STM Group suffers fall of profits and earnings on eve of acquisition by pensions rival

The retirement and estate planning firm that owns Options Pensions suffered a fall in profits, reported earnings per share and reported operating margins in 2023 on the eve of the completion of its sale to a rival firm.

Earnings at STM Group, which in December last year accepted a bid from Bidco, the acquisition arm of Pension Superfund, rose by 17 per cent last year, according to its audited results, up from £24.1m to £28.1m. The rise was attributed to its interest sharing policy and the first full year contribution of its own acquisition of Mercer in 2022.

But despite its growth, the Isle of Man-based company, which is listed on London’s Aim market, saw a substantial drop in reported profit in the year ended December 31, which fell from £1.6m in 2022 to £0.4m last year.

The firm’s operating margin before other items also fell, down from 14 per cent in 2022, to 11 per cent last year.

Alan Kentish, STM Group’s 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 [Bidco] acquisition process, and increased costs arising from that process and from other factors.“

The acquisition is set to complete tomorrow.