STM Group PLC – STM – AGM Trading Update

STM Group PLC – STM – AGM Trading Update

STM Group Plc (AIM:STM), the cross-border financial services provider, announces a trading update ahead of its Annual General Meeting to be held at 11.00am today.

 

STM acted quickly to implement working from home and workplace practices to meet government guidelines and ensure the safety of employees and customers. These protocols currently remain in place; however senior management is working towards formulating a 'return to office' policy which can be rolled out subject to updated government guidance.

 

Customer service levels have been maintained during this period with a limited impact being seen on the Group's ability to service existing customers and onboard new business. New business pipelines continue to build, albeit conversion timelines on flexible annuity remain slower than anticipated. Trading in the first four months of the year has been in line with the Board's revised expectations.

STM's implementation of its Target Operating Model and IT projects to improve performance and enhance operating margins continue as planned.  Additionally, the launch of the Group's new UK brand - 'Options, for your tomorrow' - post the integration of the Carey Group has been completed successfully, with an accompanying trade press and social media campaign rolled out to build its profile and awareness.

 

Growth through acquisition remains core to STM's medium term ambitions and the Board continues to actively pursue acquisitions that will strengthen the Group's position as a niche pensions administrator in the UK market. 

 

The judgment handed down on 18 May 2020 in favour of Carey in the Adams v Carey case represents an important clarification for the pensions industry.  For the first time, there is clear case law for what is expected of a SIPP provider, although we note that the judge has not yet determined whether he will allow an appeal.  Expectations are that the Financial Ombudsman Service will need to take this precedent into account in any subsequent rulings. 

The recurring revenue business model and strength of the Group balance sheet gives the Board confidence that STM is well placed to navigate the challenges presented by the current COVID-19 pandemic, and can continue to pursue its growth strategy as we emerge from this period of uncertainty.

 

The Board will provide a trading update for the six months to 30 June 2020 ahead of entering its close period in late July.

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