International financial services provider STM Group has reported a small decrease in revenue, profits and Ebitda in its unaudited interim results for the six months to 30 June 2022.
Both revenue and Ebitda were down around £100,000 from H1 2021 to £11.3m ($13m, €13m) and £1.4m, respectively; while profit before tax fell to £500,000 from approximately £900,000.
Chief executive Alan Kentish attributed the falls to a “slower than anticipated new business” for the first half of the year amid the economic backdrop.
At the same time, both the pensions and insurance sides of the business reported an uplift in revenues compared to H1 2021.
Pension revenue for the first six months of 2022 was £9.1m – up from £8.7m – making up 81% of total group revenues, compared to 76% of the previous comparable period.
This is split between £4.9m for Qrops – similar to H1 2021 – £1.9m for the Sipp and Ssas businesses (up from £1.7m), and a further £1.8m from the workplace pension arm (£1.5m in 2021). The remaining £600,000 – same as in H1 2021 – was a revenue contribution from third party administration and group pension plans.
Kentish added that “significant new business” is currently being generated for H2 2022 by the company’s niche annuity products.
In terms of life insurance business, revenue was £1.9m compared to £1.6m in the first six months of last year.
But STM added that like-for-like revenue increased by around 6.5% in H1 2022 compared to the first six months of 2021, as the latest results did not include the trust businesses it sold last year – namely its Gibraltar subsidiary in March 2021, and its Jersey trust and company services arm in May 2021.
UK focus
In the results, STM said it is looking to continue to grow its UK offering following the recent purchase of Mercer’s Sipp and Ssas division, which is set to double its business in the country.
Additionally, the company revealed that Options Sipp is partnering with London-headquartered online trading provider IG Group to offer a pensions Sipp wrapper.
STM was unable to provide further details on the strategic partnership in time for publication.
Kentish said: “As previously reported, the first six months of the year have been slower than anticipated for new business, although both the pensions and insurance businesses show an uplift in revenues relative to the prior year comparable period.
“The completion of the Sipp and Sass portfolio acquisition from Mercer as well as the continued development of several strategic partnerships in the UK further augment the group’s UK focus and provide scale for further growth. Equally, the corporate pensions business continues to grow despite changes in legislation coming into effect.
“Cost management and operating efficiencies remain key areas of focus for the board. There remain a number of exciting opportunities which, albeit slower to come to fruition than we would have liked, makes us optimistic for the future despite the unsettled macro-economic outlook. In particular, our niche annuity products are now starting to produce significant new business.”
Outlook
Looking ahead, Kentish said he anticipates the second half of the year to materialise a “healthy uplift in new business” for the life assurance and annuity divisions, as well as an increase for the Sipp business via STM’s strategic partners.
He added that some of the company’s core products will be made available on platforms as well, which should drive even more business to the group.
In other news, STM will undergo a board reshuffle as chair Duncan Crocker and non-executive director Malcolm Berryman have decided to step down from their respective roles.
Nigel Birrell, group chief executive of Gibraltar-based Lottoland since May 2014, will become group chair and independent non-executive director going forward.
