StockMarketWire.com - STM Group, the cross border financial services provider, updated the market on its Carey acquisition and operational progress.

Following the acquisition of the Carey Group in February 2019, the board and its professional advisors have determined that this acquisition has resulted in a bargain purchase gain as defined by accounting standards.

This is in effect negative goodwill as a result of the consideration paid plus the amount of the non-controlling interest being lower than the fair value of the net assets acquired, which comprise mainly the SIPP and the Corporate Pension client portfolios.

The value of the bargain purchase gain has been calculated at £2.7m and is recognised immediately in the profit and loss account.

The company says the Carey integration is progressing well, with a focus of Milton Keynes becoming STM's main UK hub and to move Carey's SIPP business onto STM's own proprietary administration platform. T

he UK workplace pensions market remains in a state of flux as Master Trusts consider whether to progress with The Pensions Regulator authorisation process, and this has benefitted Carey Corporate through increased new business.

Carey Corporate is expected to remain loss making for 2019 at £0.6m, but with an anticipated break-even from early 2020. In addition, short term one-off integration costs of £0.5m for the SIPP business will be absorbed during 2019, but timings will mean that the full integration benefits, expected to amount to annualised cost savings of £0.7m, will not be fully realised until 2020.

Alan Kentish, CEO of STM Group, commented: '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.'




Story provided by StockMarketWire.com