STM Group Q4 new business wins impacted by Covid-19
Financial services provider STM Group warned on Wednesday that new business wins for the remainder of the year would likely fall short of prior expectations as Covid-19 continued to cause delays.
STM said traditionally, the last quarter of the year had seen "solid new business growth", something it expected to see in its workplace pensions and flexible annuity product units in 2020.
However, the AIM-listed group said it was now seeing that certain initiatives were not yet delivering the volumes of business that it had expected, leading it to take "a more conservative stance" on new business numbers for the remainder the year.
STM did note that a number of specific initiatives and opportunities did remain in play for 2020 and into 2021, which it stated had the ability to claw back some of the 2020 new business shortfalls, but cautioned that there was not "sufficient certainty" on their delivery to include them within its new 2020 business expectations.
As a result of the delays and deferments, STM anticipates that fourth-quarter new business revenues will take a hit of approximately £150,000 and directly impact pre-tax profits for the full-year.
Chief executive Alan Kentish said: "Covid-19 has certainly created a more difficult backdrop in which to do business, and whilst we have looked after our existing clients admirably, it is apparent that our new business expectations for 2020 will not be met.
"We believe that much of the new business shortfall is a timing issue and thus expect it to come through in 2021, supporting our confidence in expected material growth in profit before tax for 2021."
As of 1000 BST, STM shares had tumbled 20.29% to 27.50p.