STM Group raked in £2.7m in profits from its acquisition of Carey Pensions earlier this year in what it classed as a bargain purchase.

A company statement, released today, revealed that STM had paid less than the market rate for SIPPs firm Carey Pensions and got it for a knockdown price in February.

The profits were achieved by writing off negative goodwill associated with the company.

It means the buy resulted in a “bargain purchase gain” as defined by accounting standards.

STM says the bargain purchase gain amounted to £2.7m, which will be immediately recognised in the company's profit and loss account.

Alan Kentish, CEO of STM Group, said: “It is always pleasing to announce a bargain purchase, but more importantly the Carey acquisition has opened the door to product offerings and market sectors that were previously inaccessible to us. 

“The bargain purchase gain does however generate a benefit in the first half of the year which is not reflected in the second half or in future comparative periods.
 
“The UK workplace pensions sector in particular is seeing significant change, and with the number of Master Trusts reducing as a result of the authorisation process, I see our UK corporate pension business becoming more valuable, and benefiting from a differentiated revenue stream that most of our SIPP competitors do not have.”
 
He added: “We have stated that we are keen to acquire portfolios of QROPs, SIPPs and SSASs, as well as auto-enrollment Master Trusts. 

“The additional investment in infrastructure and resources under the new Target Operating Model will allow us to acquire, and integrate quickly and efficiently, without impinging on our ability to run the business day to day.

“All of the above makes for an exciting 12 to 18 months ahead where we expect to see solid revenue and profit growth.”