Stm Share Discussion Threads

[lundun42] 01/4/2021 16:05

Probably explains todays share price fall.

"Carey Pensions to pay compensation after split court ruling"

httpx://international-adviser.com/carey-pensions-to-pay-compensation-after-split-court-ruling/

[smithie6] 30/3/2021 08:31

( post moved to correct msg board)

[smithie6] 25/3/2021 11:30

STM still has an office in Spain
with turnover reduced in H1 to 300k, from 500k. I would guess that it is loss making with such a low turnover, so phps the co. might be looking to sell that as well.

....however, Sovereign didn't want/need it as part of the recent acquisition, or it wasn't offerred.

[smithie6] 24/3/2021 19:49

maybe in the coming days we might see a new profit, turnover etc forecast from Edison or similar

but this 600k reduction in profit won't help/benefit that forecast

but the nett cash situation has increased
& the nett cash versus the cap. value makes the shares attractive imo

(& last part of the bank debt was paid off last October)

[smithie6] 24/3/2021 15:46

(updated)

the share of annual plc costs charged to the subsidiary of £300k
must be included in the subsidiary accounts otherwise these costs don't exist !!

so, imo, it means that the subsidiary made an annual profit of £600k "before" counting the £300k/year costs that the subsidiary pays to the group plc, giving a result of £300k.

so, selling the subsidiaries reduces the on-going profit by ~600k !
which is a notable % of the group profit. :-(

but the STM MD hopefully has a good use for the money obtained, we've seen a number of acquisitions over recent years & the co. has stated that it is looking at possible acquisitions.

[lundun42] 24/3/2021 15:21

I'm not great with numbers but in simple terms won't the group profit be reduced by £600k? In addition to the £300k profit contribution from the sold subsidiary the announcement also mentions £300k of recharged costs that will now have to be absorbed by the Group.

[smithie6] 24/3/2021 14:19

looks like the subsidiary sale produces a cash lump for the co. of about 2 million pounds (once assets of about 0.6 million is paid for, over X months)

which gives more headroom between the regulatory cash/funds reqt. & what exists to meet the reqt.
(& the regulatory reqt. is slightly reduced. is it £300-400k ??)

& the cash input gives extra firepower to do an acquisition(s) or if none is subsequently made then the cash could pay off a chunk of the remaining bank loan & reduce the interest cost (& reduce the reduction in profit)
My guess is that an acquisition will be made, at some time.

but, the annual group profit has been reduced, by 300k, unless a profitable acquisition is made using the cash from the sale

[smithie6] 05/2/2021 11:53

(maybe the FD stepping down might also be linked to STMs growth in the UK

during most of the FDs 17 years at STM, the co. was Gibraltar based. So logic says that the FD lived/lives in or near Gibraltar & that their friends/family/hobbies are there.

RNS says that the new FD will be UK based, Milton Keynes I assume since that is STMs UK base.
So, perhaps the FD was travelling a fair amount to the UK (& phps to the subsidiary in Malta as well), & phps some pressure from the BOD to relocate to Milton Keynes & phps they didn't want to do it & phps they prefer to stay in the Gib. area. (better weather, drive to go skiing at Sierra Nevada, Spain, Algarve & Africa on the doorstep).

[smithie6] 04/2/2021 11:18

" CFO resignation voluntary or pushed"

voluntary imo
been at STM for 17 years !
so her loyalty book is fully stamped up I think

....says that going to look at other opportunities, but who knows perhaps just going to retire & spend more time doing hobbies, the garden, time with friends/family

one assumes she is quite financially solid after getting a high income for many years & house prices & stock mkts also having risen a lot during that time, & imo is probably able to retire if they chose to.

& being the FD year after year must be quite a grind I assume. & with the increased supervision inside the company phps that has increased. & with the different subsiduaries in different countries with different tax laws it must be a fair task to manage/supervise it all.

& is it now about 250 staff, & costs of about 20 million, a lot movement of pay, NI, etc etc to be supervised, although sure there are staff to do most of that.

apart from acquisitions (2 in 3 years ?) it is recently surely almost identical work each year for the FD, which I assume hence might be a grind, little challenge. The main tasks at STM are I think trying to increase sales, any remaining integration tasks (of acquisitions) & doing the IT projects to automate more of the work; neither being tasks involving the FD.

-------

The MD was previously the IT director & he got the MD job imo in order to apply those skills....& he is part way through the job of renovating/increasing the use of IT (to get the costs down) so he isn't going to go anywhere at the moment, imo....

[lundun42] 04/2/2021 09:50

Maybe the other news also had some effect. Senior management changes often provoke investor activity and a change of sentiment. CFO resignation voluntary or pushed? - hard to tell with carefully worded announcements but perhaps a sign of other Board level change, CEO, etc? but IIRC the CEO owns a chunk of the company so maybe not? However a price move in the right direction regardless.

[smithie6] 03/2/2021 16:23

the recent trades at 26p, 27p, 28p show how sensitive a share price is to the mood of holders....& the boredom factor
& I guess due to mental stop losses

I'm sure that some people sold just because they saw the fall in price from 30p to sell to 26-27p & they started worrying & then just sold; rather than looking at the fundamental numbers.

[smithie6] 03/2/2021 16:20

"if we take the Finncap number of £4.7 million for ebitda

& then take off ~£200k for interest on the loan of £5.5 million (£150k might be closer since >50% of the loan is unused at the moment, so lower % interest rate)

& say £ 500k for tax

would give adjusted (*1) PAT
= £4.7 - 200k - 500k
= £4 million

*1. excluding depreciation & amortisation since they are not cash charges

£4 million versus a cap. value of £18 million.
& this is also roughly the cash generation excluding one offs such as loans, acquisition payments.

nuts imo. bargain"

[jonnyupite1] 03/2/2021 14:43

Seems a real bargain at this price regarding net cash . Earnings not disappointing considering. Future should be promising

[arthur_lame_stocks] 03/2/2021 08:34

Decent enough trading update today. I'm happy to hold.

[smithie6] 25/1/2021 15:13

AFH (wealth management co. based in the midlands with 20,000 clients) has received an agreed takeover offer

share price is up.

is STM a takeover target ?

----

AFH looks to have revenue & PBT of about 3x that for STM but AFH has a cap. value of 195million, much higher than 3x the cap. value of STM (£18 Million. x3 =~ £54 million)
clearly wealth management is much more highly valued than what STM does !!

[smithie6] 19/1/2021 11:46

...I was just thinking out loud

about any options for STM that might get the share price up

them getting bought up if the expected/predicted increased performance (PBT of 4.7 million for 2021 :-) ) doesnt happen (I think it will) is another option

[gaiusgracchus] 19/1/2021 09:29

The idea that STM can transition to becoming an investment manager is frankly bizarre. Administration is a very boring business where the aim is to not make mistakes. From a client of STM's point of view, you want STM to be reliable but also quite invisible. And low risk. No screw ups. This mindset does not marry with investment managment where you have to take (calculated) risks all the time. If they were to "pivot" to IM I'd be inclined to sell out.

[smithie6] 18/1/2021 12:43

perhaps it might also need a critical mass, enough financial advice work to cover the set up & operating costs

or maybe the agents for STM provide the financial advice to clients & hence STM couldn't.

[lundun42] 18/1/2021 11:57

Yes AFH is different. It provides financial advice/investment management services not administration services like STM. If you look at AFH recurring revenue they seem to be charging/earning around 1% on funds under management so if STM were to be a manager rather than an administrator of client funds that could bring revenues of say £60-£80m on that £8bn so yes perhaps STM should look at it.

[smithie6] 18/1/2021 07:40

AFH financial has reported annual results

(AUM at ~6 billion, less than STM but slightly different services I think)

(results, basically identical to the year before with "small" improvement)

includes following text

"The Board believes demand for financial planning-led wealth management services will continue and towards the end of the reporting period saw a gradual increase in net inflows of client funds"

....imo STM will see enquiries & new more accounts/clients pick up as we move further into the vaccination phase for Covid & people start being more confident about the future.

[smithie6] 17/1/2021 19:16

not a small outfit imo

8.7 billion of assets under their supervision/holding

one can imagine that that takes a lot of time & work to build up, over some years

while sure, the cap. value is low, in recent months; personally I obviously think it will go up in 2021, as the news will start changing & increases in profits are going to be reported

---

staff numbers are I think 250'ish

monthly wages, social security, office costs, etc etc

it is a noticeable enterprise imo, but sure it is small compared with Aberdeen Asset Mnmgt, XPS pensions etc etc

----

old style brokers
they still seem to be alive, Shore Capital, Jarvis, & others
....how they have changed in recent years, I don't know
...sure a lot of people want to manage their share buys/sells themselves & via a cheap on-line facility but there are people that don't have the time, the interest or the skill & that prefer to pay for a licensed person to manage their shares & also give them overall financial guidance & advice about passing on their assets to their kids/friends & minimising inheritance tax etc etc.....

[lundun42] 16/1/2021 13:34

Perhaps they could but isn't it a crowded market now and with the prevalence of fully online services hasn't the old fashioned local stockbroker adviser model had to adapt or die? But I presume that STM are well placed to understand who advises on/manages their clients assets and what funds/managers are selected so maybe that could expose an opportunity?

I think any potential shareholder when looking at it would think STM a very complicated business for such a small outfit. After patiently hanging in to see what positives may have emerged over recent times, I've switched out now and invested elsewhere because as an investor I prefer to be in rather more focused businesses in the Fin Serv space where I can see such focus delivering on growth prospects. Maybe if STM streamlined itself and projected a much clearer, simpler message about the countries/markets/business it's in and their potential, it would attract a much higher rating than the one it currently seems to be stuck with.

[smithie6] 15/1/2021 10:26

do you think it might be an option over time ?

---

" ..gain any useful performance track record"

most old fashioned brokers offer a discretionary broking/admin. service
...& many local asset administrators in UK towns...
...& I think they say that many fund mngrs fail to beat the relevant index...
...
could STM also not branch out to do it as well ??

[lundun42] 14/1/2021 14:21

BM is an asset Manager, STM is (amongst the myriad other things in the group) simply an asset Administrator - big difference. If STM wants to capture a chunk of the investment management value chain on the client assets it administers, I imagine it'll take a while to achieve, especially to gain any useful performance track record.