STM : Final Results for the 12 months ended 31st December 2023

STM Group plc (AIM: STM), the cross-border provider of retirement solutions, life assurance products and related administrative services, is pleased to announce its audited final results for the 12 months ended 31^st December 2023.

Financial Highlights:

	2023 (reported)	2023 (adjusted)**	2022 (reported)	2022 (adjusted)**
Revenue	£28.1m	£28.1m	£24.1m	£24.6m
Profit before other items*	£3.2m	£5.8m	£3.3m	£4.7m
Profit before taxation	£0.4m	£3.1m	£1.6m	£2.8m
Operating margin before other items	11%	21%	14%	19%
Earnings per share^	0.70p	5.12p	1.42p	3.44p
Cash at bank (net of borrowings)	£13.6m	£13.6m	£13.9m	£13.9m

^* Profit before other items is defined as revenue less operating expenses i.e. profit before taxation, finance income and costs, bargain purchase gain, goodwill impairment and gain on the call options

** Adjusted statistics are net of certain transactions which do not form part of the regular operations of the business as further detailed in Table 2 below

• Group's revenue and profit before tax in line with the Board's expectations;
• Reported revenue up 17 % as a result of the interest sharing policy and full year contribution of Mercer portfolio acquisition.
• High percentage of annual recurring revenue - amounting to 81% of total revenues - provides a base for the Group's ongoing profitability;
• Adjusted profit before other items increased by 24% to £5.8m (2022: £4.7m);
• Adjusted profit before taxation increased by 10% to £3.1m (2022: £2.8m); and
• Profit before taxation decreased by 72% to £0.4m (2022: £1.6m) due to £1.2m professional costs incurred and expensed in relation to the proposed acquisition by Jambo;
• No dividends declared for 2023 in line with the terms announced for the proposed acquisition of STM by Jambo SRC Limited (see below) (2022: 1.2 pence per ordinary share).

Operational Highlights:

• Agreement reached between STM Independent Directors and the board of Jambo SRC Limited ("Jambo"), regarding the terms of the acquisition ("Acquisition") of the entire issued and to be issued ordinary shares of STM by way of a Scheme of Arrangement (the "Scheme").
  • Scheme approved on 6^th December 2023 by 99.9% of independent Scheme Shares voted and by 89.5% of independent Scheme Shareholders who voted;
  • Shareholders entitled to receive 60 pence per ordinary share in cash at completion of the Acquisition as well as a Deferred Consideration Unit which may deliver up to 7 pence per ordinary share in cash; and
  • Acquisition subject to change of control approvals by Gibraltar and Malta; regulatory assessment processes continue in both jurisdictions but approvals yet to be received.
• Acquisition also conditional on STM board selling the UK SIPP Companies by way of an MBO to Pathlines Holdings Limited (a company in which STM CEO, Alan Kentish, and his family hold a significant minority interest) for a total cash consideration of £4.5 million; and
• Integration of Mercer SIPP & SSAS portfolios acquired in September 2022 was completed during the year - businesses performed in line with expectations.

Post Period Highlights:

• After careful consideration of its options for its Options Workplace Pensions Master Trust ("Options Master Trust"), STM signed a commercial contract with Smart Pension Limited ("Smart") on 14^th June 2024;
• Subject to approval by the trustees of the Options Master Trust, Smart will become default provider, and members of the Options Master Trust will transfer over time to Smart's own Master Trust. STM will receive an estimated £4.7 million consideration for such transfers over the next two years;
• An introducer agreement was also signed with Smart offering STM introductory commission to new business relationships introduced to Smart. Additional introducer income from this agreement is estimated at between £1 million and £5 million over the next three years; and
• Since 31^st December 2023 the Group has continued to trade in line with the Board's expectations.

Commenting, Alan Kentish, Chief Executive Officer, said: "The Group continued to perform in line with the Board's expectations during 2023, with the increase in interest income from the revised interest sharing policies introduced during the second half of the year offsetting the continued shortfall in new business across the Group, pending decisions re future technology strategy that have been deferred as a result of the Jambo acquisition process, and increased costs arising from that process and from other factors."

Annual Report & Accounts - the Annual Report & Accounts will be available at the Company's website - https://www.stmgroupplc.com/investor/annual_report

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

For further information, please contact:

STM Group PLC
Alan Kentish, Chief Executive Officer	Via Walbrook PR www.stmgroupplc.com
Cavendish Capital Markets Limited (Nominated Adviser and Broker to STM)
Matt Goode / Emily Watts / Abigail Kelly - Corporate Finance Tim Redfern - ECM	Tel: [phone]
Walbrook	www.walbrookpr.com
Tom Cooper / Nick Rome / Joseph Walker	Tel: [phone]
	Mob: [phone]
	[email protected]

Notes to editors:

STM is a multi-jurisdictional financial services group traded on AIM, a market operated by the London Stock Exchange. The Group specialises in the provision of retirement and life assurance solutions and related administration of client assets.

The Group has operations in the UK, Gibraltar, Malta, Australia and Spain. STM has developed a range of pension products for UK nationals and internationally domiciled clients and has two Gibraltar life assurance companies which provide life insurance bonds - wrappers in which a variety of investments, including investment funds, can be held.

STM's growth strategy is focussed on both organic initiatives and strategic acquisitions.

Further information on STM Group can be found at www.stmgroupplc.com