REG - STM Group PLC - Update re Results and Directorate Change

STMAnnouncement

04/05/2023 07:00

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RNS Number : 3466Y  STM Group PLC  04 May 2023

 

STM Group Plc

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

Update re Results and Directorate Change

 

STM Group Plc (AIM: STM), the cross border financial services provider,
announces an update on the audit for the 2022 Results and the outcome of the
strategic review.

Financial statements for STM's two life assurance subsidiary companies for the
year ended 31 December 2021

The Group's audited financial statements for the year ended 31 December 2021
were published on 8 June 2022.  However, the audited financial statements for
the year ended 31 December 2021 for two of the Company's subsidiaries, London
& Colonial Assurance PCC Plc and STM Life Assurance PCC Plc (the "Life
Company Subsidiaries"), have been delayed and are now expected to be signed
next week.  There have been a number of reasons for the delay in completing
the audits of the Life Company Subsidiaries including some technical and
regulatory matters, which are detailed further below, and which, in turn, is
now expected to result in a material uncertainty relating to going concern
being disclosed in the Life Company Subsidiaries' accounts.

There were a number of planned and unplanned changes in the management team
and compositions of the Boards of Directors of the Life Company Subsidiaries
in the second half of 2022 and regulatory approval from the Gibraltar
Regulator, the Gibraltar Financial Services Commission ("GFSC") was therefore
required for a number of regulated roles at the same time. The GFSC
subsequently confirmed that the companies may not be meeting the threshold
conditions for regulated individuals under Section 65 of the Financial
Services Act. No action has been taken by the GFSC and the Life Company
Subsidiaries have been working closely with the GFSC to obtain the approvals.
 As at today, only the role of Managing Director ("MD") for each of the Life
Company Subsidiaries is still awaiting regulatory approval, although he is in
place and has been acting in an interim capacity for the last eight months.
 This will remain the case until the GFSC approves the application or
otherwise.

A consequence of the above, is that the individual has been performing this
regulated function whilst awaiting official regulatory approval from the GFSC
as allowed for in the Financial Services (Insurance Companies) Regulations
2020.  The Board and the directors of the Life Company Subsidiaries have
remained satisfied throughout this period, that this is the most appropriate
course of action, given the circumstances. Although Gibraltar legislation does
allow for individuals to perform regulated roles whilst waiting for GFSC
approval, there remains a level of uncertainty as to whether the GFSC will
approve this application. Should the GFSC decide not to approve the
application and in the event that no suitable alternative individual is put
forward by the Life Company Subsidiaries then that would have a technical
impact with regards to the Life Company Subsidiaries operating as going
concerns, solely from a regulatory perspective.

This is expected to result in the audited accounts of the Life Company
Subsidiaries containing a material uncertainty relating to the going concern
of those businesses until this role is filled with GFSC approved individuals.
The Board is confident that this scenario is highly unlikely to materialise as
if the individual in question is not approved an alternate candidate will be
put forward by the Life Company Subsidiaries to fill the regulated role. The
Board is not aware of any other regulatory matters which would impact the
going concern assessment and are confident in the ability of the current
boards and management teams of the Life Company Subsidiaries including the
individual pending regulatory approval. Furthermore, the Board remains
confident in the Life Company Subsidiaries' ability to continue as a going
concern from a business perspective.

Audit for the financial statements for the year ended 31 December 2022

A change in Group auditors from Deloitte to Grant Thornton was announced on 9
November 2022. Unfortunately, as a result of the delay in the completion of
the audits of the Life Company Subsidiaries for the year ended 31 December
2021, Grant Thornton have been unable to commence the audit of the Life
Company Subsidiaries  for the year ended 31 December 2022 as Deloitte have
not been able to resign as auditors of the Life Company Subsidiaries, until
the financial statements of the Life Company Subsidiaries for the year ended
31 December 2021 have been signed.

As such there will now be a delay in finalising the Group's audit for the year
ended 31 December 2022 and the Board now expects to announce the Group's final
audited results in June 2023.

Other than the delay in the audit of the Life Company Subsidiaries, the audit
across the rest of the Group is progressing well.  No significant findings or
material adjustments have been noted, and it is therefore expected that the
Group's results will be consistent with the guidance provided in the Group's
trading statement on 18 January 2022.

Strategic review

As with the wider audit, the strategic review is also progressing well with
the external advisers engagement now complete. This review covered both market
insights and opportunities as well as operational efficiency levers. In
addition to providing a series of recommendations, the advisers have also
delivered a set of guiding principles for the Group.  The Board are
considering the various options and recommendations made by the advisers and
expects to update with its conclusions at the time of the results in June
2023.

Board update

As previously announced, Therese Neish's twelve-month contract as interim CFO
will come to an end in early October and as such the process to find her
replacement is underway. A further update on this will be provided in June.
Therese will remain on the Board to oversee the audit and sign the financial
statements and thereafter will resign from the Board, expected to be on or
around 1 July 2023.

The process to find another non-executive director to replace Graham
Kettleborough continues and a further update on this will be made in due
course.

For further information, please contact:

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

                                                               www.stmgroupplc.com (http://www.stmgroupplc.com)

 finnCap                                                       www.finncap.com (http://www.finncap.com)
 Matt Goode / Emily Watts / Abigail Kelly - 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 (http://www.abchurch-group.com) (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 focussed 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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