Last checked at 24 May 2017 07:00
STM Group Plc
("STM" or "the Company" or "the Group")
AGM Trading Update
STM Group Plc (AIM: STM), the cross border financial services provider, is pleased to give an update on trading ahead of its Annual General Meeting to be held at 11am today; in particular relating to its business activities subsequent to the 8 March 2017 UK budget announcement ("UK budget") and the implications for the Group's new business pipeline for its QROPs products.
In response to changes imposed by the UK budget on the costs of transferring certain pensions to a QROP, management was quick to launch the International SIPP from its UK SIPP business as an alternative product to the Gibraltar or Malta based QROP proposition. Whilst it is still too early to predict the long term contribution to Group profitability of this product, the Board is pleased to confirm that there has been considerable interest from intermediaries in the two months since launch, and that this has already resulted in a significant uplift in business for the UK operation which was acquired as part of the London & Colonial acquisition announced in September 2016.
The ability to quickly launch this alternative product and promote it as a replacement to the affected QROPs products further validates the Board's strategy of acquiring the UK business, and re-enforces the Group's view that it is at the forefront of delivering financial solutions to the expatriate marketplace.
The expectation that the UK budget changes would impact 80% of new QROP applications has proved accurate. The businesses in Gibraltar and Malta have therefore downsized their new business teams, thereby negating some of the impact on expected profitability for those operations, and the "annuity" nature of the revenue streams of the existing books of business remains wholly unaffected by the changes.
It is too early to say with any degree of certainty the extent to which the International SIPP offering will replace the foregone QROP applications, however, the Group has seen a reasonable uptake of International SIPP applications already and growing interest, hence expects a proportion of the foregone QROPS revenue will be clawed back, albeit at slightly lower margins.
Whilst management is hopeful of increasing revenues from new business applications for its International SIPP, it remains able to further reduce costs in the business development area should the International SIPP not gain traction in certain geographical areas.
Given the impact of the UK budget, the Board continues to explore possible consolidation opportunities in the QROP market, however this initiative remains at a very early stage of progress.
With the imminent launch of the Group's QROP solution for UK expatriates living in Australia, a strong first quarter from its life assurance operations and the actions taken to address the changes in the QROP market, the Board is confident in meeting revised 2017 market expectations.
For further information, please contact:
STM Group Plc |
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Alan Kentish, Chief Executive Officer alan.kentish@stmgroupplc.com | Tel: 00 350 200 42686 www.stmgroupplc.com |
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Therese Neish, Chief Financial Officer therese.neish@stmgroupplc.com | Tel: 00 350 200 42686
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finnCap | www.finncap.com |
Matt Goode / Emily Watts - Corporate Finance Mia Gardner - Corporate Broking | Tel: +44 (0) 20 7220 0500 |
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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 delivery of a wide range of financial service products to professional intermediaries and the administration of assets for international clients in relation to retirement, estate and succession planning and wealth structuring.
STM has operations in the UK, Malta, Gibraltar, Jersey, and Spain. The Group is looking to expand through the development of additional products and services that its ever more sophisticated clients demand. STM has developed a specialist international pensions division which specialises in SIPPs, Qualifying Recognised Overseas Pension Schemes (QROPS), and Qualifying Non UK Pension Schemes (QNUPS). STM has a Gibraltar Life Insurance Company, STM Life plc, which provides life insurance bonds - wrappers in which a variety of investments, including investment funds, can be held.
Further information on STM Group can be found at www.stmgroupplc.com