TIDMSTM
RNS Number : 8397G
STM Group PLC
30 November 2020
STM Group Plc
("STM" or "the Company" or "the Group")
Trading Update
STM, the cross-border financial services provider, today
provides the following update on trading for the year ended 31
December 2020, and expectations for 2021 and beyond.
In line with current market expectations, the Board continues to
expect the Group will deliver revenue of GBP23.7 million, EBITDA of
GBP3.6 million, and GBP2.0 million profit before tax for the year
to 31 December 2020.
The strong recurring revenue base from exisiting business gives
the foundation for our future growth and profitability and remains
predominantly unchanged despite the significant macro-economic
challenges.
As part of the 2021 budget planning cycle, the Board has now
taken the decision to adopt a more prudent methodology to its
guidance for the year ending 31 December 2021 ("FY21") and beyond.
This is set against a backdrop of on-going Covid-19 pandemic
concerns, as well as very low interest rates and uncertainty in the
financial markets. This has resulted in a number of changes to the
assumptions being made, predominantly around new business.
The predictability and long-standing history of the QROP and
company & trust businesses has meant that there are minimal
changes to the Board's expectations of performance for these
segments. Similarly, the Board has not changed its expectations for
the auto-enrolment and flexible annuity products.
This revised approach primarily affects the level of new
business for our life assurance and SIPP products.
In relation to the life assurance businesses, we have made the
decision to not include any new policies from EU member states as a
result of the continuing uncertainty surrounding Brexit, and what,
if any, passporting rights Gibraltar will have after 2020 year-end.
In addition, the Board has now assumed that no new short-term life
annuities should be included in the Group's FY21 and FY22
expectations given these products are difficult to predict due to
their long lead time. This is especially so in the current economic
environment although the opportunity and product remain viable.
The Board has also now concluded that it would not be prudent to
include any growth in the new business run rate for our expatriate
SIPP revenue. Similarly, the Board is now assuming new UK SIPP
business will be limited to current partnerships and introducers
only, with a measured new business volume being generated by them
and assuming no revenue from known but as yet untested
partnerships.
Finally, the IT investments, as well as the acquisition
accounting exercise carried out as per IFRS 3 on the Berkeley Burke
acquisition earlier in the year, has resulted in an increased
amortisation charge, a non-cash item that directly impacts our
statutory profit before tax result.
We therefore now anticipate revenue growth of circa 7% for FY21
year-on-year, whilst operating expenses are only forecasted to
increase marginally and thus enhanced EBITDA margins will be
delivered. The improved EBITDA margin is largely as a result of
both direct savings and increased operational efficiencies on the
back of the IT projects invested in during the year. Further
investment is expected in this area which has been reflected in the
Board's revised financial expectations.
Alan Kentish, CEO of STM Group commented:
"The prolongued nature of the Covid-19 pandemic has had a more
significant impact than we previously anticipated. This is
frustrating but does not greatly affect the strong core existing
business which gives us reliable revenue visibility and a stable
long term platform to operate from.
"In light of previous challenges around new business, the Board
has used the 2021 planning cycle to take a more prudent approach to
our forward guidance, given the Covid-19 backdrop, Brexit and the
various challenges faced by our introducer base.
" Notwithstanding the more prudent approach taken, we are
confident in a step-change in profit growth for 2021, albeit from
the lower rebased profit position for 2020. STM has a stable
business model and a strong balance sheet so these short-term
challenges, while unwelcome, require that we adjust our timescale
not our ambition."
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 www.stmgroupplc.com
Alan Kentish, Chief Executive Officer Tel: Via Walbrook
Therese Neish, Chief Financial Officer
finnCap www.finncap.com
Matt Goode / Emily Watts - Corporate Finance Tel: +44 (0) 20 7220
Tim Redfern / Richard Chambers - ECM 0500
Walbrook www.walbrookpr.com
Tom Cooper / Paul Vann Tel: +44 (0) 20 7933
8780
Mob: +44 (0) 797 122
1972
tom.cooper@walbrookpr.com
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 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,
Jersey 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
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTFZMZMLLVGGZM
(END) Dow Jones Newswires
November 30, 2020 02:00 ET (07:00 GMT)
Stm (LSE:STM)
Historical Stock Chart
From Feb 2024 to Mar 2024
Stm (LSE:STM)
Historical Stock Chart
From Mar 2023 to Mar 2024