STM Group today reported modest growth "on the back of an unprecedent year in terms of the global pandemic" with revenues of £24m (2019: £23.3m) in the year to 31 December 2020 and profit before other items of £3.6m (2019: £3.5m).

It highlighted how its pension administration businesses continued to be "the life-blood of our group, and the corner stone to our profitability", while it also gave an estimate on potential claims following the appeal decision in the high profile Carey v Adams case. 

Administration of its ROPS products, carried out in Malta and Gibraltar and split 75% and 25% respectively, continued to be its largest revenue generator accounting for £10.1m (2019: £10.1m).

"As has been known for a number of years, this product is no longer a growth factor as a result of changes in the UK pension legislation in 2017. Whilst we continue to receive a small number of new members from EEA countries (203 in 2020 compared to 225 in 2019) the attrition rate is increasing as we see our member profile age and take advantage of flexi access benefits in Malta. The attrition rate in 2020 was 6% (2019: 5%)."

The Options acquisition made in 2019 had shown significant revenue growth in 2020 and the integration savings expected from the SIPP business were now starting to come through, it said.

The SIPP businesses, both Options Personal Pensions and London & Colonial Services contributed total revenues of £3.5m (2019: £2.7m).

In addition, the Berkeley Burke acquisition in 2020 generated both revenue and profit contributions in the five-month period since acquisition.

"Whilst new business levels were slower to come through than we originally expected as a result of the global pandemic impact they were still higher volumes than in prior year within the SIPP and auto enrolment businesses", it said.

A total of 585 SIPPS were signed up in 2020 compared to 452 in 2019. In addition, the auto-enrolment business saw 40,000 new members since acquisition to 31 December 2019 as compared to 72,000 new members in 2020.

Total revenue across its pensions businesses was £16.5m (2019: £14.1m) and accounted for 69% of total group revenue (2019: 61%). In addition, recurring revenues for the pension businesses remain high at 93% (2019: 90%).

STM further gave an estimate of £3.6m for the potential outcome of claims made by SIPP members following the Carey Pensions Court of Appeal judgment on 1 April which it said was covered by professional indemnity insurance.

Alan Kentish, STM Group's chief executive, said: "The recent Judgment in the Carey v Adams case will have implications across the whole of the Financial Services industry who have dealings on an execution only basis. This was a historical claim and the Options management team will continue to drive the business forward as they have done since being part of the STM team."

As for the overall results, Kentish said: "Whilst the year has had challenges, we have achieved a great deal in progressing our three year transformation and growth strategy. We see 2021 being a year where a number of strategic initiatives come to fruition that will build on efficiencies within the business.

There is an energy and focus for the remainder of 2021 in building some key partnerships that will help drive new business volumes. Additionally, our acquisition pipeline is active and expected to be a pillar of our future growth."

He added: "STM is an increasingly streamlined and more focused business. The Board is optimistic for its future and looks forward to updating on progress in 2021."