STM Group plc (LON:STM), the multi-jurisdictional financial services group, has announced the unconditional sale of its Gibraltar based trust and company services business and its tax compliance business for consideration of £2.45 million plus net assets upon completion of approximately £0.57 million.
The sale complements the Company’s strategy to focus on its core activities of pension administration and life assurance. The sale proceeds will be used to fund organic growth opportunities and further support the Group’s M&A strategy.
The Sale Companies are principally STM Fidecs Management Limited, STM Fidecs Trust Company Limited, and STM Fiscalis Ltd, along with a number of non-revenue generating support companies, including nominee companies. Together these companies generated revenue of £1.7 million during 2020 and made a profit contribution of £0.3 million to STM Group’s 2020 profits. In addition, there are costs of £0.3 million that were previously recharged to the Sale Companies in relation to shared services which will need to be absorbed by the Group.
The sale has four staged consideration payments totalling £2.45 million, with the amount payable upon completion being £1.25 million, with a further £0.5 million six months after completion, and a further £0.375m 12 months after completion. The final payment, which will be made based upon 2021 audited revenue, will amount to £0.325million and will be subject an adjustment of 1.5 multiple for any revenue deficit below £1.567 million or surplus above £1.6 million. The payment for net assets of approximately £0.57 million will be made partly upon completion, with the remainder being paid over as and when debtors and work-in-progress are collected by the Sale Companies.
The Sale Companies have been sold to the privately-owned Sovereign Group which already has a significant presence in Gibraltar, as well as offices in other jurisdictions that offer similar trust and company services. The signing of the sale and purchase agreements and the regulatory approval from the Gibraltar Financial Services Commission allowing for coterminous completion were finalised after close of business yesterday, 23 March 2021.
Alan Kentish, Chief Executive Officer of STM Group, commented:
“We are delighted that the businesses and our colleagues that work within them, as well as our clients, have gone to a good home at Sovereign, and I am sure that there will be a smooth and seamless transition. Exiting the Gibraltar trust and company business has been a key deliverable on the Group’s roadmap and will allow STM’s executive management to focus on STM’s core activities of pension administration and provision of life assurance wrappers. The release of additional cash will be utilised towards further investment in the business where necessary, as well as contributing cash resources towards our inorganic growth strategy aspirations.”
Notice of Results:
STM will announce results for the 12 months to 31 December 2020 on Tuesday 20 April 2021. The Directors confirm their previous trading guidance for the period, as announced on 3 February 2021.
Investor Presentation: 11am on Thursday 22 April 2021
The Directors will hold a presentation to update investors on the recent disposal of the Gibraltar CTS and Tax Compliance businesses and the results for the year ending 31 December 2020 at 11am on 22 April 2021.
The presentation will be hosted through the digital platform Investor Meet Company. Investors can sign up to Investor Meet Company and add to meet STM Group Plc via the following link https://www.investormeetcompany.com/stm-group-plc/register-investor. For those investors who have already registered and added to meet the Company, they will automatically be invited.
Questions can be submitted pre-event to STM@walbrookpr.com or in real time during the presentation via the “Ask a Question” function.
Analyst Briefing: 9.30am on Tuesday 20 April 2021
An online briefing for Analysts will be hosted by Alan Kentish, Chief Executive, and Therese Neish, Chief Financial Officer, at 9.30am on Tuesday 20 April 2021 to review the results, disposal and growth strategy. Analysts wishing to attend should contact Walbrook PR on STM@walbrookpr.com or on 020 7933 8780.