Total revenue at the Gibraltar-based, AIM-listed provider of cross-border financial services grew by 30%, to £6.6m, during the same period, compared with the first half of 2012, the company reported today.
The results marked a return to profit for STM in the half, which also posted a profit in the first half of 2011, before it ran into trouble due to problems in the Eurozone that began in the second half of that year, and hit the company’s corporate and trustee service (CTS)-providing business, which back then accounted for 75% of the group’s annual revenue.
Now, though – and not by accident – the pensions business is its largest division, and as reported, the company is expanding as well into the European life insurance product space, beginning with a bond that its Life division designed specifically for the German market.
In a statement this morning, chief executive Colin Porter noted that increase in margins observed in the first half of 2013 came "as the group, and more specifically the pensions division, reaps the benefits of the investment made in staff and product development during 2012".
Porter added that "significant effort" had been put into the STM Life offering, which the company’s management "is confident…will add to the group’s financial performance in the second half of the year".
STM Group posted an after-tax loss in 2012, after it took a one-off amortisation hit of £4.4m, on revenue that grew by almost a fifth. At the time, STM chairman Julian Telling described the “dramatic growth” in STM’s pensions division, particularly in Malta, as “the highlight of the year” for the company.
Evolving business
In his statement today, Porter described how STM is continuing to move away from being mainly a CTS provider, although he noted that the lingering effects of the Eurozone crisis continue to impact on that part of the business, with a resultant decrease in both the number of trusts and companies and companies under management in STM’s Gibraltar CTS operation in particular.
"2013 is the first full year where the client losses in 2012 have fully impacted revenue," he added.
"Furthermore, management continues to find the development of new business challenging."
STM’s Jersey CTS business meanwhile, which is mainly focused on the UK non-dom market, has been affected by "stricter requirements from HM Revenue & Customs", which has resulted in a slight decrease in income during the first half.
"STM’s strategy will be maintained: to increase the group’s share of existing markets, and also to find new markets for our products and services," Porter concluded in his statement.
"STM continues to increase its distribution network for both its pensions and life products, together with identifying new markets for its core business."
He said the board expected turnover and profitability to increase in the second half of the year, "as it reaps the benefits of the investments made in staff and product development" last year.
This afternoon in London, shares in STM were trading around 28p, up around 0.5p, or 1.8% from their close yesterday.
To read and download the STM results, click here.
