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(STM) STM Group share chat

Discussion in 'General Share Chat (STM)' started by Groucho, Dec 7, 2018.

  1. Groucho

    Groucho Member

    30 November 2018

    STM Group Plc

    ("STM" or the "Group")

    Trading Update

    STM Group Plc (AIM: STM), the cross border financial services provider, announces a trading update on expected performance for the full year ending 31 December 2018, demonstrating year on year growth in underlying profit before tax.

    As detailed in the Group's interim results to 30 June 2018, profit before tax for the first six months of the year amounted to £2.1 million, being consistent with the Board's expectations for the year to 31 December 2018, despite having absorbed £0.3 million of professional fees incurred as part of the Skilled Person's review on the Group's business in Gibraltarcompleted by Deloitte in June 2018 and the implementation of the recommendations from the report.

    It is anticipated that in the last quarter of 2018 there will be a significant release from the London & Colonial Assurance plc technical long term insurance fund which the Directors currently anticipate will be at least £0.5 million, which will contribute to the Group's anticipated profit before tax for the year. The exact amount to be released is currently being calculated by the Group's appointed actuary. For the year ended 31 December 2017 an equivalent technical reserve release amounted to £1.3 million and therefore contributed £1.3m to the overall profit before tax result of £4.0 million for the year.

    During the second half of 2018, the Group's other life company, STM Life Assurance PCC plc, has incurred a number of one-off costs in relation to uncollectable policy fees amounting to £0.2 million, as well as a policy cancellation and closure exercise for uneconomical policies amounting to £0.1 million. Additionally, there has been a reduction in the forecasted new business pipeline to the year end by £0.2 million, reflecting a timing delay in some policies not likely to incept until 2019.

    The anticipated release of the technical reserve provides a significant positive contribution to earnings, as it has done in previous years. Including this anticipated contribution, the Board remains confident that the Group will report overall profit before tax for 2018 in line with its previous expectations, with underlying profit before tax (excluding the impact of profits from reserve releases and one off costs) expected to increase year on year. Trading across all other Group divisions has been in line with management's expectations.

    The Board looks forward to providing a further update once the technical reserve release from London & Colonial Assurance plc has been finalised, as part of its pre-close trading statement in January 2019.

    Alan Kentish, Chief Executive Officer of the Company, commented:

    "We are pleased with the underlying trading of the Group for the year to date, which demonstrates steady growth against our previous year. The year so far has seen significant change, and it is apparent that we have experienced a number of material one-off costs as well as ongoing costs as part of our enhanced governance, both of which will impact our profitability but make our businesses more robust. Despite these headwinds, the growth in our underlying business and the anticipated release of the technical reserve mean we remain confident of being in line with management's expectations of overall profit before tax for the full year."
  2. Groucho

    Groucho Member

    Simon Thompson - Investor’s Chronicle 7/12/18 target price 90-100p (current sp 55p)
  3. Groucho

    Groucho Member

    26 March 2019

    STM Group Plc

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

    Final Results for the

    12 months ended 31 December 2018

    STM Group Plc (AIM: STM), the multi-jurisdictional financial services group, is pleased to announce its audited final results for the 12 months ended 31 December 2018.

    Financial Highlights:

    · Revenue for the period £21.4 million (2017: £21.5 million)

    · Underlying* revenue for the period of £20.5 million (2017: £20.2 million)

    · Profit before tax for the period of £4.0 million (2017: £4.0 million).

    · Underlying* Profit before tax for the period of £3.7 million (2017: £3.2 million)

    · Underlying profit margins increased to 18% (2017: 16%)

    · Recurring revenue** for 2018 of £16.3 million representing 76% of total revenue (2017: 75%)

    · Final dividend of 1.3 pence per ordinary share recommended (2017: 1.2 pence)

    · Strong balance sheet with net cash and cash equivalents of £15.6 million (31 December 2017: £15.1 million)

    * Underlying statistics are net of certain transactions which do not form part of the regular operations of the business

    ** defined as annual management charges and contractual fixed fee agreements

    Operational Highlights:

    · Continued strengthening of our governance platform and risk management framework

    · Strong board composition - new members - chairman, non-executive director and COO

    · Proven bolt-on acquisition strategy with completion of Harbour and fully integrated within 6 months

    · Carey Pensions acquisition - stronger focus on the UK market

    · Access to more products

    · Entry into the ever-growing UK workplace pensions solution market

    · Consolidation opportunity now possible for workplace pensions

    · Continued investment in technology with vision of one Group wide administration platform

    Commenting on the results and prospects for STM, Alan Kentish, Chief Executive Officer, said:

    "We are pleased with another solid profitable year at STM, which has been coupled with significant operational progress within the Group. Our management, governance and risk structures have been strengthened to ensure that we are well placed to integrate our recent acquisitions, meet our industry compliance needs and can rely on a robust infrastructure to support future growth.

    "Our markets continue to evolve and present opportunities for well funded operators. STM intends to be at the forefront of product development and sector consolidation and has a refined short-term strategy to maximise this opportunity."

    Chairman's statement

    It gives me great pleasure to present my first set of financial statements for STM as Chairman of the Board.

    Our 2018 result has been the backdrop to another year of great change for STM in a number of ways which have all contributed in one way or another to making the Group a stronger and more robust operation.

    My tenure as Chair started in September, and it has certainly been a busy six months or so, with a focus on continuing to build on the governance structure and core capabilities as set out earlier in the year. In addition, we have further refined our growth strategy around the organic and acquisitive opportunities in both our existing and complementary markets.

    Our 2018 profits are underpinned by the predictable recurring revenue stream across the various trading operations of the Group, which has allowed for the delivery of a healthy £4.0 million profit before tax; a profit similar to 2017 and a 16% increase in underlying profitability, despite having absorbed certain costs associated with strengthening the corporate governance structure.

    Progress has been made on key fronts during 2018 and early 2019.

    Operationally, we have delivered on the strategy to be a more UK focussed group building a head office team and having more products focussed on the UK market. We successfully fully integrated the Harbour business by September of last year having only completed in February, and we identified a further UK acquisition target, namely Carey Pensions, that received FCA approval in February 2019.

    From a governance point of view, we have appointed a further independent NED to the Board, recruited a Chief Operating Officer who started in January 2019 to support our existing executive team, and have appointed a UK based full time Group Company Secretary who will join us in April 2019.

    My vision for our future is to chair a well structured, operationally disciplined and ambitious business that can deliver on the expectations of all its stakeholders. In this regard, the executive team has refined its short-term strategy to be executed by the strengthened Board, to achieve step-change growth in the coming years. This will be a combination of organic growth and acquisitions using resources available to the Group, and a more structured service proposition that can support all of the trading operations overall, where appropriate.

    I would like to take this opportunity to personally thank all of the Group's Directors, executive and all our colleagues across the Group for their efforts during 2018. I look forward to 2019 as STM sets out on the next leg of its stimulating and progressive journey.

    Duncan Crocker


    STM Group PLC - Final Results @STMGroupLtd https://www.voxmarkets.co.uk/rns/announcement/6db2dd85-696a-4f74-93cc-3e27f937fc0a
  4. Groucho

    Groucho Member

    20 June 2019

    STM Group Plc

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

    Carey Group bargain purchase gain

    & Operational Update

    STM Group Plc (AIM:STM), the cross border financial services provider, is pleased to update the market on the Carey acquisition and operational progress.

    Carey Group Acquisition

    Following the acquisition of the Carey Group in February 2019, the Board and its professional advisors have determined that this acquisition has resulted in a bargain purchase gain as defined by International Financial Accounting Standard ("IFRS") 3, Business Combinations. This is in effect negative goodwill as a result of the consideration paid plus the amount of the non-controlling interest being lower than the fair value of the net assets acquired, which comprise mainly the SIPP and the Corporate Pension client portfolios. The value of the bargain purchase gain has been calculated at £2.7 millionand is recognised immediately in the profit and loss account. IFRS 3 allows for goodwill to be adjusted for up to a year following the date of acquisition and therefore this bargain purchase gain is provisional while the intricacies of the entities acquired are fully understood.

    The Carey integration is progressing well, with a focus of Milton Keynes becoming STM's main UK hub and to move Carey's SIPP business onto STM's own proprietary administration platform. The UK workplace pensions market remains in a state of flux as Master Trusts consider whether to progress with The Pensions Regulator authorisation process, and this has benefitted Carey Corporate through increased new business. Notwithstanding the increase in member numbers, we expect Carey Corporate to remain loss making for 2019 at £0.6 million, but with an anticipated break-even from early 2020. In addition, short term one-off integration costs of £0.5 million for the SIPP business will be absorbed during 2019, but timings will mean that the full integration benefits, expected to amount to annualised cost savings of £0.7 million, will not be fully realised until 2020.

    Operational Update

    The Board, under the guidance of Pete Marr, the recently appointed COO, has now adopted an enhanced Target Operating Model which will introduce an improved governance and accountability framework. Costs of implementing this new operating model include recent and intended hires, partly strategic and partly operational, as well as additional Independent Non-Executive Directors to most of the subsidiary boards.

    The above appointments and one off costs incurred in 2019 will add an additional £0.5 million of expenses in the short term, but it will allow the Group to accelerate its organic growth and acquisition strategy in a controlled manner, thus protecting shareholder value and benefitting the bottom line in the future.

    As previously notified in the Group's 2018 results, the Group exited the insurance management business. Consequently, there will be a write-down of the goodwill on the discontinued insurance management division on the Company's 2019 interim balance sheet amounting to £0.7 million.

    Alan Kentish, CEO of STM Group, commented:

    "It is always pleasing to announce a bargain purchase, but more importantly the Carey acquisition has opened the door to product offerings and market sectors that were previously inaccessible to us. The bargain purchase gain does however generate a benefit in the first half of the year which is not reflected in the second half or in future comparative periods.

    "The UK workplace pensions sector in particular is seeing significant change, and with the number of Master Trusts reducing as a result of the authorisation process, I see our UK corporate pension business becoming more valuable, and benefiting from a differentiated revenue stream that most of our SIPP competitors do not have.

    "We have stated that we are keen to acquire portfolios of QROPs, SIPPs and SSASs, as well as auto-enrollment Master Trusts. The additional investment in infrastructure and resources under the new Target Operating Model will allow us to acquire, and integrate quickly and efficiently, without impinging on our ability to run the business day to day. All of the above makes for an exciting 12 to 18 months ahead where we expect to see solid revenue and profit growth."

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