TIDMSTM
RNS Number : 6223L
STM Group PLC
14 September 2021
STM Group Plc
("STM", "the Company" or "the Group")
Unaudited Interim Results for the six months ended 30 June
2021
& Investor Presentation
STM Group Plc (AIM: STM), the multi-jurisdictional financial
services group, is pleased to announce its unaudited interim
results for the six months ended 30 June 2021.
Financial Highlights:
2021 2021 2020 2020
(reported) (underlying)** (reported) (underlying)**
Revenue GBP11.4m GBP11.4m GBP11.8m GBP11.8m
------------- ----------------- ------------- -----------------
Profit before GBP1.5m GBP1.7m GBP1.8m GBP1.9m
other items*
------------- ----------------- ------------- -----------------
Profit before GBP0.9m GBP0.8m GBP1.0m GBP1.1m
taxation ("PBT")
------------- ----------------- ------------- -----------------
Profit before
other items
margin 13% 15% 15% 16%
------------- ----------------- ------------- -----------------
Earnings per
share 1.28p N/A 1.33p N/A
------------- ----------------- ------------- -----------------
Cash at bank GBP16.5m GBP17.6m
(net of borrowings)
-------------------------------- --------------------------------
Interim dividend 0.60p 0.55p
-------------------------------- --------------------------------
* Profit before other items is defined as revenue less operating
expenses i.e. profit before taxation, finance income and costs,
depreciation, amortisation, bargain purchase gain and gain on the
call options
** Underlying statistics are net of certain transactions which
do not form part of the regular operations of the business as
further detailed in the table below
Highlights:
-- Recurring revenue remains predictable and a cornerstone of
the business, and now represents 88% of the Group's reported
revenue
-- Disinvestment of both CTS businesses allowing the Board to
concentrate on growing our core activities
-- Strategic focus on updating and revising operating model to
drive increased "topline" growth
-- Three of four IT projects now gone "live" with intention of
having two core administration systems - improving operating
margins
-- Adapted to a "hybrid" working environment to keep our
colleagues safe and maximise flexibility and efficiencies
-- The Berkeley Burke acquisition of August 2020 is now fully
integrated and delivering the profit that was anticipated
-- Acquisitions are a core pillar of our growth strategy
Commenting on the results and prospects, Alan Kentish, Chief
Executive Officer at STM, said:
"The first six months of the year have been busy with two
disposals and three of the four key IT projects having gone "live"
. As one would expect with our business model, the recurring
revenue nature of our pensions and life assurance businesses
underpins the predictability of our performance, with some 88% of
total revenue meeting this classification.
"The simplification of our overall Group structure and our
business lines remains a focus of the Plc board, and we are pleased
to be able to state that we have now exited the Trust and Corporate
Services sector, having found good homes for both the Gibraltar and
Jersey clients and colleagues. The Berkeley Burke acquisition of
August last year is now fully integrated and delivering the profit
that was anticipated.
"There continues to be a strong appetite for further
acquisitions as a key pillar for revenue and profit growth, to sit
alongside the organic growth opportunities.
"We look forward to updating shareholders with our progress in
the near future. "
Investor Presentation: 1.30pm on Wednesday 15 September 2021
The Directors will hold a presentation to introduce STM Group
Plc to investors and cover the Interim Results and prospects at
1.30 p.m. on Wednesday 15 September 202 1 .
The presentation will be hosted through the digital platform
Investor Meet Company. Investors can sign up to Investor Meet
Company and add to meet STM Group Plc via the following link
https://www.investormeetcompany.com/stm-group-plc/register-investor
.
For those investors who have already registered and added to
meet the Company, they will automatically be invited.
Questions can be submitted pre-event to STM@walbrookpr.com or in
real time during the presentation via the "Ask a Question"
function.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 (as it forms part of
retained EU law as defined in the European Union (Withdrawal) Act
2018).
For further information, please contact:
STM Group Plc
Alan Kentish, Chief Executive Officer Via Walbrook PR
Therese Neish, Chief Financial Officer www.stmgroupplc.com
finnCap Tel: +44 (0)20 7600 1658
Matt Goode / Emily Watts - Corporate Finance www.finncap.com
Tim Redfern / Richard Chambers - ECM
Media enquiries:
Walbrook PR Tel: +44 (0) 20 7933 8780
Tom Cooper / Paul Vann Mob: +44 (0) 797 122 1972
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
Chairman's Statement
I am pleased to present the results for the first six months of
2021. It has been a period of considerable actual and ongoing
evolution within the Group against a backdrop of the continuing
challenges of the pandemic, where we continue to support all our
colleagues, clients and stakeholders. This backdrop has been made
all the more challenging as it has coincided with us finalising a
number of major IT migration projects, which will ultimately move
the Group to a healthier operating margin.
The recurring revenue base has held up well and continues to
form our foundation stone for building our new business revenues,
which is our stated strategic priority. Revenue (excluding
discontinued operations) grew year on year by 3.9% although the
first half of 2021 was relatively disappointing with regards to new
business volumes in certain areas, with some partnership
arrangements being slower to come to fruition than expected. The
Group has, however, maintained its overall profitability through
prudent and agile attention to our resourcing and cost base.
We continue to realign our business to be more focused on
revenue growth and are now making real tangible changes to our
operating model to support this strong ambition. The investment
that we have made in the infrastructure over the last few years
gives us confidence that we are able to cope with accelerating our
revenue growth and improve operating margins by sweating our
existing infrastructure and capability.
Board Evolution
Going into the second half of 2021, our operating model changes
further as we move down to a two-person Plc executive team, and the
creation of a dedicated senior Group role for business development,
which will be a non-Board post. We will continue to proactively
review our top to toe governance structure and also our stated risk
appetite profile so as to ensure that it is conducive to our stated
top and bottom line growth expectations.
I must express my deepest thanks to Therese Neish and Pete Marr
for their huge contribution to the Group over the years, both of
whom will be stepping down from the Board before my next Chairman's
report.
Finally, I would like to take the opportunity to thank all my
STM colleagues for their continuing hard work in a complicated and
unpredictable working environment.
Duncan Crocker
Chairman
Chief Executive's Review
Overview
The first six months of the year have been busy with two
disposals and the completion of some important IT projects. In
operational terms the business has, overall, performed in line with
management's expectations .
Our UK workplace pensions business delivered higher than
anticipated revenues, although new business revenue overall was
slower than was expected, particularly around UK SIPP business and
our flexible annuity product. In addition, our cost base was
managed accordingly.
As one would expect with our business model, the recurring
revenue nature of our pensions and life assurance businesses
underpins the predictability of our performance, with some 88% of
total revenue meeting this classification.
The delivery of our key IT projects is now well underway, with
three of the four projects now having gone "live". Whilst there is
still development work to be completed, we have moved a very
significant step forward to our strategic aim of having one
administration platform for our private pensions and life
businesses, and one platform for our workplace and occupational
pensions. We believe that moving into 2022, we will see improved
operating margins as a result of these administration platforms,
and that they will help the Group to differentiate itself from
others in the marketplace.
The simplification of our overall Group structure and our
business lines remains a focus of the Plc board, and we are pleased
to be able to state that we have now exited the Trust and Corporate
Services sector, having found good homes for both the Gibraltar and
Jersey clients and colleagues. The Berkeley Burke acquisition of
August last year is now fully integrated and delivering the profit
that was anticipated at the time of acquisition.
Financial review
Financial performance in the period
The Group delivered revenue growth from continuing operations of
3.9% from GBP10.2 million in 2020 to GBP10.6 million) with growth
in revenues from our Pensions division offset by a slight reduction
in our Life assurance division. Reported revenues for the first
half of the year were GBP11.4 million (2020: GBP11.8 million) with
the main reason for the decrease being as a result of the disposals
of the Group's corporate & trustee services ("CTS") businesses
earlier in the year. Revenue contribution from these businesses
accounted for GBP1.6 million in 2020 as compared to GBP0.8 million
in the period from 1 January 2021 to the respective dates of
disposal.
Recurring revenues for the period have remained consistent at
GBP10.0 million (2020: GBP10.0 million), representing 88% of total
revenues (2020: 85%). The sale of the CTS business has contributed
to a higher percentage given that CTS businesses had a high
proportion of transactional based revenue which was not considered
recurring as this was less predictable than the fixed fees
generated from the pensions and life assurance businesses. These
high levels of recurring revenues remain an important key
performance measure for the business and demonstrate the quality of
the Group's revenues.
Profit before other items for the period is GBP1.5 million
(2020: GBP1.8 million) with reported profit before tax of GBP0.9
million (2020: GBP1.0 million). However, during the period there
have been a number of one-off and non-recurring costs such as costs
associated with internal restructures and a capital management
review engagement. Thus, the underlying profit before other items
is GBP1.7 million (2020: GBP1.9 million) and underlying profit
before tax of GBP0.8 million (2020: GBP1.0 million).
In line with revenue, the reason for the decrease in
profitability is largely down to the sale of the CTS businesses.
Whilst not significant these sales have resulted in the loss of
profit contribution and in addition to this some of the centralised
costs having to be absorbed by the wider Group.
The reconciliation of reported measures to underlying measures
is made up of items which are either non-recurring or exceptional
and thus do not form part of the normal course of business. This
reconciliation for all three key financial measures is shown in the
table below:
RECONCILIATION OF REPORTED TO UNDERLYING MEASURES
REVENUE PROFIT BEFORE PROFIT BEFORE
OTHER ITEMS TAX
------------ ---------------- ----------------
2021 2020 2021 2020 2021 2020
----- ----- ------- ------- -------- ------
GBPm GBPm GBPm GBPm GBPm GBPm
----- ----- ------- ------- -------- ------
Reported measure 11.4 11.8 1.5 1.8 0.9 1.0
----- ----- ------- ------- -------- ------
Add: integration and acquisition
costs for H1 - - - 0.1 - 0.1
----- ----- ------- ------- -------- ------
Add: other non-recurring costs - - 0.2 - 0.2 -
----- ----- ------- ------- -------- ------
Less: gain on sale of investments - - - - (0.1)
----- ----- ------- ------- -------- ------
Less: bargain purchase gain - - - - (0.2) -
and derivative asset
----- ----- ------- ------- -------- ------
Underlying measure 11.4 11.8 1.7 1.9 0.8 1.1
----- ----- ------- ------- -------- ------
Cashflows
Cash and cash equivalents at 30 June 2021 were GBP18.6 million
(2020: GBP18.3 million) with cash generated from operating
activities being GBP1.2 million (2020: GBP1.7 million) thus
exceeding our reported profit before tax.
Whilst cash balances have remained fairly consistent as compared
to the same period for the prior year they have increased since the
year end. This is largely as a result of the sales of the two CTS
businesses earlier in the year. These disposals generated net cash
inflows of GBP1.6 million.
During the period we also repaid GBP0.3 million of our bank loan
with GBP1.3 million still outstanding. Net cash and cash
equivalents as at 30 June 2021 were therefore GBP17.3 million
(2020: GBP17.6 million). The Group has a credit facility in place
with GBP3.9 million available to be drawn down for acquisitions and
other growth opportunities.
As would be expected for a Group regulated in a number of
jurisdictions , a significant proportion of our cash balance forms
part of the regulatory and solvency requirements. It is not
possible to determine exactly how much of the cash and cash
equivalents are required for solvency purposes as other assets can
also be used to support the regulatory solvency requirement.
However, the total regulatory capital requirement across the Group
as at 30 June 2021 is GBP16.9 million.
The balance sheet also gives visibility of future revenue and
cash generation and, in line with all administration services
businesses, the Group had accrued income in the form of work
performed for clients but not yet billed of GBP1.4 million as at
the period end (2020: GBP1.7 million). This gives some visibility
of revenue still to be billed and collected as cash at bank.
Additionally, deferred income relating to annual fees invoiced
but not yet earned stood at GBP4.0 million (2020: GBP4.4 million).
This figure also gives good visibility of revenue that is still to
be earned through the Income Statement in the coming months.
Trade receivables as at 30 June 2021 were GBP3.1 million (2020:
GBP3.2 million).
Dividend
I am pleased to announce that the Board has declared an interim
dividend of 0.60 pence per share representing a 9% increase on last
year (2020: 0.55 pence). The interim dividend is expected to be
paid on 17 November 2021 to those shareholders on the register on
22 October 2021. The ordinary shares will become ex-dividend on 21
October 2021.
Subject to trading continuing to perform in line with our
revised expectations, the Board expects to propose a final dividend
for the full year.
Review of operations
Pensions
The pensions administration businesses continue to be the
cornerstone of our operations with this half-year period being the
first full 6 month contribution from the Berkeley Burke acquisition
made in August 2020.
Overall, the pensions revenue for the period was GBP8.7 million
(2020: GBP7.9 million) representing 76% (2020: 67%) of total Group
revenues. Total revenue is split between GBP4.9 million for QROPS
(2020: GBP5.1 million), GBP1.7 million (2020: GBP1.9 million) for
the SIPP and SSAS businesses and a further GBP1.5 million (2020:
GBP1.0 million) for the workplace pensions business. In addition,
this year the Group also has a revenue contribution of GBP0.6
million from third party administration and Group Pension
Plans.
The recurring revenue percentage for this operating segment
remains at 93% in line with that of the same period for 2020. This
combined with the relatively low attrition rates means that it
remains a solid predictor of future divisional profitability.
The new business applications for QROPS and SIPPs have seen a
decrease from the same period last year at 372 (2020: 473).
The final pensions revenue stream within the Group is the
auto-enrolment business acquired as part of the Carey acquisition,
now branded Options Corporate. Whilst this business started the
year with a higher number of members than budgeted, the number of
new members in the first six months has been lower than expected at
circa 30,000. However, July and August have seen some of the
transfers expected in the first half of the year with a total of
circa 17,500 in these two months alone. Management is therefore
confident that this revenue stream will deliver as expected.
Life assurance
Revenue for the combined life assurance businesses amounted to
GBP1.6 million as compared to GBP1.9 million in 2020. This decrease
is largely due to lower investment income and AUA based fees as a
result of the lower interest rates and markets following the global
pandemic as previously reported.
In a similar manner to the pensions operating segment, our life
assurance business also has high recurring fees. A total of 98% of
total revenues for the period are recurring (2020: 95%). The reason
for the increase in as a result of lower new business than the
prior year, thus lower establishment fees.
Our flexible annuity products aimed at the UK market remain the
key focus for sustainable organic growth within our life
businesses. Conversion times for new business remain slow and
unpredictable, and continued effort to expand our intermediary base
is an important part of improving our new business numbers.
In addition, we have relaunched our short term annuity product
during the second half of 2021, and we believe that this will
deliver additional revenue and profit going into 2022.
Corporate and Trust Services ("CTS")
Revenue from the Corporate and Trustee Services divisions are
included up to the date of disposal. In the case of the Gibraltar
business this is for the period from 1 January to 23 March 2021
contributing GBP0.3 million of revenue (2020: GBP0.8 million). The
Jersey business contributed GBP0.4 million in the period from 1
January to 8 May 2021 (2020: GBP0.8 million).
Outlook
The Board has built an infrastructure that will allow for
scalability and accelerated organic growth going forward, and the
focus of the management team must be to deliver on that
proposition. Investment in the revenue generating part of the
business is a commitment of the Plc board. As part of this drive,
the newly created role of Group Director of Business Development
Strategy will initially be taken by Christine Hallett on a
secondment basis. Christine, who was previously managing director
of our Options SIPP and Options Corporate businesses, has a proven
track record in delivering organic growth. The non-board role will
ensure that a stronger emphasis on new business and product
initiatives are implemented across the Group, as well as
capitalizing on cross selling opportunities.
In addition, the more streamlined Group post the disposal of the
CTS businesses, and the stronger and deeper infrastructure that we
have created has allowed the Plc board to revise its operating
model. Part of this review has seen the decision to move down to a
two person executive team at Plc board level. Pete Marr has agreed
to step down as COO during the latter part of the year having made
a significant contribution to the reshaping of the Group operating
model, handing over his reporting lines to the two remaining
executives. Nicole Coll, the incoming CFO from 1 October, will
receive an orderly handover from Therese Neish during the last
quarter of the year.
There continues to be a strong appetite for further acquisitions
as a key pillar for revenue and profit growth, to sit alongside the
organic growth opportunities.
We look forward to updating shareholders with our progress in
the near future.
Alan Kentish
Chief Executive Officer
CONSOLIDATED INCOME STATEMENT
For the period from 1 January 2021 to 30 June 2021
Unaudited Unaudited
6 months 6 months Audited
to to Year to
30 June 30 June 31 December
2021 2020 2020
Notes GBP'000 GBP'000 GBP'000
Revenue 4 11,386 11,810 23,982
Administrative expenses (9,869) (10,002) (20,412)
------------------------------- ------ ---------- ---------- -------------
Profit before other items 1,517 1,808 3,570
------------------------------- ------ ---------- ---------- -------------
OTHER ITEMS
Bargain purchase gain 120 - -
Gains on revaluation of
financial instruments 222 - 59
Finance costs (152) (126) (246)
Depreciation and amortisation (760) (669) (1,363)
------------------------------- ------ ---------- ---------- -------------
Profit before taxation 947 1,013 2,020
------------------------------- ------ ---------- ---------- -------------
Taxation (187) (224) (413)
------------------------------- ------ ---------- ---------- -------------
Profit after taxation 760 789 1,607
OTHER COMPREHENSIVE INCOME
Items that are or may
be reclassified to profit
and loss
Foreign currency translation
differences for foreign
operations (37) 16 (1)
-------------------------------- ------ ---------- ---------- -------------
Total other comprehensive
income/(loss) (37) 16 (1)
-------------------------------- ------ ---------- ---------- -------------
Total comprehensive income
for the period/year 723 805 1,606
------------------------------- ------ ---------- ---------- -------------
Profit attributable to:
Owners of the Company 800 861 1,777
Non-Controlling interests (40) (72) (170)
------------------------------- ------ ---------- ---------- -------------
760 789 1,607
------------------------------- ------ ---------- ---------- -------------
Total comprehensive income
attributable to:
Owners of the Company 763 877 1,776
Non-Controlling interests (40) (72) (170)
------------------------------- ------ ---------- ---------- -------------
723 805 1,606
------------------------------- ------ ---------- ---------- -------------
Earnings per share basic
(pence) 5 1.28 1.33 2.70
Earnings per share diluted
(pence) 5 1.28 1.33 2.70
------------------------------- ------ ---------- ---------- -------------
The results for the period from 1 January 2021 to 30 June 2021
include both continuing and discontinued activities. The results
for the period from 1 January 2020 to 31 December 2020 relate to
continuing activities (see Note 6).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
Notes GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 1,692 2,596 1,970
Intangible assets 20,066 20,634 19,912
Financial assets 697 416 475
Deferred tax asset 85 84 75
Total non-current assets 22,540 23,730 22,432
--------------------------------- ------ ---------- ---------- -------------
Current assets
Accrued income 1,447 1,692 1,319
Trade and other receivables 9 7,619 5,062 9,073
Cash and cash equivalents 8 18,574 18,279 16,409
Assets held for sale - - 5,988
--------------------------------- ------ ---------- ---------- -------------
Total current assets 27,640 25,033 32,779
--------------------------------- ------ ---------- ---------- -------------
Total assets 50,180 48,763 55,211
--------------------------------- ------ ---------- ---------- -------------
EQUITY
Called up share capital 12 59 59 59
Share premium account 22,372 22,372 22,372
Retained earnings 13,836 12,951 13,541
Other Reserves (482) (430) (447)
--------------------------------- ------ ---------- ---------- -------------
Equity attributable to owners
of the Company 35,785 34,952 35,525
Non-controlling interests (485) (347) (445)
--------------------------------- ------ ---------- ---------- -------------
Total equity 35,300 34,605 35,080
--------------------------------- ------ ---------- ---------- -------------
LIABILITIES
Current liabilities
Liabilities for current tax 890 1,216 1,197
Trade and other payables 10 11,681 10,944 14,974
Liabilities directly associated
with assets held for sale - - 1,154
--------------------------------- ------ ---------- ---------- -------------
Total current liabilities 12,571 12,160 17,325
--------------------------------- ------ ---------- ---------- -------------
Non-current liabilities
Other payables 11 2,309 1,998 2,806
--------------------------------- ------ ---------- ---------- -------------
Total non-current liabilities 2,309 1,998 2,806
--------------------------------- ------ ---------- ---------- -------------
Total liabilities and equity 50,180 48,763 55,211
--------------------------------- ------ ---------- ---------- -------------
CONSOLIDATED CASH FLOW STATEMENT
For the period from 1 January 2021 to 30 June 2021
Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
Notes GBP'000 GBP'000 GBP'000
Operating Activities
Profit for the period/year before
tax 947 1,013 2,020
Adjustments for:
Depreciation of property, plant
and equipment 369 398 793
Amortisation of intangible assets 391 271 570
Write-off of intangible assets - - -
Loss on sale of fixed asset - - -
Taxation paid (447) (100) (299)
Bargain purchase gain - - -
Unrealised gains on financial
instruments at FVTPL (222) - (59)
Share based payments - - -
(Increase)/decrease in trade and
other receivables (996) 703 (215)
Decrease/(increase) in accrued
income 291 (506) (485)
Increase/(decrease) in trade and
other payables 817 (96) (12)
Net cash from operating activities 1,150 1,683 2,313
---------------------------------------- ------ ---------- ---------- -------------
Investing activities
Disposal of investments 2,369 - -
Cash disposed of as part of investment
disposal (39)
Purchase of property, plant and
equipment (193) (40) (70)
Increase in intangible assets (546) (417) (875)
Consideration paid on acquisition
of subsidiary - - (1,447)
Cash acquired on acquisition of
Subsidiary - - 27
Reclassification to assets held
for sale - - (725)
Net cash used in investing activities 1,591 (457) (3,090)
---------------------------------------- ------ ---------- ---------- -------------
Cash flows from financing activities
---------------------------------------- ------ ---------- ---------- -------------
Proceeds from Bank loans 500 - 1,600
Bank loan repayment (138) (500) (1,200)
Lease liabilities paid (437) (444) (843)
Treasury shares purchased - - -
Dividends paid 7 (505) (446) (772)
Net cash from financing activities (580) (1,390) (1,215)
---------------------------------------- ------ ---------- ---------- -------------
Increase/(decrease) in cash and
cash
equivalents 2,161 (164) (1,992)
---------------------------------------- ------ ---------- ---------- -------------
Reconciliation of net cash flow
to movement in net funds
Analysis of cash and cash equivalents
during the period/year
Increase/(decrease) in cash and
cash equivalents 2,161 (164) (1,992)
Effect of movements in exchange
rates on cash and cash equivalents 4 37 (5)
---------------------------------------- ------ ---------- ---------- -------------
Balance at start of period/year 16,409 18,406 18,406
Balance at end of period/year 18,574 18,279 16,409
---------------------------------------- ------ ---------- ---------- -------------
STATEMENT OF CONSOLIDATED CHANGES IN EQUITY
For the period from 1 January 2021 to 30 June 2021
Foreign Shares
Currency Based
Share Share Retained Treasury Translation Payments Non-Controlling Total
Capital Premium Earnings Shares Reserve Reserve Total Interests Equity
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
------------- --------- --------- --------- --------- ------------ --------- --------- ---------------- ---------
Balance at
1 January
2020 59 22,372 12,536 (549) (59) 162 34,521 (275) 34,246
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Profit for
the year - - 1,777 - - - 1,777 (170) 1,607
Other comprehensive income
Foreign
currency
translation
differences - - - - (1) - (1) - (1)
Transactions with owners, recorded directly in equity
Dividend
paid - - (772) - - - (772) - (772)
Treasury
shares
purchased - - - - - - - - -
Share based
payments - - - - - - - - -
Changes in ownership interest
31 December 2020 and
1 January
2021 59 22,372 13,541 (549) (60) 162 35,525 (445) 35,080
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Profit for
the year - - 800 - - - 800 (40) 760
Other comprehensive income
Foreign
currency
translation
differences - - - - (35) - (35) - (35)
Transactions with owners, recorded directly in equity
Dividend
paid - - (505) - - - (505) - (505)
Treasury
shares
purchased - - - - - - - - -
Share based
payments - - - - - - - - -
Changes in ownership interest
At 30 June
2021 59 22,372 13,836 (549) (95) 162 35,785 (485) (35,300)
------------- --------- --------- --------- --------- ------------ --------- --------- ---------------- ---------
NOTES TO THE CONSOLIDATED RESULTS
For the period from 1 January 2021 to 30 June 2021
1. Reporting entity
STM Group Plc (the "Company") is a company incorporated and
domiciled in the Isle of Man and was admitted to trading on the
London Stock Exchange AIM Market on 28 March 2007. The address of
the Company's registered office is 18 Athol Street, Douglas, Isle
of Man, IM1 1JA. The Group is primarily involved in financial
services.
2. Basis of preparation
Results for the period from 1 January 2021 to 30 June 2021 have
not been audited.
The consolidated results have been prepared in accordance with
International Financial Reporting Standards ("IFRS"),
interpretations adopted by the International Accounting Standards
Board ("IASB") and in accordance with Isle of Man law and IAS 34,
Interim Financial Reporting.
3. Significant accounting policies
The accounting policies in these consolidated results are the
same as those applied in the Group's consolidated financial
statements for the year ended 31 December 2020. No changes in
accounting policies are expected to be reflected in the Group's
consolidated financial statements for the year ended 31 December
2021.
4. Segmental Information
STM Group has four reportable segments: Pensions, Life
Assurance, Corporate Trustee Services and Other Services. Each
segment is defined as a set of business activities generating a
revenue stream and offering different services to other operating
segments. The Group's operating segments have been determined based
on the management information reviewed by the CEO and Board of
Directors.
The Board assesses the performance of the operating segments
based on turnover generated. The performance of the operating
segments is not measured using costs incurred as the costs of
certain segments within the Group are predominantly centrally
controlled and therefore the allocation of these is based on
utilisation of arbitrary proportions. Management believe that this
information and consequently profitability could potentially be
misleading and would not enhance the disclosure above.
The following table presents the turnover information regarding
the Group's operating segments:
Operating Segment Unaudited Unaudited Audited
6m 2021 6m 2020 2020
GBP'000 GBP'000 GBP'000
Pensions 8,690 7,930 16,488
Life Assurance 1,638 1,945 3,709
Corporate Trustee Services 774 1,613 3,167
Other Services 284 322 618
---------------------------- ---------- ---------- ---------
11,386 11,810 23,982
---------------------------- ---------- ---------- ---------
Analysis of the Group's turnover information by geographical
location is detailed below:
Geographical Segment Unaudited Unaudited Audited
6m 2021 6m 2020 2020
GBP'000 GBP'000 GBP'000
Gibraltar 3,172 4,080 7,999
Malta 445 3,855 7,625
United Kingdom 3.670 2,828 6,379
Jersey 3,822 773 1,483
Other 277 274 496
---------------------- ---------- ---------- ---------
11,386 11,810 23,982
---------------------- ---------- ---------- ---------
5. Earnings per Share
Earnings per share for the period from 1 January 2021 to 30 June
2021 is based on the profit after taxation of GBP760,000 divided by
the weighted average number of GBP0.001 ordinary shares during the
period of 59,408,088 basic.
A reconciliation of the basic and diluted number of shares used
in the period ended 30 June 2021 and 30 June 2020 is as
follows:
2021 2020
Weighted average number of shares 59,408,088 59,408,088
Share incentive plan - -
Diluted 59,408,088 59,408,088
=================================== =========== ===========
6. Discontinued operation
On 23 March 2021 the Group disposed of its Gibraltar company and
trustee services ("CTS") and tax compliance businesses. On 8 May
2021 the Group disposed of its Jersey based CTS businesses. These
businesses were previously classified as held-for-sale and are now
discontinued operations.
There results for the discontinued operation included in the six
month period ended 30 June 2021 are shown below. There are no
results for discontinued operations included in the six month ended
30 June 2020 and the year ended 31 December 2020:
GBP'000
Revenue 785
Expenditure (720)
Results from operating activities 65
Income tax _
Results from operating activities,
net of tax 65
Gain on sale of discontinued operation 120
Profit from discontinued operation 185
---------------------------------------- --------
The profit from the discontinued operation is attributable
entirely to the owners of the Company.
7. Dividends
The following dividends were declared and paid by the Group
during the period:
Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
0.85 pence (2020: 0.75 pence) per qualifying
ordinary share 505 446 772
---------- ---------- -------------
8. Cash and cash equivalents
Cash at bank earns interest at floating rates based on
prevailing rates. The fair value of cash and cash equivalents in
the Group is GBP18,574,000.
9. Trade and other receivables
Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Trade receivables 3,077 3,236 3,450
Receivables due from insurers - - 3,600
Prepayments 581 879 634
Other receivables 3,962 947 1,389
-------------------------------
Total 7,620 5,062 9,073
------------------------------- ---------- ---------- -------------
10. Trade and other payables
Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Deferred income 4,014 4,369 3,647
Provision - - 3,600
Trade payables 549 659 368
Bank loan 552 700 552
Lease liabilities 651 788 783
Contingent consideration 700 - 700
Other creditors and accruals 5,215 4,428 5,324
---------- ----------
11,681 10,944 14,974
---------- ---------- -------------
In November 2020 the Company signed a credit facility with Royal
Bank of Scotland (International) Ltd for GBP5.50 million. The
facility has a 5-year term with capital repayments structure over
ten years and a final instalment to settle the outstanding balance
in full at the end of the 5 years. At the period-end GBP1.6 million
of this facility had been drawn down with GBP1.3 million
outstanding. Interest on the drawn funds is charged at 3.5% per
annum over the Sterling Relevant Reference Rate, with the undrawn
balance charged at an interest rate of 1.75% per annum over the
Sterling Relevant Reference Rate.
The facility is subject to customary cashflow to debt service
liability ratios and EBITDA to debt service liability ratio
covenants tested quarterly and is secured by a capital guarantee
provided by a number of non-regulated holding subsidiary companies
within the Group and debenture over these companies.
11. Other payables - amounts falling due in more than a year
Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Lease liabilities 831 1,508 1,070
Bank loan 773 - 1,048
Deferred tax liabilities 535 279 522
Provisions for dilapidation costs 170 211 166
2,309 1,998 2,806
---------- ---------- -------------
12. Called up share capital
Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
GBP'000 GBP'000 GBP'000
Authorised
100,000,000 ordinary shares of GBP0.001
each 100 100 100
Called up, issued and fully paid
59,408,088 ordinary shares of GBP0.001
each 59 59 59
---------- ---------- -------------
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END
IR DKNBDABKDACD
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