Pre-EBITDA earnings touched £1m, up from £700,000 in 2011, on revenue that rose 18%, the London-listed company reported today.
The £4.4m charge resulted from required amortisations of intangible assets from a number of businesses that the company acquired some years back.
‘Profitability …will follow’
STM chairman Julian Telling said the results did not reflect the “tireless” efforts made over the year to build the business for the future, and added in a statement that the board was confident profitability would follow “in the near term”.
He described the “dramatic growth” in STM’s pensions division, particularly in Malta, as “the highlight of the year” for the company.
“The mantra that ‘significant future growth for the Group is in its pensions and life assurance businesses’ has finally come to fruition for the pensions division, with expectations that STM Life will follow in 2013,” he added.
Based in Gibraltar, STM Life is a provider of life insurance bond investment ‘wrappers’ of the type marketed by major life companies. At least until now, the STM Life division has not been a key player in this business. However, the company sees potential for growth in this area given what Telling said was "pressure on non-EU-admitted insurers to cease taking on EU business", and STM Life’s existing, "innovative, fully-compliant EU life wrapper".
"As part of this focus the group has already recruited a senior figure in the industry to develop the Germanic markets," Telling said. He did not name the senior figure.
Year of transformation
Telling said 2013 would be “a year in which STM will complete the transformation into a multi-disciplinary international financial services provider, whose products cater for the international community”.
The shares fell by 1p or 3.33% in morning trading, to 29p, putting them 20% below their 52-week high of 36.25p, reached in May of last year. They have been as high as 73.5p, in mid-November 2007, and fell to 13p at one point in 2011.
As reported, Nigel Green, the chief executive and founder of the deVere Group, bought a 24% stake in STM last March. The stake was acquired as part of a £1.59m purchase of new shares in the company.
Based in Gibraltar and incorporated in the Isle of Man, STM has been listed on the Alternative Investment Market of the London Stock Exchange since 2007.
STM is perhaps best known to financial advisers with expatriate clients for its active role in the development and provision of qualifying recognised overseas pension schemes (QROPS). It was among the first companies to offer a scheme in Malta, which was first recognised by HM Revenue & Customs as a jurisdiction to which UK pensions could be transferred at the end of 2009.
It has also developed schemes that accommodate the transfers of UK pensions of individuals retiring to or returning to the US, and in 2011 introduced a “multi-jurisdictional” scheme to enable expatriate UK pensioners to move their pensions between countries as needed, without incurring additional fees.
Historically STM’s business has been in corporate and trustee services (CTS), but this sector has not been growing very much recently, and Telling’s statement indicates that it is not expected to in the near future, "given the economic climate and the moral tax argument".
For this reason, he added, "the transition for STM, from bespoke solutions in the CTS business to a range of products offerings across the trust, companies, pensions and life assurance sectors is well on its way."
The company has also reduced its reliance on the UK markets for growth, while expanding into new markets, Telling said.
To see the full STM results statement on the company’s website, click here.
