Other
Reserve Reserve
£000 £000
Balance at 1 January 2022 59 22,372 14,429 (549) (93) 162 - 36,380 (452) 35,928
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Profit for the year - - 844 - - - - 844 10 854
Other comprehensive income
Foreign currency translation differences - - - - 12 - - 12 - 12
Transactions with owners, recorded directly in equity
Acquisition of non-controlling interests - - - - - - (1,375) (1,375) 374 (1,001)
Dividend paid - - (891) - - - - (891) - (891)
At 31 December 2022 and 1 January 2023 59 22,372 14,382 (549) (81) 162 (1,375) 34,970 (68) 34,902
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Profit for the period - - 100 - - - - 100 - 100
Other comprehensive income
Foreign currency translation differences - - - - (11) - - (11) - (11)
Transactions with owners, recorded directly in equity
Acquisition of non-controlling interests - - - - - - (468) (468) 68 (400)
At 30 June 2023 59 22,372 14,482 (549) (92) 162 (1,843) 34,591 - 34,591
NOTES TO THE CONSOLIDATED RESULTS
For the period from 1 January 2023 to 30 June 2023
1. Reporting entity
STM Group Plc (the "Company") is a company incorporated and domiciled in the
Isle of Man and was admitted to trading on AIM, a market operated by London
Stock Exchange plc, on 28 March 2007. The address of the Company's registered
office is 1(st) Floor, Viking House, St Paul's Square, Ramsey, Isle of Man,
IM8 1GB. The Group is primarily involved in financial services.
2. Basis of preparation
Results for the period from 1 January 2023 to 30 June 2023 have not been
audited.
The consolidated results have been prepared in accordance with International
Financial Reporting Standards ("IFRS"), interpretations adopted by the
International Accounting Standards Board ("IASB") and in accordance with Isle
of Man law and IAS 34, Interim Financial Reporting.
3. Significant accounting policies
The accounting policies in these consolidated results are the same as those
applied in the Group's consolidated financial statements for the year ended
31 December 2022. No changes in accounting policies are expected to be
reflected in the Group's consolidated financial statements for the year ended
31 December 2023.
4. Segmental information
STM Group has three reportable segments: Pensions, Life Assurance and Other
Services. Each segment is defined as a set of business activities generating a
revenue stream and offering different services to other operating segments.
The Group's operating segments have been determined based on the management
information reviewed by the CEO and Board of Directors.
The Board assesses the performance of the operating segments based on turnover
generated. The performance of the operating segments is not measured using
costs incurred as the costs of certain segments within the Group are
predominantly centrally controlled and therefore the allocation of these is
based on utilisation of arbitrary proportions. Management believes that this
information and consequently profitability could potentially be misleading and
would not enhance the disclosure above.
The following table presents the turnover information regarding the Group's
operating segments:
Operating Segment Unaudited Unaudited Audited
6m 2023 6m 2022 2022
£'000 £'000 £'000
Pensions 10,978 9,072 18,421
Life Assurance 1,937 1,910 5,001
Other Services 293 341 672
Total 13,208 11,323 24,094
Analysis of the Group's turnover information by geographical location is
detailed below:
Geographical Segment Unaudited Unaudited Audited
6m 2023 6m 2022 2022
£'000 £'000 £'000
Gibraltar 2,945 2,976 7,324
Malta 3,588 3,755 7,178
United Kingdom 6,425 4,251 9,110
Other 250 341 482
Total 13,208 11,323 24,094
5. Revenue
Unaudited Unaudited Audited
6m 2023 6m 2022 2022
£'000 £'000 £'000
Revenue from administration of assets 12,275 11,244 23,563
Interest and investment income 933 79 531
Total 13,208 11,323 24,094
.
6. Earnings per share
Earnings per share for the period from 1 January 2023 to 30 June 2023 is based
on the profit after taxation of £100,000 divided by the weighted average
number of £0.001 ordinary shares during the period of 59,408,088 basic.
A reconciliation of the basic and diluted number of shares used in the period
ended 30 June 2023 and 30 June 2022 is as follows:
2023 2022
Weighted average number of shares 59,408,088 59,408,088
Share incentive plan (issued but not fully allocated) - -
Diluted 59,408,088 59,408,088
7. Dividends
The following dividends were declared and paid by the Group during
the period:
Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
0.0 pence (2022: 1.5 pence) per qualifying ordinary share - - 891
8. Cash and cash equivalents
Cash at bank earns interest at floating rates based on prevailing rates. The
fair value of cash and cash equivalents in the Group is £18,931,000 (2022:
£18,118,000).
9. Trade and other receivables
Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
£'000 Restated £'000
£'000
Trade receivables 3,543 3,421 4,266
Prepayments 1,296 723 999
Other receivables 2,062 2,660 3,196
Total 6,901 6,804 8,461
10. Trade and other payables
Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
£'000 Restated £'000
£'000
Deferred income 4,139 3,869 3,842
Trade payables 1,069 547 882
Bank loan (secured) 550 550 552
Lease liabilities 335 638 570
Contingent consideration - 56 56
Other creditors and accruals 6,720 4,706 6,615
Total 12,813 10,366 12,517
The Company signed a credit facility with Royal Bank of Scotland
(International) Ltd for £5.50 million in 2020, with drawn down being
completed in September 2022 to fund the acquisition of the Mercer portfolios.
The facility has a 5-year term from November 2020, with capital repayments
structured over ten years and a final instalment to settle the outstanding
balance in full at the end of the 5 years. At the period-end, the balance
outstanding on this facility was £5.1 million. Interest on the loan is
charged at 3.5% per annum over the Sterling Relevant Reference Rate on the
outstanding balance. Prior to fully drawing down the loan, interest was paid
on the undrawn balance at a rate of 1.75% per annum over the Sterling Relevant
Reference Rate.
The facility is subject to customary cashflow to debt service liability ratios
and EBITDA (profit before other items) to debt service liability ratio
covenants tested quarterly and is secured by a capital guarantee provided by a
number of non-regulated holding subsidiary companies within the Group and
debenture over these companies.
11. Other payables - amounts falling due in more than a year
Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Lease liabilities 28 273 143
Bank loan (secured) (Note 10) 4,538 625 4,811
Other payables - 176 96
Total 4,566 1,074 5,050
12. Reclassification - reallocation of prior year corporate tax and payroll
tax obligations
The comparative figures in the Statement of Financial Position as at 30 June
2022 have been restated to correct allocations previously made in the prior
year's interim financial statements.
The Statement of Financial Position as at 30 June 2022 disclosed £786,000 as
a corporate tax liability whereas this liability was in relation to payroll
obligations due but not paid. Similarly, other creditors and accruals
previously reported as at 30 June 2022 included a recoverable of £255,000 in
relation to a refund of corporation tax due from the Malta authorities.
The above reallocations had no impact on either the net asset position of the
Group as at 30 June 2022 or the income statement of the Group for the six
months ended on that date, both as previously reported. The tables below
reflect the impact of this change in presentation.
Unaudited as at 30 June 2022
As previously reported As
£'000 Reallocation restated
£'000 £'000
ADJUSTMENTS IN RELATION TO CURRENT ASSETS
Trade and other receivables
Other receivables 2,405 255 2,660
Trade and other receivables 6,549 255 6,804
CURRENT ASSETS 50,347 255 50,602
Unaudited as at 30 June 2022
As previously reported As
£'000 Reallocation restated
£'000 £'000
ADJUSTMENTS IN RELATION TO CURRENT LIABILITIES
Liabilities for current tax 786 (786) -
Trade and other payables
Other creditors and accruals 3,665 1,041 4,706
Trade and other payables 9,325 255 10,366
TOTAL CURRENT LIABILITIES 34,241 255 34,496
TOTAL LIABILITIES AND EQUITY 72,058 255 72,313
13. Called up share capital
Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Authorised
100,000,000 ordinary shares of £0.001 each 100 100 100
Called up, issued and fully paid
59,408,088 ordinary shares of £0.001 each 59 59 59
14. Subsequent events
On 11 July 2023, the boards of STM, and Pension SuperFund Capital", announced
that they had reached agreement in principle on the key terms of a possible
cash offer (the "Offer") for the entire issued and to be issued share capital
of the Company at a price of 70 pence per share.
On 5 September 2023, the Company announced revised terms for a possible cash
offer at a price of 67 pence per share that would be conditional upon the
completion of a disposal of certain parts of the Group that are non-core to
the strategy of Pension SuperFund Capital (the "Revised Possible Offer"). It
was also announced that Alan Kentish (a director and shareholder of the
Company) had signed heads of terms with STM and Pension SuperFund Capital to
acquire certain parts of the Group, comprising the UK SIPP businesses and the
businesses connected with and including the Master Trust.
On 27 September 2023, the Company announced it had received a revised
proposal, being an offer price of up to 67 pence per share, comprising 60
pence per share payable in cash upon completion of the possible offer and a
further 7 pence per share by way of an unsecured loan note, repayable 12
months following the date on which a firm intention to make an offer is
announced in accordance with Rule 2.7 of the Code, with repayment contingent
on certain conditions that are under negotiation between Pension SuperFund
Capital and the Company. It also announced discussions with Alan Kentish (a
director and shareholder of the Company) with respect to the acquisition of
certain parts of the Group had been revised such that it is now proposed that
Mr Kentish will only acquire the Group's UK SIPP businesses.
The Company has also announced in accordance with Rule 2.6(a) of the Code,
that a further extension to the date by which Pension SuperFund Capital is
required either to announce a firm intention to make an offer in accordance
with Rule 2.7 of the Code or to announce that it does not intend to make an
offer for the Company had been granted by the Takeover Panel, in order to
allow further time for these discussions to be completed. Consequently,
Pension SuperFund Capital is required either to announce a firm intention to
make an offer in accordance with Rule 2.7 of the Code or to announce that it
does not intend to make an offer for the Company by not later than 5.00pm on
11 October 2023. The Board also notes that there can be no certainty that any
offer will ultimately be made for the Company.
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