UK-headquartered financial services firm STM Group has reported a 10.2% rise in revenue to £11.9m ($14.7m, €13.3m) for the first six months of 2019.
This is an increase from £10.8m in the same period ending 30 June 2018.
Also, profit before tax for H1 2019 amounted to £3.4m, compared to £2.1m in 2018.
Alan Kentish, STM chief executive, commented: “The second half of the year is about concluding the initiatives commenced in the first six months so that these benefits start to materialise.
“STM will have a more UK focused product offering and, as part of that strategy, is in the process of recruiting a UK-based head of distribution and product.
“Our UK company re-brand and re-launch of niche UK pension products will set out our stall for the future.
“We continue to look for earnings enhancing or strategic acquisitions in the Qrops (qualifying recognised overseas pension scheme) or UK pensions market.
“We are pursuing a number of potential acquisitions and our acquisition team has never been busier, however, with many of the acquisition targets being privately owned, we have found the timing of the sale process varies.
“Our ambition remains that acquisitive growth will form a meaningful part of our overall growth rate.”
The firm also reported a rise in its pensions’ business revenue to £6.8m, compared to £5.9m a year earlier.
Total revenue for the pensions segment is split between:
|H1 2019||H1 2018|
|Self-Invested Personal Pension (Sipp) business||£1.3m||£800,000|
|Workplace pensions business||£500,000||N/A|
It said that new business applications are dropped to 349 in H1 2019, compared to 671 for the same period in 2018.
This was driven by a range of factors including Brexit concerns by UK expatriates, fewer financial advisers willing or able to advise on defined benefit transfers, and a general scepticism by some of the private pension sector in the UK “as a result of ongoing high profile civil cases in the UK courts”.
Life assurance divisions
STM’s revenue for its combined life assurance businesses increased to £2.8m from £2.2m in H1 2018.
It said that the first half of 2019 saw “significant investment in management time in a new suite of products aimed at the UK pension market”.
The UK firm believes the products will “gain traction during the latter part of the year with the benefits materialising in 2020”.
It also said that, with the uncertainty of Brexit, it is reshaping its businesses to have one that is UK facing and the other focusing on the EU market.
STM Life is in the process of re-domiciling to Malta to facilitate this, however it may not be finalised before Brexit.
The company admitted is has some concerns about being able to “incept new policies” during that period, it is confident that the move should not affect its “ability to continue servicing existing customers”.
The best performing region during H1 2019 was the UK, which more than doubled its revenue to £1.74m from 835,000 a year before.
This rise came after the firm completed the acquisition of Carey Administration.
STM’s Gibraltar revenue came in at £5.1m in the first six months of 2019, compared to £4.5m in 2018.
The Jersey business reported a fall in revenue to £1.01m (2018: £1.4m), while the Malta operation mostly stayed the same.