STM Group completes acquisition and reports uplift in revenue

STM Group Plc (LON:STM), the cross border financial services provider, has announced the completion of the acquisition of the portfolio, net assets and trustee companies of the SIPP and SSAS businesses from Mercer Ltd, a trading update for the 6 months to 30 June 2022, Board changes and notice of its Interim Results announcement.

Completion of Acquisition

Further to the announcement made on 26 July 2022, STM is pleased to announce the completion of the acquisition of the portfolio, net assets and trustee companies of the SIPP and SSAS businesses, from Mercer Ltd. 

Trading Update

STM expects to report revenue for the six months to 30 June 2022 of approximately £11.3m (2021: £11.4m) with both the Pensions and Life Assurance businesses showing an uplift in revenue compared to the previous half year position.  Gibraltar and Malta revenues remain consistent and in line with management expectations. The corporate pensions business revenues continue to grow, however revenues in the UK SIPP business are behind plan as not all strategic partners are fully live.  The Group expects to report EBITDA for the period of approximately £1.4m (H1 2021: £1.5m) and net cash as at 30 June 2022 of £17m (2021: £16.5m).

As previously stated, new business levels in the first half of 2022 were slower than anticipated, however the Board anticipates a healthy uplift in new business flow for its Life Assurance businesses in relation to certain of the Group’s annuity products, as well as increased new business flows for its SIPP business through strategic partners.

In this regard, STM is pleased to announce that the Options SIPP is partnering with IG Group to provide its pension SIPP wrapper.  The solution will enable clients to invest using IG’s share dealing and model portfolio services.  This service will launch shortly and be made available to new and existing IG clients.

As part of STM’s strategic partner program, the Group anticipates that other core products will also be available in the near future via these platforms.

Development of the target operating model continues to improve efficiency and increase margins, primarily driven by the roll-out of the internal administration system and the automation of processes.

Given the opportunities in relation to new business revenue, the Board remains confident that 2022 overall profit expectations will be met.

Appointment of new Chair

The Company is pleased to announce the appointment of Mr Nigel Birrell as non-executive Chairman with immediate effect. Concurrent with this appointment, Duncan Crocker has resigned from the Board with immediate effect, as indicated in the announcement dated 4 August 2022.

Mr Birrell has served as the Chief Executive Officer of Lottoland Group since May 2014. Lottoland is an online bet on lottery operator based in Gibraltar, which operates across multiple territories and has 16 million customers. Mr Birrell has overseen Lottoland’s geographic and product expansion into multiple markets. Prior to this, Mr Birrell was a group director on the executive board of bwin.party digital entertainment plc (now Entain plc) the then world’s leading on-line gaming business.

Prior to bwin.party, Mr Birrell was a main board director of the FTSE 250 media group HIT Entertainment PLC.

In his early career, Mr Birrell worked as an investment banker with both Dresdner Kleinwort Benson and later Donaldson, Lufkin & Jenrette (now Credit Suisse). He holds a Bachelor of Laws (LLB) from the University of London (Queen Mary College) and is a Solicitor of the Senior Courts of England and Wales.

Mr Birrell is non-executive Chairman of Duke Royalty Limited (AIM listed) and also holds a number of other private company non-executive positions.

Commenting on the STM Group Board appointment Alan Kentish, Chief Executive Officer, said:

“On behalf of the Company I am delighted to welcome Nigel to the Board and thank Duncan for his contribution. Nigel brings considerable public company and financial services experience and has a track record of growing businesses.”

Notice of Interim Results

The Company expects to announce its full Interim Results for the 6 months to 30 June 2022 on 14 September 2022.

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