Stm Share Discussion Threads

[lundun42] 28/4/2020 12:31

Volume is up significantly on recent levels. A couple of large trades this morning, 100k and 240k shares.

[smithie6] 28/4/2020 09:43

phew, with the share price just draining itself lower over recent days I was starting to worry that there was some info or factor that I wasn't seeing

so, it's a relief to see the share price jump this morning with results

[value hound] 28/4/2020 09:19

Yes, I appreciate it's probably worth more, but selling too soon is always the value player's lot! 😁

[cheshire man] 28/4/2020 08:47

Pleased with results and back to 40p any time soon will do me value hound :-)

[gary1966] 28/4/2020 08:46

28.5pps of cash at year end and nearly 6p of earnings. Revenue largely unaffected by current situation with only £400K at risk. You really think fair value is 40p with integration costs incurred in 2019 and cost benefits to come through in 2020? 70-80p maybe but not 40p.

[value hound] 28/4/2020 08:26

Agreed - worth close to 40pps according to the back of my envelope.

[arthur_lame_stocks] 28/4/2020 08:03

Well results as expected and it doesn't sound like they expect to be too badly affected by Coronavirus. I may buy back in here, the business is in the price for virtually nothing.

[lundun42] 27/4/2020 13:51

My hope for the shares is that they’re a takeover target from a much bigger player. I don’t hold out much hope the share price improving significantly otherwise. Their previous annual reports have always been pretty optimistic about their growth prospects but so far they don’t seem to be delivering much. DYOR but my view comes from info gleaned from their group and company websites etc. for the three main parts, Corporate Trustee, Pensions and Insurance.

The Trustee business is described by STM as legacy and clearly isn’t growing given increased worldwide scrutiny by tax authorities since the panama papers affair which must have killed demand for offshore trusts etc.

Their pensions business is europe with QROPS and now UK Sipps and auto enrolment since recent acquisitions. The QROPS operation is shown as the largest part of their total revenue but growth of this must have been badly hit since HMRC introduced the overseas transfer charge a few years ago and for now all movement of Brits heading to sunnier climes with their pensions in tow will have ended for some time to come. I don’t imagine Brexit will help either on that front. In the UK their SIPP business is probably well below critical mass to compete with the big firms and new SIPPS and transfers from final salary schemes must have dried up since the various scandals that caused the FCA to get involved. Smithie6 - You mention about pension savers continuing to save which is true but it looks like they charge fixed fees for pensions so savers adding more money to pensions has no effect on their revenue. They need new customers to grow their fee income and the current and future effects of virus crisis will surely have an impact on the number of new pensions being entered into, either through increased unemployment and fewer new firms needing auto-enrolment pensions.

STM has two insurance businesses and fyi their solvency reports are on their websites. It looks like the London Colonial part hasn’t written any new business for many years and the STM one has reported declining premium income since 2016. If you discount the one-off changes to the reserves held by the insurance companies the group reports don’t show any real growth in these businesses. They also stated in 2018 that they were moving the STM insurance business to Malta to deal with brexit which was good news but 2 years on it looks like that hasn’t happened yet as the regulator websites still show it in Gibraltar.

If STMs revenue isn’t going to grow they need to reduce their costs if profitability is to at least get back to previous levels. The £500k increased professional insurance cost mentioned in last years profits warning will be baked into the cost base now as well as additional governance costs previously reported so it will be interesting to see if they can do anything about their cost base. In the meantime maintaining the dividend will at least provide some relief to investors.Fingers crossed!

[smithie6] 24/4/2020 18:47

Im hoping the divi still gets paid
..depends how much free cash they have/need I guess

[smithie6] 24/4/2020 18:21

why do you think the outlook will be bad ?

most ppl saving up a pension pot are still ...well, going !

----

& doing on-boarding electronically via IT has been a favourite of this MD for years, its not a new trick that they suddenly have to try to learn due to this virus crisis, they already did it...

[lundun42] 23/4/2020 13:34

I don't see why they postponed the original announcement. I think the FCA (as the listing authority)notice of the day before was just a convenient excuse. They will have already had auditor sign-off at the time they were originally due to announce. They've probably been re-writing the Chairman/CEO/FD sections of the Annual report to be more "current' given the virus crisis. I hope they're not revisiting the planned dividend. AFAIK there has been no regulatory "encouragement" (ex-UK) for this type of business to defer dividends. Let's see what next week brings but I doubt their outlook will be pretty.

[smithie6] 15/4/2020 09:04

results delay is actually a very small delay
&

reporting audited results on
28 April 2020

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"STM Group Plc, the multi-jurisdictional financial services group, will announce its audited results for the 12 months ended 31 December 2019 on Tuesday 28 April 2020.

In line with existing guidance provided in the trading update on 27 November 2019 and on 28 February 2020, STM expects to report 2019 Revenues of approximately GBP23.0m, reported PBT of approximately GBP3.8m, with Underlying PBT* of approximately GBP2.5m.

*Underlying PBT is profit before tax net of non-recurring costs and other exceptional items including bargain purchase gains and technical reserve releases that do not form part of the normal course of business.

For further information, please contact:


.....

[smithie6] 07/4/2020 07:56

I think we have to disagree slightly

yes, overall growth (ie. turnover) would be nice
but at the moment the priority task imo is to get the profit back up towards where it was, after seeing hikes in costs due to taking on more staff to keep regulators happy.

if the co. wanted (after getting the profit back up) to chug along producing say 10% divi yield then imo the share price would respond...& if we can see the share price back at 40-50p then many shareholders will be happy enough, imo....& without needing 'growth' to get there

(although I guess the co. could take on some debt to do an acquisition, it has in the past)

[lord gnome] 07/4/2020 07:48

Relate = rerate. Damned autocorrect again.

[lord gnome] 07/4/2020 07:21

This will only relate when it starts to deliver the growth it has been promising. If the business stagnates, so will the share price no matter how cheap we think the company is.

[smithie6] 07/4/2020 07:06

price target ?

first stop 30p, & then hopefully upwards thru that

(in the medium, after a few months, the co. will need to show that it is reversing the poor news from H2, which I think it can do such as by reducing staff costs & there should be savings arriving now from integration actions after the last acquisition)

[smithie6] 31/3/2020 17:01

...this investing lark seems too easy

buy low, isn't that what they say ?

(there are buys shown today at 22.8p & 23.8p
& also below 20p in the days before)

:-)

[rcturner2] 27/3/2020 09:22

You're probably right, lots of dividends being passed at the moment.

Sensible thing to do really.

[smithie6] 27/3/2020 09:11

divi

many cos. are cancelling their divi due to a drop in income & cash/profit generation....and to hold more cash for risk reduction due to this virus crisis

so there is a chance of X that STM might cancel a divi while the crisis is happening & causing uncertainty

[smithie6] 23/3/2020 17:43

P/E is not the only ratio that exists

some ratios wrt EBITBA or EBIT are also popular

on the financial page on advfn one can see various ratios being given

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PAT ratio is sometimes not such a good/perfect indicator since it can include one offs

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publishing accounts will I think mostly depend on the auditor & his/her availability & delays in them doing their work due to the corona virus crisis

I agree that the divi might be delayed with the accounts (&/or the AGM to approve the divi) being delayed

the rules require the accounts before the end of June ...& if the AGM is then at the end of July...then maybe the record & ex dates for the final divi for 2019 might be at the end of August & payment at the end of Sept.

whereas I think it was in ~May in 2019
so maybe 4 months later this year

[camerongd53] 23/3/2020 14:29

;If you are hinting at a PE Ratio, it is based on Profit after tax not PBT
It is likely to be low which may mean that the shares are cheap.

Th co is following gov't guidance in not publishing accounts.

Given the recent update, I see no need to follow this advice

All it does is probably delay any dividend payment

[smithie6] 23/3/2020 08:52

12.2M mkt cap & 2.5M pbt

a ratio of ?

4.9

'cheap as chips' imo

[smithie6] 20/3/2020 12:24

on 18 March there was an RNS

mentioning that some co./fund in Lichenstein declared that they had gone from owning < 3% to owning 3.59%

(logic, & the share price chart, says that they built up this holding at prices notably higher thsn the current price)

[smithie6] 20/3/2020 10:42

cap. value £12.2M according to this website

& yet the interim report states that the co. has about £18.1M net cash !!

the share price looks virtually gteed to have no downside !

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the co. can keep paying a divi if it wants to
while many cos. will have to pull their divi due to a crash in financial nos. due to the crisis & due to getting low % rate loan money from the Govt....& the Govt. is not going that to allow Govt. cash go out as divis when it should be being repaid to the Govt.