REG - STM Group PLC - Trading Statement

STMAnnouncement

18/01/2023 07:00

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RNS Number : 0488N  STM Group PLC  18 January 2023

 

 

 

18 January 2023

 

STM Group Plc

("STM", the "Company" or the "Group")

 

Trading Update

STM Group, the cross-border financial services provider, announces a trading
update for the year ended 31 December 2022 (the "Period"), based on unaudited
financial information.

 

The Company expects to report revenue of £24.1m, EBITDA of not less than
£3.2m and PBT of not less than £1.7m for the Period.

 

The acquisition of the UK SIPP and SSAS portfolio from Mercer in September
2022 (the "Acquisition") is performing in line with management's expectations,
having contributed £1.0m of revenue in the Period, although this is expected
to be reported as £0.5m in order to align revenue recognition with STM's more
conservative policy. The results also include £0.9m one-off non-recurring
expenses in relation to the transaction and integration costs of the
Acquisition, and headcount restructuring at plc and senior management level.
Additionally, there is a £0.3m bargain purchase gain on the Acquisition.

 

New business for the second half of the year remained steady albeit slower
than anticipated, particularly within the personal pensions and life assurance
business, and measures are being implemented to address this. The shortfall
was partly addressed by the successful relaunch of our short term annuity
product in the second half of the year which made a contribution of £0.8m to
revenue, and will continue to make contributions in 2023.

 

The Company is in the initial stages of reviewing its three year strategy (the
"Review") in conjunction with external advisers, with a view to realising
embedded shareholder value. The purpose of this Review is to identify ways of
improving the operating performance of the Group with the objective of
delivering a clear growth strategy.

 

As part of the wider Review, the Board will consider the combination of the
various businesses within the Group, as well as the Company's plans to move to
an end-to-end, fully automated operating functional model, supported by third
party technology.

 

An update in respect of the Review is expected to be presented at the time of
the Company's 2022 final results.

 

STM has a strong balance sheet to support its growth ambitions, with net cash
at 31 December 2022 of £14.0m.

 

The Company has also made significant progress in its recruitment of a
non-executive director and is expecting to make a further announcement on this
in the near future.

 

Alan Kentish, CEO of STM Group commented: "Despite a solid addition by way of
the acquisition of the Mercer SIPP and SSAS business, we have not yet
delivered the revenue or operating efficiencies that we expected from the
Group. This is partly driven by external macro-economic factors but equally
some internal inefficiencies. We are seeing improving trends in the underlying
businesses which is encouraging, however we want to ensure we are considering
all opportunities to drive growth and efficiencies within our business.

 

"Nigel Birrell was appointed as Non-Executive Chairman in September 2022.
Nigel has considerable experience in growing businesses and he has been
instrumental in challenging our strategy. Our revised three year strategy will
be based around delivering growth and driving shareholder value. We have a
number of growth initiatives under consideration, and we look forward to
updating the market in respect of the Review alongside our 2022 financial
results. "

 

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 (as it forms part of retained EU law as defined in
the European Union (Withdrawal) Act 2018).

For further information, please contact:

 STM Group Plc
 Alan Kentish, Chief Executive Officer            Via Walbrook PR

 Therese Neish, Interim Chief Financial Officer   www.stmgroupplc.com (http://www.stmgroupplc.com)

 FinnCap                                          www.finncap.com (http://www.finncap.com)
 Matt Goode / Emily Watts - Corporate Finance     Tel: +44 (0) 20 7220 0500

 Tim Redfern - ECM

 Walbrook                                         www.walbrookpr.com (http://www.walbrookpr.com)
 Tom Cooper / Joseph Walker                       Tel: +44 (0) 20 7933 8780
                                                  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=)

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