REG - STM Group PLC - Trading Update

STMAnnouncement

19/11/2021 07:00

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RNS Number : 8951S  STM Group PLC  19 November 2021

STM Group Plc

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

Trading Update

STM Group Plc (AIM: STM), the cross border financial services provider,
announces a trading update for the 12 months to 31 December 2021 and the
outlook for 2022.

 

The second half of the year to date has proved a frustrating period for the
Group, with certain anticipated new business revenues in its UK SIPP business
and Gibraltar life business being slower to materialise than anticipated,
contributing approximately £0.4 million less to 2021 revenue and EBITDA
expectations.  Furthermore, there are a number of large pieces of business
currently under negotiation, particularly around the London & Colonial
annuity product, that would generate a material uplift in revenue and
profitability for 2021. As uncertainty remains as to whether these policies
will be incepted prior to year-end, the Board has taken the prudent view that
these should not be reflected in revised forecasts.

 

The Group's EBITDA position has been further impacted by approximately £0.1
million by a slower than anticipated reduction in its cost base following the
migrations onto new IT platforms for the UK and Gibraltar businesses; with an
additional delay for the migration of the Malta business until mid-December
2021.  Whilst the majority of the savings on software fees have come to
fruition, the staff resource savings have yet to substantially materialise but
are expected to do so moving into 2022.

 

As a consequence of the above, the Board now anticipates that the Group will
report revenue of £22.5 million, EBITDA of £3.4 million and statutory profit
before tax of £1.5 million for 2021.

 

As indicated in the interim trading update, STM has taken significant steps
during the third quarter of 2021 to move to a more efficient target operating
model which, in turn, will see the business return to better operating
margins.  In addition, Christine Hallett, formerly Managing Director of STM's
UK businesses, was appointed as Director of Group Distribution as of 1
November 2021.  Christine is building her new business development team with
a focus on capitalising on the Group's existing business relationships, as
well as those in the pipeline. In this regard, STM expects to go live with two
platforms with a white-label SIPP product prior to the year end.

 

We therefore anticipate profitable growth next year, targeting profit before
tax of at least £2 million, excluding any contribution from the London &
Colonial annuity product referred to above, given the small volume of policies
and uncertainty on timing.  Furthermore, the business continues to look for
acquisition opportunities that would give more scale to its UK businesses.

 

The information communicated in this announcement is inside information for
the purposes of Article 7 of Regulation 596/2014.

 

For further information, please contact:

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

 Nicole Coll, Chief Financial Officer            www.stmgroupplc.com (http://www.stmgroupplc.com)

 finnCap                                         www.finncap.com (http://www.finncap.com)
 Matt Goode / Abigail Kelly - Corporate Finance  Tel: +44 (0) 20 7220 0500

 Tim Redfern / Richard Chambers - ECM

 Walbrook                                        www.walbrookpr.com (http://www.walbrookpr.com)
 Tom Cooper / Paul Vann                          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 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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