Shares in STM Group are up almost 3% after it posted a slight rise in full-year pre-tax profit, despite it warning the Government's proposed new QROPS policy has led the company to lower its 2017 revenue expectations by about £1.1m.
Revenue for 2016 was up 8% to £17.4m, from £16.2m. This led to a pre-tax profit of £2.8m, from £2.7m. Recommended total dividend was 1.5p a share.
Chief executive Alan Kentish described the results as solid, but added the government's Spring Budget had "thrown a curve ball into our expectations for new QROPS (qualifying recognised overseas pension schemes) business".
"However, our business model is based on a robust recurring revenue stream and thus, whilst profits for 2017 will have been impacted, we still expect a growth in profit compared to 2016."
Chancellor Philip Hammond announced QROPS transfers for certain individuals not in the European Economic Area, New Zealand and Australia would be hit with a 25% tax charge.
"This change is likely to have an impact on STM's ability to significantly grow the number of QROPS policies it administers," said Kentish in a statement. He doubted there would be an impact on STM's existing QROPS business.
"Whilst it is very early days to fully understand the exact impact, it would appear that some 20% of anticipated new QROPS business will be unaffected.
"The other 80% of anticipated new business, which is generated outside of the EEA, may be at risk. However, we believe that some of this potential loss of QROPS business will manifest itself into new UK SIPP applications, as a result of the proposed legislation."
"We have however taken a prudent approach to revising our expectations for the growth in group revenue from 2016 to 2017," said Kentish.
STM had assumed that -- on a worst case scenario -- the potential reduction in new QROPS applications would result in our group revenue expectation for 2017 being reduced by some £1.1m compared to previous expectations.
"This worst case scenario still represents double digit revenue growth from 2016 to 2017 and does not yet reflect changes in the Group's cost base which management will focus on, where appropriate, to ensure that margins can be maintained."
At 10:46 GMT, shares
in AIM-listed STM were up 2.78% to 37p each.