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LONDON (Alliance News) - STM Group PLC on Tuesday said its profit dropped in the first half of the year due to the release of an insurance reserve from a prior year acquisition.
The financial services group said that in the six months to June 30 its pretax profit fell 12% to GBP2.1 million from GBP2.4 million due to a one-off payment associated with its London & Colonial Holdings Ltd acquisition.
The company acquired London & Colonial in the first half of 2017 and released its GBP500,000 insurance technical reserve, which temporarily boosted revenue. Excluding the reserve, profit increased 11% from GBP1.9 million.
Also excluding the reserve, revenue grew 6% to GBP10.8 million from GBP10.2 million, while actual revenue grew only slightly to GBP10.8 million from GBP10.7 million.
Administrative expenses also played a role the company's reduced profit, growing 6.4% to GBP8.3 million from GBP7.8 million year-on-year.
STM declared a 0.7 pence per share interim dividend, up 17% from 0.6p per share the year before and continuing its progressive dividend policy. The company also confirmed its intention to pay a final full-year dividend, though the amount was not specified.
"The various trading divisions across the group have collectively performed in line with management expectations during the first half of the year, and have delivered a solid set of underlying financial results. This performance gives the board confidence in meeting management expectations for the full year," said STM Chief Executive Alan Kentish.
"The board continues to implement its three year de-risking strategy by looking to introduce more financial services products... In addition, we continue to challenge our processes and systems as part of a programme to increase our profit margins," Kentish added.
Shares in STM group were down 0.1% at 70/95 pence on Tuesday.
