(Adds details from statement, share move)
Nov 27 (Reuters) - Financial services provider STM Group said on Wednesday it expects its 2019 underlying earnings to fall by a third on weak performance in its pensions business, sending its shares plunging 30%.
The company, listed on London’s junior stock market, forecast an annual underlying pretax profit of 2.5 million pounds ($3.21 million), compared with 3.7 million pounds reported last year.
The slowdown in business applications within its pensions segment was partly due to some uncertainties and concerns in the general UK pension sector, STM said.
The company, which operates in the UK, Gibraltar, Jersey, Malta and Spain, provides international pensions, life assurance solutions, and trust and company management services.
Earlier this year, Reuters reported citing industry sources that differences over how to regulate Britain’s new pension superfunds, which are designed to deal with pension deficits, have delayed the first deals in the industry until next year.
The drop in pension funding appears as people live longer and as years of central bank stimulus measures have pressured interest rates, leading to gaps between the fixed sums the pension schemes pay out and their investment income.
STM, which offers independent fiduciary services and asset structuring to high-net-worth individuals and corporate institutions, said its outlook for 2020 will also be affected by slower new product revenue and additional ongoing costs.
It added that the pipeline of new business after the relaunch of the UK flexible annuity in June this year was materialising slower than originally expected.
“The last six months have been incredibly frustrating,” STM Chief Executive Officer Alan Kentish said.
As of 0808 GMT, shares were down 29.6% at 30.50 pence, their lowest in four-and-a-half years.
$1 = 0.7794 pounds Reporting by Muvija M in Bengaluru, Editing by Sherry Jacob-Phillips