Trading & Corporate Update and Notice of Results
11 July 2017
STM Group Plc (AIM: STM), the cross border financial services provider, announces the following trading and corporate update:
Trading & Corporate Update:
The Board is pleased to report progress post its AGM trading update issued on 24 May 2017. As previously announced, the Board was confident that the Group's existing recurring revenue model was robust and has therefore been focussed on actively pursuing additional initiatives to further build on the Group's profitability.
As was previously indicated, the anticipated reduction in new QROPS applications has indeed occurred in line with management expectations, and management has pro-actively downsized new business teams in both Malta and Gibraltar accordingly.
One of the above mentioned initiatives was to launch the International SIPP product through its UK based SIPP business, London & Colonial, via STM's worldwide network of financial intermediaries. The International SIPP would be a product offering that complemented the existing SIPP offering for the UK marketplace already in existence at London & Colonial; and expectations were that this SIPP product would replace some of the reduction in QROPS applications.
The International SIPP was launched in April 2017, and management is pleased to announce that the take up of the product has progressed well. Whilst still in the early stages of marketing the new product internationally, the Group has seen a very healthy uplift on new applications from month to month. Current volumes of new applications of the International SIPP are some three times that of the UK SIPP offering, and are likely to continue to build on that ratio.
It is believed that the International SIPP, whilst not having the same potential advantages as that of a QROPS, is a simpler product for the UK expatriate market to understand.
The fact that management took the decision to retain its business development infrastructure, despite the fall in new QROPS business, now enables the Group to continue its further growth in the International SIPP product for the foreseeable future.
International SIPP applications have contributed to a steady second quarter performance, complementing a solid first quarter performance under the old QROPS regime. STM Life has equally had a strong first quarter performance.
Looking forward therefore to the second half of the year, the Board is confident that the Group is performing ahead of existing expectations with management now expecting revenue of £19.8 million and profit before tax of £3.2 million.
In respect of potential consolidation in the industry, management believes that the QROPS markets in Malta and Gibraltar have started to stagnate and there is starting to be a realisation by some of the smaller QROPS providers that have not yet attained critical mass that they will be unable to grow their books of business further. This is starting to generate opportunities for the Group, with its strong balance sheet, to potentially acquire other books of QROPS business.
Alan Kentish, CEO of STM, commented:
"The UK 2017 Spring Budget presented challenges for STM, however I am pleased with how, as a business and a management team, we are starting to overcome them. As expected, our core profitability was unaffected by the budget, given our well recognised and understood recurring revenue model. We feel confident that we have the tools and infrastructure to grow our profit line substantially for the foreseeable future.
"With the possibility of some straight-forward "bolt-on" acquisitions in the QROPS sector, along with the imminent launch of our Australian pension offering, and some further efficiencies in how we process our existing business coming on stream shortly, we are currently optimistic about the Group's growth prospects."
Notice of Results:
STM will announce its Interim results for the six months to 30 June 2017 on Tuesday 12 September 2017.
For further information, please contact:
|STM Group Plc|
|Alan Kentish, Chief Executive Officer||Tel: 00 350 200 42686|
|Therese Neish, Chief Financial Officer||Tel: 00 350 200 42686|
|Matt Goode / Emily Watts - Corporate Finance||Tel: +44 (0) 20 7220 0500|
|Mia Gardner - Corporate Broking|
|Tom Cooper / Paul Vann||Tel: +44 (0) 20 7933 8780
Mob: +44 (0) 797 122 1972
Notes to editors:
STM is a multi-jurisdictional financial services group listed on the Alternative Investment Market of the London Stock Exchange. The Group specialises in the delivery of a wide range of financial service products to professional intermediaries and in the administration of assets for international clients in relation to retirement, estate and succession planning, and wealth structuring.
Today, STM has trading operations in Gibraltar, Malta, Jersey, and Spain. It has also recently opened satellite offices in South East Asia, the Middle East, and South Africa. The Group continues to expand through the development of additional products and services that its ever-more sophisticated clients demand.
STM has, for example, a dedicated international pensions division which specialises in Qualifying Recognised Overseas Pension Schemes (QROPS) and Qualifying Non-UK Pension Schemes (QNUPS); it also has a Gibraltar Life Insurance Company, STM Life Assurance PCC PLC, which provides life insurance bonds - wrappers in which a variety of investments, including investment funds, can be held.
Further information on STM Group can be found at www.stmgroupplc.com