Profits have fallen for SIPP and pensions firm STM Group although increasing pensions admin provided a modest increase in underlying revenue for the first half.

Underlying revenues for the first half of 2020 were £11.8m (2019: £11.6m), according to the group’s 2020 first half year results.

Underlying profits fell by 17% to £1.9m for the same period (2019: £2.3m).

The group said that its Carey Pensions acquisition is now fully integrated, and the UK rebranding of the SIPPs business to Options has been launched.

STM acquired the troubled SIPP firm last year for £400,000 and quickly raked in £2.7m in profits from the deal resulting in a “bargain purchase gain” by accounting standards.

In the first half of the year STM also launched a Shariah SIPP and workplace pensions solutions. It said the workplace pensions corporate business is moving towards break-even.

In its half year results the group said it continues to look for more acquisition opportunities.

STM made a £2.9m deal in August with the purchase of Berkeley Burke (Financial Services) and Berkeley Burke Employee Benefit Consultants, which provide administration and consultancy services to SSAS and international businesses. The acquired businesses will be integrated into Options. 

Alan Kentish, chief executive at STM, said: “Covid-19 has presented challenges however the business has responded admirably and, as anticipated, the quality of our recurring revenue stream has under-pinned our half year results. The challenge and opportunity for us over the next 12 months is to accelerate the conversion to revenue of our healthy new business pipeline, particularly in relation to our flexible annuity product.

“Within the business, as part of our new operating model and drive for improved margins, I am pleased to confirm that our key IT projects remain on track with regards to scheduled completion, which we expect to lead to a step change in profitability in 2021.

“The recent acquisition of the Berkeley Burke SSAS and GPP companies are a welcome addition to the UK business portfolio, and demonstrates our commitment to further building our UK operations and delivering on our growth potential. In addition, we continue to pursue acquisition opportunities where we are in active discussions.”