Pensions group STM’s pre-tax profits fell 72% in 2023 as the takeover by Pension SuperFund Capital continues to rumble on.

In the 12 months to December 2023, STM recorded a pre-tax profit of £400,000 – down from £1.6m in 2022.

STM attributed this to £1.2m of “professional costs incurred” due to the proposed acquisition.

However, STM’s 2023 revenues were up 17% to £28.1m from £24.6m the year before.

This has been attributed to STM’s acquisition of Mercer’s SIPP business at the end of 2022 for £3.3m.

The deal added 2,100 SIPPs and 700 SSAS to STM’s subsidiary and SIPP provider Options. 

Revenues also benefitted from an increase in interest income earned from the group’s and customers’ cash balances.

STM remains in the midst of a prolonged takeover.

Pension SuperFund Capital has created the bidco Jambo SRC for the £40m acquisition which in May was delayed for another month.

These delays have been attributed to regulatory approvals taking longer than expected.

As such, earnings per share have fallen to 70p in 2023 from 344p in 2022 and no dividend has been declared for the most recent year.

According to STM’s results, approvals have yet to be received by regulators in Gibraltar and Malta. However, if approved, STM expects to pay a consideration of 60p per ordinary share to its shareholders.

The acquisition is also conditional on STM selling the UK SIPP Companies by way of an MBO to Pathlines Holdings Limited for £4.5m in cash.

It was noted that Alan Kentish, CEO of STM, has a “significant minority” interest in Pathlines Holdings.

Mr Kentish said: “The group continued to perform in line with the board’s expectations during 2023,” he said, adding that decisions around future technology strategy for the group had been deferred as a result of the ongoing acquisition.

Despite trading in line with expectations, Mr Kentish said that new business volumes across the group were “generally disappointing”.

The CEO added that some areas of the business may see better volumes thanks to improved technology investment but these decisions have been paused due to the ongoing acquisition.

STM added that all strategic projects are on hold for the same reason.

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