While revenue only marginally increased last year, profit for the AIM-listed company hit £2.7m ($3.75m, €3.5m) compared with £1.7m in 2014.
“Despite the evident success of increasing profitability in the year, 2015 has primarily been a year focussed on building our business development platform to give us a stronger and more dominant market position for our UK expatriate pension offering,” said chief executive Colin Porter.
New infrastructure
During 2015, STM opened representative offices in the Middle East, South Africa, and southeast Asia to add to its trading operations in Gibraltar, Malta, Jersey, and Spain.
“2016 is all about capitalising on this business development infrastructure by broadening our global intermediary network, and expanding our product offerings available to such intermediaries,” Porter said in a statement.
“Our pensions business continues to show the largest growth with turnover."
STM has a dedicated international pensions division which specialises in Qualifying Recognised Overseas Pension Schemes (Qrops) and Qualifying Non-UK Pension Schemes (Qnups). It also has a Gibraltar Life Insurance Company, STM Life Assurance, which provides life insurance bonds.
“Our pensions business continues to show the largest growth with turnover in the year of £8.6m (2014: £8.0m). This now accounts for 53% of the group’s turnover (2014: 50%),” he said.
The growth in the pensions business during 2015 was in Malta for attributed to two main reasons.
The first was that it saw a significant amount of new business come in from the Middle East, specifically from countries where a Double Tax Agreement with Malta existed. The second was that its Malta-based US plan continued to gain traction.
“With the second largest concentration of UK expats and with fewer competitors, the US, as expected, remains and will continue to be an area of strong growth for STM,” Porter said.
The company said that as a result Malta remained the larger of its two jurisdictions with pension turnover of £6.3m in 2015, up from £5.5m in 2014, compared with Gibraltar which generated £2.3m of turnover last year just below the £2.5m reported in the previous year.
QROPS outlook
Porter said: “Whilst it is clear that the Qrops market is still very much in its infancy, and will be a continued source of significant revenue and profitability going forward, STM recognises that the natural evolution for this revenue stream is into an administrator of international pensions and this is part of the focus for 2016.
“The global market for international pensions is not easy to accurately value, however it is undoubtedly the case that it offers sufficient scale for long-term growth opportunities for STM.”
STM Life, which provides life assurance portfolio bonds, saw its turnover for 2015 remain constant at £1.4m although annual fees rose to £800,000 compared to £500,000 in 2014.
“This provides a steady annuity income stream going forward,” it said.
As a result of its overall performance earnings per share more than doubled to 3.99p from 1.97p in 2014.
The company said it expects continued growth during 2016 and beyond which, coupled with the ongoing initiatives to offer an Australian pension solution for expatriates, gives STM exciting opportunities to deliver enhanced profitability.
