INVESTOR RELATIONS

STM Group Plc (AIM:STM), the cross-border financial services provider, is pleased to announce the acquisition of two inter-related businesses in the UK and international pensions sectors (the "Acquisition").

STM Group Plc has acquired 100% of the share capital of Berkeley Burke (Financial Services) Ltd and Berkeley Burke Employee Benefit Consultants Ltd from Berkeley Burke Group Limited, which together provide administration and consultancy services to Small Self-administered Pension schemes in the UK and to large and medium sized UK and international businesses, delivering pension solutions for their UK and overseas employees. Both businesses have been in existence for decades and come with a good quality portfolio of clients. These businesses are independent of the Berkeley Burke SIPP business, which has previously been sold to another party.

The Acquisition, which is not subject to regulatory approval, will be for a maximum consideration of £2.9 million on a debt free/cash free basis, comprised of £1.4 million initial consideration and a further £1.5 million of contingent deferred consideration based on revenue hurdles that apply to existing business and opportunities in the pipeline. Up to £1 million contingent consideration is payable at the first anniversary and a maximum of £0.5 million at the second anniversary of the date of acquisition.

Each business has normalised annual recurring revenue of approximately £1 million and comes with a competent and qualified staff resource.  The SSAS business will allow for efficiency gains when it is integrated into our existing UK operations, and the UK and international group pension plan business will strengthen our position in that sector, fully supporting and endorsing our international pension offerings from Malta and Gibraltar. Given the initial acquisition costs and phased integration plan, the Acquisition is anticipated to breakeven in the first twelve months, however is expected to make a profit contribution of approximately £0.6 million annually thereafter. Aggregated accounts for the year to 30 June 2020 show revenue of £1.9 million, profit before tax of £0.1m and net assets at that date of £0.2m, for the combined businesses.

The consideration will be funded out of existing cash resources and a new credit facility. The Company has received Credit Committee Approval from Royal Bank of Scotland International Limited for a new £5.5m credit facility to be used purely for acquisitions, details of which will be provided following completion of documentation.

Alan Kentish, CEO of STM Group, commented:

"We are really pleased to get this acquisition under our belt; it has been a long time coming but we needed to find the right acquisition for us. The SSAS and GPP businesses fit nicely within our existing operations and complement some of our imminent expansion plans in the international pension space. I am delighted to welcome Grahame Berkeley, who will act as a consultant to the business for the foreseeable future, and his dedicated staff to the STM family. In addition, finalization of the new bank facility will allow us to further continue to pursue our acquisition strategy for other opportunities."

Grahame Berkeley, Chairman and majority owner of the Berkeley Burke businesses, added:

"I am delighted that the businesses I have built up over the last 47 years are becoming part of the STM Group. I have watched STM's expansion over the last few years and their relatively recent entry into the UK market. I have no doubt that I and my loyal and very able staff will be able to add significant value to STM. I am particularly excited by the opportunity to help STM move their international businesses forward."

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

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Notes to editors:

STM is a multi-jurisdictional financial services group which is listed on the AIM Market of the London Stock Exchange. The Group specialises in the administration of client assets in relation to retirement, estate and succession planning and wealth structuring.

Today, the Group has operations in the UK, Gibraltar, Malta, Jersey and Spain.  STM has developed a range of pension products for UK nationals and internationally domiciled clients and has two Gibraltar Life Assurance Companies which provide life insurance bonds - wrappers in which a variety of investments, including investment funds, can be held.

STM's growth strategy is focussed on both organic initiatives and strategic acquisitions.

Further information on STM Group can be found at www.stmgroupplc.com