Stm Share Discussion Threads

[smithie6] 17/4/2016 14:00

..sustainability of profits

I dont agree with that -ve comment

For 2015 revenue was flat but profit jumped. That shows that it is profitable business imo & high profit margin.

2) DeVere

The co. has I think made solid steps to reduce % of business that is via De Vere by
- expanding business in middle east via Malta office
- setting up an agent for USA , Asia etc


3) STM business model is imho that they provide the core products & use agents & 3rd parties to sell.
Advantages & disadvantages.
The profitability % shows imo that the model works.

4) STM profit comes from a large book of clients each signed up to STM products. Like at a bank the chance that all those clients suddenly leave is imo negligible.

That book of clients and income is imo quite valueable and is owned by STM.

5) De Vere is one related party deal.
There are many more.
If related parties are in financial sectr and bring business to STM then imo that is good news.

6) what % of new business in 2015 was from De Vere

7) Finance sector
Leaders working in the sector are likely to be motivated by money rather than be charity workers or Oxfam v.teers.....
Look at all the bank scandals.
If dont like then one can invest in Green Inv. Funds if prefer.

[mark2market] 17/4/2016 13:00

Some research notes:

- most new STM business comes to them via deVere Group (Edward Roskill interview)
- STM seems to have little historic profitability (Paul Scott, Stockopedia)
- deVere Group CEO has a sizeable stake in STM (bought a 24% stake in 2012: ), but gradually reducing (last sale in 2015)
- the internet has plenty of less than complimentary stories about deVere Group (many actually appear on the review section of their own website , but more salacious ones elsewhere)
- deVere Group CEO cited by Panorama investigation into rogue offshore pension investments (

For STM there is concern about sustainability of profits, given the reliance on deVere (Paul Scott, Stockopedia)
As an independent financial adviser, is deVere supposed to be a whole-of-market adviser?
The media has previously written about conflicts of interest:

[billdobbin] 17/4/2016 10:58

STM = Simon Thompson Myopia

[mark2market] 16/4/2016 17:45

Assume the VCP is a done deal and will be approved at the Isle of Man AGM.

Allegedly it’s `more in line with corporate governance best practice and the market construct around short and long-term incentive design’.
Market construct?!?

The `Performance Period’ is a retrospective one from 10th March 2015.
Why that specific date?
The share price was 30.5p - before pushing from Shares Mag and Simon Thompson (blindspots about corporate governance, offshore risk, etc)
Really `corporate governance best practice’???

[smithie6] 16/4/2016 10:43

...Slight change of view...
..scheme is phps not so bad but I plan to vote NO

'cause
- opaque & imo impossible to understand
- is it total EBITDA rather than per share
- 3 schemes in parallel. I dont like/agree
(Options + annual bonus + new VCP)
- no mention of debt, I dont want dirs to be incentivised to pile up debt (VLK have). = risk
- VCP is poss. to allow nonexecs to be rewarded. VCP scheme creator is a non exec. Written partly for himself ?
- VCP scheme excludes interest cost. Ridiculous
- schemes should be phps based on EPS or adjusted EPS. Excluding I, T etc is imho wrong.
- I would prefer old fashioned options. EPS scale .X share options at mkt price if hit 5p. Z if hit 6p. T if hit 7p

The remaining boss should imo perhaps not need 3 incentive schemes since he owns just under 1/5th of company. 5-6M pound incentive.
Some scheme is perhaps a good idea noting that the MD gave in his notice but this one looks badly prepared imho
MD serving out 12 months notice. NEVER EVER seen that. Perhaps he is not going, a lever to force new incentive scheme and then announces that will stay ?

---
Good perf. over last 3 years should be rewarded....well big profit from 3M options...
And dirs phps rewarded themselves in advance via convert. loans....they made loads imo. (Loans which imho the company phps did not need , got loads of cash)

[billdobbin] 15/4/2016 18:20

STM = Snouty-snouty Trough-trough Management

[smithie6] 15/4/2016 17:02

"The Executive Directors are also entitled to a bonus of £nil as at 31 December 2015."

very strange imo since 2015 produced PAT more than x2 wrt 2014
and miles higher than 2013

but perhaps they are due a bonus but not valid on 31st Dec for some tech. scheme reason
maybe not due until audited accounts issued, ie. now

[smithie6] 15/4/2016 16:42

I know the Vislink saga fairly well....and Im critical of their MD and his greed....

...I dont think the mkt will see the STM scheme as negative, we'll see

Alan Kentish was the develop. dir.....and Mr Porter is serving out his notice...
so many shareholders will be keen to be sure that Mr Kentish stays at the comp.

Personally I like the idea of the STM ex develop. dir. being the boss since he will know the co. and the products and mkts like the back of his hand. And big holders perhaps happy to give him some % of the co. to help ensure he stays.

(working out 12 month notice seems very unusual to me.....general feeling I have is that director behaviour seems OK....although the dept of reality inside related party transactions we cant see, but they have produced a big jump in PAT, so fair enough I guess)
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(bit confused about some parts of incentives....20% EPS increase and link with just the share price.....not clearly written imo....but Im not that fussed...
only starts above 60p, which is 20% share price rise from current sp)

[mark2market] 15/4/2016 16:25

One can only hope this VCP doesn't have the same effect as it did on Vislink

[sladdjo] 15/4/2016 15:44

Think that the fall is due to comp trying to introduce a VCP for execs. Want to give ~8% of increase in share price above 60p between now and Mar '19 to 2 execs @mo, tho will prob be a new CEO joining shortly who will also share in that. Good thing is that comp have flagged it in advance of the AGM and given shareholders the chance to vote for it. I feel 60p is quit a low hurdle, so am minded to vote against...

[stewy_18] 15/4/2016 10:36

The shareprice fluctuation is happens everytime Simon Thompson writes a positive report in IC. It rises then seems to drift. I'm not sure about this company. The figures going forward look really good, but I'm not sure about the product they are selling. Does that matter? Not really as long as they keep selling it. If they can do 6 pence EPS this year, it really starts to look cheap. I watch from the sidelines for the time being.

[impvesta] 15/4/2016 10:20

I've just noticed the Annual Report is now available on the company website, as flagged up by a 13th April 10:40 am RNS which I hadn't seen. Not sure if this had anything to do with the fall in share price yesterday (14th). Haven't had a chance to study the Annual Report yet.

[smithie6] 15/4/2016 09:32

Any views on this at this price ?

Buy opportunity phps, around a support level ?

[smithie6] 17/3/2016 10:00

A lot of strange largish trades this morning.....and a few yesterday. Any guesses ?

Bed and SIPP or similar ?

(& why do lots of trades around 6k pnds & not 1 combined trade which would normally be cheaper ?)

.....whatever...seems to show support for the current share price ?

[smithie6] 11/3/2016 09:53

..imho its worth noting how illiquid this is..

Low volume today if exclude the 1 big trade early on....yet price is up about 4%.

No surprise.....like a private co. that is listed...so many shares held by directors & Miton fund

..just need buy/sell ratio over coming months to show marginal extra buying interest and the share price would keep going up
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Hopefully the dip to 50p was a once only...profit taking after run from 20p to 70p...& hopefully is now filled/over....& hopefully established a new price base to move higher from.

[smithie6] 10/3/2016 12:54

..creating 19 small buy trades

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'Consolidation in the sector'
Anyone know what acquisitions have been happening ?.
...with international presence, large client book, high margin and cheap price.....STM is possible target imo

[philw2009] 10/3/2016 12:19

Another very bullish article by Simon Thompson in the IC today.

hxxp://www.investorschronicle.co.uk/2016/03/10/comment/simon-thompson/lowly-rated-cash-rich-pensions-play-G8EtHeKH5NHpxFT5nlfcDM/article.html

"So, with the investment made in new offices last year, and the business now reaching critical scale, a significant proportion of incremental revenue is now flowing straight to the bottom line. This explains why the company should be able to grow pre-tax profits by £1m to £3.7m and boost EPS from 3.8p to 4.9p based on a relatively modest rise in revenues. And with net cash equating to 13p a share, this means that the cash adjusted PE ratio is set to fall by a quarter from 11 to 8.5, an incredibly low valuation both in nominal terms, relative to peers, and based on recent consolidation activity in the sector."

[qs99] 02/3/2016 12:40

thanks and agreed

[smithie6] 02/3/2016 12:22

Ah, cash pile above 10M.....yep...this year...
And after 3yrs 16M nett cash !!...or there abouts

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( possible instant upside imo 'if' at some time the co. makes an acquisition using some of that cash...to obtain more sales outlets/routes....fairly obvious possibility imo)
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Hopefully at some time the share price will go above last ATH around 70p. Might take a bit of grinding.
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So banks paying around 0% interest.....property in uk is seen as possible bubble ( London starting price collapse imo)...European & UK growth is just above 0....deflation in EU..
So imho this thing producing about 10% wrt EV ( cash removed) and with recurring income and profit looks a good investment imho

[qs99] 02/3/2016 11:33

indeed....cash generation is pretty impressive IMO, won't be long IMO before it goes through £10m....

[smithie6] 01/3/2016 12:36

..if remove cash then EV is about 25M
..while PBT is 2.7M
Low ratio imho...cheap imo...as S.Thompson has noted and will Im sure repeat in his comments on these results.

[montyville2] 01/3/2016 12:33

Bought a few more, like the look of the future prospects

[smithie6] 01/3/2016 10:10

:-)




Nice to see
- PBT/revenue increasing......highlighting the profitability & hence value of the business
- positive for future...including international expansion
- mkt will like the divi news, perhaps attracting new share buyers


Fulltimeinvestors.com

[johnwise] 01/3/2016 08:07

STM Group PLC Final Results

RNS Number : 5407Q


Commenting on the results and prospects for STM, Colin Porter, CEO, said:

"2015 has undoubtedly been a transformational year for STM in respect of profitability, however equally in building the product and distribution platform for future growth.

"The global market for specialist international pension administration products is very much in its infancy and will continue to be a significant source of revenue and profitability going forward. This presents a very attractive opportunity for both the business and our investors alike for the foreseeable future."
Final Results