Stm Share Discussion Threads

[smithie6] 20/5/2021 16:32

I liked the presentation.

btw it has been recorded, & the slides & the Q&A at the end, so anyone still doing a 9 to 5 can listen to it this evening.

it will be interesting to see if any increase to expected profit for 2021 is made in any broker analysis (which I think means just Finncap) & the answer to that is probably no.

although it was confirmed, as expected, that Carey is now moving in to profit as expected & the savings from using more in-house software are starting to happen, also as expected, so these things should already be in any analyst's prediction.

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I was interested to hear that one of the software developments produces a saving by not paying license fees for the industry std. software. (I hadn't realised that).

The MD said that 2 software developments are now in use & the 3rd one (the final main sw project I think) is going live this month or at the start of next month. That's good.

I was surprised that the co. is using external consultants to advise on how to reduce the regulatory capital. I thought the co. had been operating for years & hence knew the reqts inside out, so I'm surprised they need to pay for someone outside the co. to help them !
(they are looking at phps putting 2 'life' cos. in Gib. together. I think someone posted about that in recent days)

Also surprised that the MD spends >= 50% of his time in Gibraltar. imo all the acquisitions & integration & cost reduction work & relocation to Milton Keynes is in the UK !!
& surely he should be directing all of that.

(& I assume software development, the MDs specialist area, he was previously the tech./IT dir. of STM) & not in Gibraltar. & the job of the new FD is advertised as UK based. (so time spent in Gib., is it just because that is where the MD has lived for 20-25 years & his friends & family & life is there, rather than it phps being what STM really needs ?)

is the UK part wandering without leadership ? (phps under the leadership of the seller of the Carey business ??)

the MD & FD came over well. both seemed to be educated intelligent capable people, as you would expect/hope

(but which is not fulfilled at many listed companies !; at STX for example the MD doesn't present well (& the same was true for the previous MD of Bluestar, who appeared a bit bored & tired in financial studio interviews !, ok he was !, je je)

the MD chatted a little about co. valuation in the Q&A, & feels that the share price is undervalued, especially based on the EV (after subtracting the nett cash from the cap. value) & in X years time he expects/hopes it will be higher

future divi security was discussed & the MD said that some insti shareholders are income funds, that would not be happy if the divi was cut to put the money in to acquisitions, so, unlucky to be cut except for any shocks

......a lot more was discussed/presented but I don't think there was much that a close follower of STM didn't already know.

[elsa7878] 20/5/2021 16:05

Don't know how anyone that listened to that presentation could fail to be anything but impressed.
As I have said Alan is a very approachable and came across well, with a clear roadmap for the future.
2/3 year hold and ignore the short term noise.

[smithie6] 20/5/2021 14:47

I can do that.

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any requests for questions just post & I will try to send in, if I think any question is a good one

[lundun42] 20/5/2021 14:25

Hopefully someone on here is logging on to the update and can share some feedback on here later. I can't sign up for it as I've got to go back to work in 5 mins :(

[smithie6] 20/5/2021 13:37

3pm kick off ?

[smithie6] 20/5/2021 10:31

"IIRC STM said a year or two ago that they were planning to move the STM Life company to Malta but that has not happened"

good info digging

!!

seems surprising but I guess there must have been decent reasons for not doing it.

lots of changes going on this year & in recent years. Those of us still holding believe that the bod & managers have a lot of experience & numerous different subsidiaries & in different countries (with different rules) & that a suitable way forward will be found/achieved.

(& the directors & ex dirs have a lot of skin in the game so they will be doing their best imo).

[lundun42] 19/5/2021 23:43

Smithie6 - It says in the report "No new or incremental business can be accepted from the EU from 1 January 2021 until any new permissions are granted or equivalence is agreed. STM Life will continue administering its inforce EU policies to their natural conclusion (e.g. surrender, transfer out or policy maturity)."
IIRC STM said a year or two ago that they were planning to move the STM Life company to Malta but that has not happened and they now seem to be intending to merge their two life companies in Gibraltar. I took the note to mean that they can't do new EU life assurance business so I can't see how anything can continue to come from Malta for the life company. Yes they have their large pensions business in Malta which should carry on unaffected by Brexit but surely the Gibraltar based insurance companies can't now take life business from Malta (or anywhere else in the EU)as they no longer have permissions to do so since Brexit happened. Also by mentioning "incremental business" the report seems to make clear that existing EU customers aren't allowed put more money into their policies either. Not good unless the equivalence thing soon gets sorted I suppose.

[smithie6] 19/5/2021 23:42

is the trusts section not all now sold with the 2 sales in 2021 ?

(since viewed as non-growth)

[elsa7878] 19/5/2021 22:43

I thuoght they had sold off their insurance business some time ago. Do you mean assurance?
The business is basically pensions (14m) life assurance (5m) and trusts (4m)...roughly.

[smithie6] 19/5/2021 22:37

interesting
& thanks for sharing

1) "no new EU business can be accepted"

from Malta are they not free to operate within all of Europe ??

2) loss of turnover & profit from the 2 cos. sold

I was aware of that, easy to see, & I have assumed that the dirs would not have done it unless they (with the agreement of the indep. dirs on the bod) felt that the overall result would not be beneficial
so, I'm assuming that a compensating acquisition(s) will result. While noting that some money is not received until X months in the future (a purchase could make stage payments at the same time).

A reasonable % divi is being paid out, so clearly the dirs don't feel that they need that cash to fund acquisitions.

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tomorrow the "prospects" part should/will inform us about this.

[lundun42] 19/5/2021 13:59

I don't know if anyone read the solvency reports published last month by the two STM insurance companies. They do add some useful info which wasn't mentioned in the results announcement this week. It looks like STM is moving ahead with merging their two life insurance companies (maybe so capital can be released?) and also creating a service company to administer the policies (reduces future expenses risks). They mention that Brexit has had a material impact on the business since loss of passporting rights in January this year no new EU business can be accepted until (if ever?) equivalence for UK firms is agreed. This is a big blow as it looks from the report that at least 75% of 2020's £30m total premiums came from EU countries. These reports can be found on the insurance companies websites for anyone interested.

It will be good to hear more from the directors on future plans/outlook as whilst the recent disposals create a more pensions focused business, where is the growth going to come from to replace/exceed the lost income and profits of those subsidiaries just sold, the lost new EU business in the life insurance part and, if I read it correctly, no more growth in the large Malta pensions business implies a business running off as the ageing customer base retires/passes away? It would be nice to think that STM can achieve good growth from their focus on UK activities but they don't appear to have any critical mass in the SIPP market at least. Maybe the workplace pensions will take off big time for them or maybe some significant acquisitions will soon be announced to get the market more interested. Here's hoping!

[smithie6] 19/5/2021 10:25

is the tide phps changing ?

the share price seems to have solidly left behind the 20-30p range

& has risen above the trading range of 29-31p where it traded for many months

[smithie6] 18/5/2021 10:42

my views are similar

although this year was supposed to be a much better year for profit & at the moment that expectation seems to have been damped :-(
although we should hopefully get some up to date info, or at least some vibes, from the directors' presentation on Thursday

I also like the good downside support

[elsa7878] 17/5/2021 21:55

The industry is in a state of flux as they await several court cases (appeals etc) which will provide clarity going forward. Also covid has hit new business not surprisingly.
Decent company and doing their best.
I have a lot of stock and happy to hold.
Downside is minimal due to the huge cash balances.
I'm hoping for 50p plus in 2/3 years.

[smithie6] 17/5/2021 18:34

elsa

you seem to know the co. quite well & you have talked to the MD in the past

you see these as a buy or sell or hold at the moment ?

any target price ?

[smithie6] 17/5/2021 07:17

RNS issued today

web presentation this Thursday 20th May to review results , sale of 2 businesses & prospects.

"Investor Presentation



STM Group Plc (AIM: STM), the cross-border financial services provider, announces that the Chief Executive, Alan Kentish, and the Chief Financial Officer, Therese Neish, will be hosting a remote presentation to review the 2020 results, the sale of the Gibraltar and Jersey businesses, and prospects at 15:00 on Thursday 20 May.



The presentation will be hosted through the digital platform Investor Meet Company. Investors can sign up to Investor Meet Company and add to meet STM Group Plc via the following link

hxxps://www.investormeetcompany.com/stm-group-plc/register-investor" .

cut

[smithie6] 16/5/2021 23:28

good info. interesting.

Interesting that 1 side was keen to sell days before results while the other side was keen to buy days before the results.

[elsa7878] 16/5/2021 22:56

Took place on the 5th - see the trades.

[smithie6] 16/5/2021 22:49

you think that PG bought those shares as a block on the day of the results ?

[elsa7878] 16/5/2021 22:27

Kestrel said on May 4th they had 1,602.011 shares which was below the notifiable interest level.

Peter G said on May 12th he had 1.832.011

Guess where he got most of his holding from........come on I'll give you 3 guesses...

[smithie6] 14/5/2021 09:58

I can't recall who own most of the co.

Miton used to be the biggest holder a few years ago, but perhaps not now.
Dirs & ex dirs & related parties hold a fair %.

If an offer came in at say +50% then who knows who would vote yes & who would vote no.

But if the co. can, this year, get the new IT systems to provide the hoped for cost savings & hence to make it more profitable to acquire small operators operating at breakeven perhaps we will see the underlying profit increase & for the share price to follow suit; & for a rosier medium term future. If so, there would be more no votes to any takeover offer.

[lundun42] 14/5/2021 09:33

So unless any of the >3% holders are prepared to sell, there's not much prospect of a t/o bid emerging anytime soon to give the share price a much needed boost.

[smithie6] 13/5/2021 17:56

River & Mercantil sold some shares leading up to Oct '20 RNS.
0.6% of the co. sold by them up to that RNS & phps ~1% (0.99%) subsequently sold without needing any new RNS

If PG mopped up these different stakes & some in the mkt he was able to get ~3%.

(getting 1-3% is normally always possible in any small cap. as long as you do it slowly without pushing up the price, which often just attracts buyers !))

[smithie6] 13/5/2021 17:50

Kestrel recently transferred out ~1% of the co.

not clear to me if sold or transferred these shares into clients' direct accounts