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(Alliance News) - STM Group PLC on Friday said it expects annual earnings to fall as it has been hit by slower than expected revenue progress at its UK self-invested personal pension and Gibraltar life businesses.
Shares in the company tumbled 11% to 30.80 pence each in London on Friday morning.
The Isle of Man-based pensions and insurance administrator said revenue at the SIPP business and the Gibraltar life unit are "being slower to materialise than anticipated".
They will contribute approximately GBP400,000 less to revenue and earnings before interest, taxes, depreciation, and amortization expectations for financial 2021.
"Furthermore, there are a number of large pieces of business currently under negotiation, particularly around the London & Colonial annuity product, that would generate a material uplift in revenue and profitability for 2021. As uncertainty remains as to whether these policies will be incepted prior to year-end, the board has taken the prudent view that these should not be reflected in revised forecasts," STM said.
Ebitda will also be take an approximately GBP100,000 hit due to a "slower than anticipated" reduction in its cost base following the migrations onto new IT platforms for the UK and Gibraltar businesses. It also noted a delay of the migration for the company's Malta business until mid-December.
"Whilst the majority of the savings on software fees have come to fruition, the staff resource savings have yet to substantially materialise but are expected to do so moving into 2022," STM added.
It now expects pretax profit of GBP1.5 million for 2021, on revenue of GBP22.5 million. This would represent a revenue fall of 6.3% from GBP24.0 million in 2020 and a pretax profit drop of 25% from GBP2.0 million.
However, STM predicts somewhat of a bounce in 2022. It is targeting pretax profit of GBP2 million, excluding contributions from the London & Colonial annuity product.
By Abby Amoakuh; abbyamoakuh@alliancenews.com
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