From Shares Magazine
There are plenty of pension administrators on the market but STM (STM) caters primarily for ex-pat clients. As a result, the company is having to make changes to secure new business after being put through the ringer by HMRC.
The company used to specialise in providing Qualifying Recognised Overseas Pension Schemes (QROPS). In this year’s Spring Budget, a 25% tax was introduced for anyone living in a country which is not the same as the one from which your pension is administrated.
STM found it very hard to win new QROPS business due to the tax change.
Going forward, the company is pinning its hopes on the International SIPP, its replacement for QROPS to secure new business.
The reason why STM could remain the ‘go to’ firm for ex-pats is that the company has built up a large international distribution network to serve its clients. This includes IFAs in the 106 countries that STM customers are based.
STM trades on 11 times forecast 2017 earnings per share figure of 5.3p using house broker’s FinnCap’s figures. It also has a prospective 3% dividend yield for 2017 as well.
The international SIPP business is yet to come online in the US, where STM had 30% of its new business in. The company is also waiting for HMRC approval of its Australian pension product. Once these two goals have been achieved, the company may have some serious growth potential.