Share Search
Visit the Share Search
STM warns on profits as new business applications miss targets
27th Nov 2019 09:34
(Sharecast News) - Financial services provider STM issued a profit warning on Wednesday after revealing new business applications within its pensions unit had come in lower than expected.
STM said while new business applications had increased during the second half of the year, the increase was not expected to make up for the lower rate seen earlier in the year.
As a result, STM now expects full-year revenues to be approximately £23.0m, while reported pre-tax profits were projected to come in at roughly £3.8m and underlying pre-tax profits were expected to come in at around £2.5m.
STM also said its outlook for 2020 would be impacted by the slower new product revenues and ongoing costs detailed.
However, the AIM-listed group assured investors that its strategy, and the benefits that are anticipated to flow from the investments made in 2019 and 2020, would ensure STM was "well placed for the future".
Chief executive Alan Kentish said: "The last six months have been incredibly frustrating, the headwinds on completing certain initiatives such as the Carey rebranding and our flexible annuity rollout have slowed down our new business pipeline.
"Whilst it is disappointing to start on a rebased 2020 PBT, I feel confident that we have the right tools in place and growth opportunities available to us to deliver enhanced underlying profitability."
As of 0930 GMT, STM shares had tumbled 24.02% to 32.90p.
STM said while new business applications had increased during the second half of the year, the increase was not expected to make up for the lower rate seen earlier in the year.
As a result, STM now expects full-year revenues to be approximately £23.0m, while reported pre-tax profits were projected to come in at roughly £3.8m and underlying pre-tax profits were expected to come in at around £2.5m.
STM also said its outlook for 2020 would be impacted by the slower new product revenues and ongoing costs detailed.
However, the AIM-listed group assured investors that its strategy, and the benefits that are anticipated to flow from the investments made in 2019 and 2020, would ensure STM was "well placed for the future".
Chief executive Alan Kentish said: "The last six months have been incredibly frustrating, the headwinds on completing certain initiatives such as the Carey rebranding and our flexible annuity rollout have slowed down our new business pipeline.
"Whilst it is disappointing to start on a rebased 2020 PBT, I feel confident that we have the right tools in place and growth opportunities available to us to deliver enhanced underlying profitability."
As of 0930 GMT, STM shares had tumbled 24.02% to 32.90p.