Trading Update and Notice of Results
24 January 2018
STM Group Plc (AIM: STM), the cross border financial services provider, is pleased to announce a pre-close trading update and notice of final results.
Trading Update and review of 2017
The Board is pleased to announce that the Group has traded in line with market expectations, and expects to deliver a profit before tax for the year to 31 December 2017 of not less than £3.8 million (2016: £2.8 million).
A key component enabling the delivery of record PBT was the ability to launch STM's International SIPP (ISIPP) product post the March 2017 UK budget announcement. The Budget effectively made the Recognised Overseas Pension Scheme (ROPS) product for new applications non-viable for non-EEA countries due to the punitive Overseas Tax Charge being imposed. This affected 80% of all new ROPS business for STM. Pleasingly ISIPP volumes are now comparable to the lost ROPS new business.
Just as importantly, our existing business across the Group, particularly in relation to our pensions and life businesses, continues to perform as expected. This annual recurring revenue stream makes up over 70% of our revenue, giving predictability over our underlying monthly performance.
Update on approval and integration of Harbour Pensions Limited
As previously announced on 13 November 2017, STM signed a Sale and Purchase Agreement to acquire the Malta based ROPS provider, Harbour Pensions Limited. This is subject to Malta Financial Services Authority (MFSA) approval, which we understand will be forthcoming shortly. We expect the business, which currently generates in excess of £800k of recurring revenue, to be integrated into STM's Malta pensions business within six months of completion, thus allowing for some healthy efficiency gains.
The Company will continue to look for other possible "bolt on" acquisitions that would allow for enhanced profit margins.
Update on STM Group Plc head office move to UK
The Board took the decision during the fourth quarter of 2017 to review the location of its head office. The Directors have now decided to move its head office out of Gibraltar, and relocate this to the UK as from January 2018. This decision has been well received by intermediaries, investors and other various stakeholders in our business, who recognize the benefits of being based in the UK. This relocation is now in progress.
Commenting on the achievements of 2017 and prospects for the Group, Alan Kentish, CEO of STM said:
"With the UK budget instantly curtailing most of our new ROPS business in March and the exceptional circumstances of the fourth quarter, 2017 has certainly brought its unexpected challenges. Pleasingly, however, management was able to react proactively which allowed the business to perform in line with management expectations.
"The Group's annual recurring revenue continues to underpin our business. However, 2017 has resulted in significant changes to our geographic footprint and business proposition - an upsizing of our UK business and less reliance on our Gibraltar and Malta pension businesses.
"Such a repositioning of our business is time consuming and required some integration during 2017. This investment brings opportunities in 2018 to improve our profit margins.
"The Board looks forward to updating the market in more detail as part of our final results announcement."
Notice of Final results
STM will announce its Final results for the 12 months to 31 December 2017 on 27 March 2018.
The information communicated in this announcement includes inside information for the purposes of Article 7 Regulation 596/2014.
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 which is listed on the AIM Market of the London Stock Exchange. The Group specialises in the delivery of a wide range of financial service products to professional intermediaries and the administration of assets for international clients in relation to retirement, estate and succession planning and wealth structuring.
Today, STM has operations in United Kingdom, Malta, Jersey, Spain and Gibraltar. The Group is looking to expand through the development of additional products and services that its ever more sophisticated clients demand. STM has developed a specialist international pensions division which specialises in UK SIPPs, Qualifying Recognised Overseas Pension Schemes (QROPS) and Qualifying Non UK Pension Schemes (QNUPS). STM has a Gibraltar Life Insurance Company, STM Life 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