Stm Share Discussion Threads

[chrisdgb] 28/7/2011 13:18

Great thanks for that GHF, just needs some buying to get things moving..

[glasshalfull] 28/7/2011 11:33

Hi chris - I've been in contact with the company and don't anticipate a t/s but merely Interim result announcement in September, 5-6 weeks time.

The Chairman dipped his toe in for 85k shares at 25p in May so I would imagine that this act coupled with lack of a t/s will see them nicely in-line and v good value at the current price.

FinnCap have 35p target price and EPS forecast at 3.5p for current year. Too low for company that is cash generative, net cash on B/S, providing a D/V yield of 3% and all on a PER of 6. All IMHO.

Regards
GHF

[chrisdgb] 28/7/2011 11:06

wonder if we will be getting a trading update soon..??

should be positive, shares drifting in the summer breeze..

could be a good time to buy..??

[cambium] 05/7/2011 19:21

So very illiquid though guys. Little volume on good days.

[jakleeds] 05/7/2011 18:01

Yes GHF, it's a waiting game with this one, not long for the ts now.

[glasshalfull] 05/7/2011 17:28

I love bored sellers. Had a few jackleeds ;-)
You still invested?

Regards,
GHF

[jakleeds] 20/6/2011 15:42

Blimey what's going on here then? Bored sellers?

We need a statement sooner rather than later methinks.

[jakleeds] 16/5/2011 07:15

2 decent bits of news today and last friday.

[masurenguy] 28/3/2011 08:45

Very quiet here. No discourse on the prospects and no increase in the share price either since the year end results were issued almost 3 weeks ago !

[jakleeds] 10/3/2011 10:00

LONDON (ShareCast) - STM, the cross-border financial services firm, more than doubled profits in 2010, in line with expectations, and "two little fireworks" could make 2011 a winning year.

The company, which helps individuals and businesses with tax, legal, trust and pensions needs, made £1.5m before tax and after exchange gains, up from £0.6m in 2009.

A 43% surge at the core corporate and trustee services (CTS) business to £7.6m pushed overall revenue to £10.5m, up 24% on the year before. That's despite down-time for integration and new, upgraded back office software platform installation.

Zenith, bought in April 2010 for £5.1m, has provided the much needed platform for Jersey. Revenue was £2.2m last year and analysts expect a full-year contribution for 2011, perhaps as much as £0.3m, to lift group profit to between £1.8m and £2m.

Talking to ShareCast earlier, chief executive Colin Porter and finance boss Alan Kentish predicted "robust" organic growth this year, but were "incredibly excited" by prospects for their overseas pensions product aimed at ex-pats, one of the two "little fireworks".

About £1.5bn has been transferred out of the UK already, but the target market for qualifying recognised overseas investment schemes (QROPS) is almost £600bn, and there are few competitors, says STM.

"Every 100 pensions we export is worth about £0.5m to us," said Porter. "So, it doesn't take much to change the profile of our revenue streams and profitability. Achieving 360 QROPS in a year could alter the profile quite dramatically."

Life bonds for offshore and overseas taxpayers, a product embraced by huge swathes of Europe, is firework number two. It will also be a focus for the current financial year.

"Although only very early days, the growth potential in these two areas is significant for a business the size of STM," reckon analysts at finnCap.

Things haven't gone quite as well in Switzerland though. It lost less in the second half than the first, but its days could be numbered. It has 3-6 months to start showing progress, ShareCast is told.

"Current trading and outlook benefits from robust underlying revenue base, with billable fees providing pleasing revenue visibility for early part of 2011," STM said.

"The board views 2011 as a year in which to continue to consolidate the initiatives of previous years in order to deliver enhanced profitable growth. Acquisition activity is likely to be limited in 2011."

The Malta overseas pensions product (QROPS) has been approved by UK authorities and the pipeline and interest for this product is "growing significantly". STM wants to double turnover to around £0.6m.

"With the company back on delivery mode, we expect the shares will perform and we are raising our recommendation from Add to Buy," says broker Evolution.

A final dividend of 0.4p a share takes the total payout for the year to 0.6p.

[jakleeds] 09/3/2011 10:11

Looking good, should be seeing new recent highs here soon enough.

[nellie1973] 08/3/2011 13:40

broker upgrade

[masurenguy] 08/3/2011 07:55

Looking better with some tangible progress, especially compared to the prior two years, but profits are still 25% below 2007 results on half the revenue base and over 50% lower than 2008 results on 12% lower revenues. Just one of the issues that relates to operating a Buy-and-Build business model. Some other points, relating to accruals, debtors, cash and outstanding loans, to take into consideration too.

a)"the Group had accrued income, in the form of work performed for clients but not yet billed at the balance sheet date, of GBP3.1 million (up from GBP2.3 million at 31 December 2009). The increase in accrued income is in part due to the build up of pension's work that is awaiting HMRC approval and the Zenith acquisition accrued income."

b)"Trade receivables as at the 31 December 2010 amounted to GBP4.0 million, up from GBP3.3 million at 31 December 2009, this is primarily as a result of the new Zenith trade debtors. There continues to be significant effort put in to accelerate cash collection, with a full time credit control function being implemented during 2010. Whilst bad debts are generally low as a result of the entities under management having assets within their structures, it remains a frustration that debtor days remain higher than targeted."

c)"The Group ended the year with cash of GBP3.7 million........At 31 December 2010, the Group had bank borrowings of GBP2.6 million (2009: GBP1.29 million), being loans from RBS International Limited ("RBSI") to provide part of the solvency capital required for STM Life, as well as funding the first payment of the Zenith acquisition. The term of the original loan for STM Life is for five years from March 2008. Two further loans were taken out in 2010, one for GBP0.4 million and one for GBP1.5 million; both are repayable over a three year term but being amortised over five years. The loan for STM Life is secured on a blocked cash deposit of GBP2.45 million. In March 2010, the Group raised a further GBP2.2 million in connection with the Zenith acquisition through the issue of a convertible loan note instrument ("CLN"). The loan from shareholders as at 31 December 2009 of GBP1.3 million which has existed since the Group's listing in March 2007 was also rolled up into the CLN. 50% of the CLN may be converted into new ordinary shares in STM at the holders' discretion at a price of 33 pence per share in March 2012. The remainder of the CLN is repayable in March 2014."

[jakleeds] 08/3/2011 07:27

Great results, well done STM.

With 2010 revenues exceeding GBP10.5 million (2009: GBP8.5 million), it is pleasing to note that the business is starting to deliver improved profit margins, although there is still scope to enhance these further. The profit before tax but after exchange gains for 2010 doubled to GBP1.5 million from GBP0.7 million in 2009, and was helped by the cost efficiency drive that had been implemented in late 2009 and early 2010.

A significant milestone in the development of STM's business model was the acquisition of Zenith Trust Company Limited ("Zenith"), which gave the Group's Jersey operation the critical mass that it was previously lacking. The STM Jersey business, with some 35 staff and an annualised turnover of almost GBP4.0 million, is now a well managed and significant contributor to the Group's profitability.

The deliberately low-key opening of STM's Malta office in the last quarter of 2010 is also worth highlighting. The products that the Group can now offer through STM Malta are important differentiators for STM and I am pleased to be able to report strong early demand, which has meant that this business unit has been profitable from day one of receiving its licence.

[jakleeds] 03/3/2011 18:57

Results next tuesday. They've already confirmed H2 trading has been strong. To be honest I can't understand why they said they would issue another trading statement in Jan having just issued one in Dec.

Obviously the fact that they haven't then issued a statement makes people rather wary, but I think (hope!) results will be strong and the outlook will be good. They've started paying a divi as well which is always a good sign. The makings of a great growth stock imo.

[jakleeds] 03/3/2011 18:54

Here's more from their prelims last year:

In line with all CTSP businesses, the Group had
accrued income, in the form of work performed for clients but not yet billed at 30 June 2010 of GBP2.86 million (30 June 2009: GBP2.01 million). There is also deferred income, annual fees invoiced, but not yet earned at the same date of GBP1.12 million (30 June 2009: GBP0.88 million). It is expected that these amounts will be invoiced or earned in the second half of 2010, providing
excellent visibility over revenues.

There was good cash collection across the Group in the first half and the
Group's balance sheet remains strong. The Group had a gross cash balance of
GBP4.94 million at the period end (30 June 2009: GBP3.91 million). During the
period, we repaid external borrowings by GBP0.28 million.

[masurenguy] 27/2/2011 14:42

I've been researching this outfit recently and I like the look of their business model and the FS sector that they have targeted, which should be a good growth area. Their interims showed real progress and their December trading update was positive too. Thefore why have they subsequently undermined their own credibility by not following through with the further TU they referred to in December !

"A further trading update is expected to be made in January 2011 ahead of the Group reporting its preliminary results in early March 2011."

Management credibility is a key factor in an FS company, especially one whose operations are all offshore, and consistency and transparency are very important in this context. An own goal by management in my opinion ! If there was some reason not to issue a January TU, as previously announced, then they should have provided some explanation. Allowing January to pass with no TU or comment only raises concerns that something unexpected might have come out of the woodwork, which could be revealed alongside the results on March 8th. Companies that adopt a Buy-and-Build strategy are always potentially vulnerable to something unexpected emerging out of the woodwork from an acquisition, however good their due diligence may have been.

"jakleeds - 23 They are sitting on a cash pile of about 5 mill, forecast 2010 profit is £1.3mill, so strip out the cash and that by my reckoning puts them on a pe of under 6."

This is gross cash not net cash and does not take into account outstanding RBS bankloans of £1.29m, shareholder loans of £1.36m, the £1m portion of the outstanding bond due to be repaid in 2014 or outstanding deferred consideration liabilities of £3.46m relating to the Zenith acquisition which will have to be paid over the next 12 months. If post tax profits come in at around £1.5m then the current year PER would be around 7.4.

Interim Results 15th Sept 2010: During the period, we repaid external borrowings by £0.28 million. The majority of this borrowing was taken out in 2008 to provide the solvency capital for STM Life and to date we have repaid £0.94 million. Following the acquisition of Zenith in Jersey, deferred consideration has increased from £0.30 million at 30 June 2009 to £3.46 million at the period end. The majority of the consideration will be paid during the remainder of 2010 and into 2011 from a mix of existing bank facilities and operating cashflow.

I would be interested in other posters views on current year profit projections and the company's failure to issue the January trading update, but in the meantime I will continue to sit on the sidelines here.

[jakleeds] 02/2/2011 16:41

Where's the trading update then?

"A further trading update is expected to be made in January 2011 ahead of the Group reporting its preliminary results in early March 2011"

They are sitting on a cash pile of about 5 mill, forecast 2010 profit is £1.3mill, so strip out the cash and that by my reckoning puts them on a pe of under 6.

Should be some interest in the run up to the results, due in early March

[nephie] 18/1/2011 10:57

Cheers I didn't have a current list of holders sorry

[jakleeds] 18/1/2011 10:54

Looks to me as though they've sold their entire holding nephie. I suspect (hope) that we'll see a pullback before any further rises.

[nephie] 18/1/2011 10:01

I presume landsbanki have bought 2.6 million shares, although these rns' are so vague and ambiguous. I bow to Anyones superior knowledge,

All bodes well for the future

[cambium] 17/1/2011 15:20

what would of happened on a good day

[cambium] 17/1/2011 08:59

still rising

[jakleeds] 15/1/2011 11:04

So with another trading update due and the price beginning to take off, could be an interesting few weeks ahead...