REG - PensionBee Group plc - Q1 2024 Trading Update

PensionbeeAnnouncement

24/04/2024 16:30

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RNS Number : 9124L  PensionBee Group plc  24 April 2024

 PensionBee Group plc
 Incorporated in England and Wales
 Registration Number: 13172844
 LEI: 2138008663P5FHPGZV74
 ISIN: GB00BNDRLN84

 

 

 24 April 2024

 

 PensionBee Group plc
 Q1 2024 Trading Update

 Successful strategy drives strong performance for Q1 2024
 UK on track to achieve Adjusted EBITDA Profitability for FY 2024

 

 PensionBee Group plc ('PensionBee' or the 'Company'), a leading online pension
 provider, today announces a Q1 trading update (unaudited) for the three months
 ended 31 March 2024.

 Highlights

 

 ●            Assets under Administration increased by 44% year on year to £4.9bn (March
              2023: £3.4bn), underpinned by strong Net Flows from new and existing
              customers and supportive markets.
 ●            Invested Customers increased by 22% year on year to 240,000 (March 2023:
              198,000), demonstrating strong continued growth.
 ●            Net Flows per £ of Marketing Spend(1) increased by 24% year on year to £66,
              driven by effective deployment of marketing expenditure.
 ●            Customer Retention Rate remained >95%, driven by continued strong customer
              satisfaction and ongoing product innovation.
 ●            Revenue increased by 42% to £7m (Q1 2023: £5m), with Annual Run Rate Revenue
              having increased by 41% to £31m (Q1 2023: £22m).(2)
 ●            Adjusted EBITDA improved by 59% year on year to £(2)m (Q1 2023: £(5)m),
              driven by strong Revenue growth and cost efficiencies across the business. UK
              on track to achieve Adjusted EBITDA Profitability for FY 2024.

 

 Continued Advancement of Strategic Goals

 

 The Company has continued to grow its brand and acquire customers efficiently,
 investing £3.6m in marketing across the first quarter of the year, bringing
 the cumulative marketing investment since inception to £59m. PensionBee's
 brand awareness activities for the quarter have been centred on cost-effective
 channels such as radio, television and sports sponsorship and partnerships.
 This approach has been accompanied by continued investment in performance
 channels such as search and social media, with data-led insights driving
 decision-making. Cost per Invested Customer ('CPIC') has continued to
 demonstrate a downward trajectory of 3% year on year to £244, highlighting
 the strength of the Company's marketing capability and efficiency of spend,
 while brand awareness has increased to 55% from 50% in the previous
 quarter.(3)

 PensionBee has continued to innovate, to meet the needs of its customers and
 support their engagement. It has continued to provide customers with helpful
 tools they need to plan for their retirement, such as its tax relief, state
 pension and inflation calculators and the introduction of in-app withdrawals.
 The new checklist feature helps customers to identify and complete all the
 required steps to manage their pensions.

 The Company has continued to prioritise the delivery of excellent customer
 service, evidenced through the achievement of a 4.6★ Excellent Trustpilot
 rating from approximately 10,500 Trustpilot reviews, and consistently rapid
 response times on phones and live chat.

 PensionBee has continued with its ongoing investment in the scalability of its
 technology platform through internal automation, efficiency, security and
 pension transfer improvements to support productivity, as demonstrated by the
 achievement of an 18% improvement in productivity.(4)

 

 Guidance and Outlook

 

 The Board remains confident in PensionBee's potential for continued growth and
 profitability, due to a combination of the strength and stability of its
 existing customer base, together with its ability to attract new customers
 that generate growth in recurring Revenue through its scalable technology
 platform.

 The Company is pleased to reiterate the guidance previously provided for the
 UK: aiming to deliver sustained and high Revenue growth, pursuing c.2% market
 share of the £1.2 trillion transferable pensions market over the next 5-10
 years, and looking to onboard 1 million Invested Customers, creating a
 long-term Revenue ambition of c.£150m.

 Given its historical investment in its brand and technology over many years,
 and the achievement of ongoing Adjusted EBITDA profitability in the final
 quarter of 2023, the Company is poised to deliver Adjusted EBITDA
 profitability for the full year 2024, with an ambition to achieve long-term
 EBITDA margins of over 50%.

 The recently announced proposed US expansion in partnership with a large,
 US-based global financial institution will see the US-based partner providing
 its expertise and substantial marketing funding to the US business.
 Correspondingly, PensionBee's financial contribution will be financed from the
 existing resources of PensionBee Group plc, and as a result the US business
 does not change the existing guidance in the UK.

 Romi Savova, CEO of PensionBee, commented:

 "We are pleased to have grown substantially over the first quarter, with
 Assets under Administration reaching approximately £5 billion, now helping
 240,000 Invested Customers across the UK prioritise and engage with their
 retirements.

 Looking forward, as we continue to execute on our strategy, we remain
 confident in the continued growth of the business and the delivery of
 profitability across the UK business for the full year 2024, as we continue to
 help more and more consumers become Pension Confident."

 

 Analyst, Investor and Press Presentation

 

 A copy of the Q1 2024 Trading Update and the Q1 2024 Results Presentation will
 be made available post-market close on 24 April 2024 for download at:
 pensionbee.com/investor-relations/results-and-reports. A recording of the
 presentation will follow.

 There will be a webcast presentation for analysts, investors and press on
 Wednesday 24 April at 5:00pm UK (BST) / 12:00pm US (EST). Please contact
 press@pensionbee.com if you would like to attend.

 Alternatively you can register and access the webcast with the following
 links:
 Webcast Link: Webcast for video presentation
 Conference Call Link: Conference call for Q&A

 

 Financial Summary

 

                                       As at Period End
                                       Mar-2023  Mar-2024  YoY change
 AUA (£m)(5)                           3,379     4,857     44%
 AUA Retention Rate (% of AUA)(6)      >95%      >95%      Stable
 Invested Customers (thousands)(7)     198       240       22%
 Customer Retention Rate (% of IC)(8)  >95%      >95%      Stable
 Cost per Invested Customer (£)(9)     252       244       (3)%
 Revenue Margin (% of AUA)(10)         0.64%     0.64%     Stable

 

                                     Over the 3-month Period Ending
                                     Mar-2023     Mar-2024     YoY change
 Opening AUA (£m)(5)                 3,025        4,350        44%
    Gross Inflows (£m)               297          336          13%
    Gross Outflows (£m)              (64)         (101)        59%
 Net Flows (£m)                      233          235          1%
    Market Growth and Other (£m)     121          272          124%
 Closing AUA (£m)(5)                 3,379        4,857        44%

 

                                            Over the 3-month Period Ending
                                            Mar-2023     Mar-2024     YoY change
 Revenue (£m)(11)                           5            7            42%
 Cost Base (£m)                             (10)         (9)          (7)%
 Adjusted EBITDA (£m)(12)                   (5)          (2)          59%
 Adjusted EBITDA Margin (% of Revenue)(13)  (98)%        (28)%        69ppt

 

                                            For the Trailing 12-month Period Ending
                                            Mar-2023                       Mar-2024                       YoY change
 LTM Revenue (£m)                           19                             26                             38%
 LTM Adjusted EBITDA (£m)                   (15)                           (5)                            65%
 LTM Adjusted EBITDA Margin (% of Revenue)  (79)%                          (20)%                          59ppt

 Notes
 *   A ppt is a percentage point. A percentage point is the unit for the arithmetic
   difference of two percentages.
 1 Net Flows per £ of Marketing Spend is calculated as cumulative net flows
   divided by the marketing spend over the period.
 2 Annual Run Rate ("ARR") Revenue is calculated using the Recurring Revenue for
   the relevant month multiplied by 12.
 3 PensionBee prompted brand awareness tracker, April 2024. Prompted brand
   awareness measured through a consumer survey asking 'Which of the following
   have you heard of?' with respect to UK financial services brands.
 4 Productivity, measured using Invested Customers per Staff Member, is
   calculated using LTM average for total workforce. Management information as at
   31 March 2024.
 5 Assets under Administration ('AUA') is the total invested value of pension
   assets within PensionBee Invested Customers' pensions. It measures the new
   inflows less the outflows and records a change in the market value of the
   assets. AUA is a measurement of the growth of the business and is the primary
   driver of Revenue.
 6 AUA Retention measures the percentage of retained PensionBee AUA from Transfer
   Outs over the average of the trailing twelve months. High AUA retention
   provides more certainty of future Revenue. This measure can also be used to
   monitor customer satisfaction.
 7 Invested Customers ('IC') means those customers who have transferred pension
   assets or made contributions into one of PensionBee's investment plans.
 8 Customer Retention Rate measures the percentage of retained PensionBee
   Invested Customers over the average of the trailing twelve months. High
   customer retention provides more certainty of future Revenue. This measure can
   also be used to monitor customer satisfaction.
 9 Cost per Invested Customer ('CPIC') means the cumulative advertising and
   marketing costs incurred since PensionBee commenced trading up until the
   relevant point in time divided by the cumulative number of Invested Customers
   at that point in time. This measure monitors cost discipline of customer
   acquisition. PensionBee's desired CPIC threshold is £200-£250.
 10  Revenue Margin is calculated by using the last twelve months of Recurring
   Revenue over the average quarterly AUA held in PensionBee's investment plans
   over the period.
 11  Revenue means the income generated from the asset base of PensionBee's
   customers, essentially annual management fees charged on the AUA, together
   with a minor revenue contribution from other services.
 12  Adjusted EBITDA is the profit or loss for the period before taxation, finance
   costs, depreciation, share based compensation and transaction costs.
 13  Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of Revenue for
   the relevant period.

 

 

 Enquiries
 PensionBee

 

Press
 press@pensionbee.com
 +44 20 3557 8444
 Becky O'Connor
 Laura Dunn-Sims
 Steven Kennedy

 

Analysts and Investors
 investor@pensionbee.com

 PensionBee

 

 Press
 press@pensionbee.com
 +44 20 3557 8444
 Becky O'Connor
 Laura Dunn-Sims
 Steven Kennedy

 

 Analysts and Investors
 investor@pensionbee.com

 

 About PensionBee

 

 PensionBee is a leading online pension provider, making pension management
 easy for its customers while they save for a happy retirement.

 PensionBee helps its customers combine their old pension pots, make flexible
 contributions, invest in line with their goals and values and make withdrawals
 from the age of 55 (increasing to 57 in 2028). PensionBee offers a range of
 investment plans, including fossil fuel free and impact investing options,
 from some of the world's largest asset managers.

 Operating in the UK Defined Contribution market which exceeds £1 trillion of
 pension assets, PensionBee has grown rapidly through its direct-to-consumer
 marketing activities, creating a household brand name for the mass market.

 The Company has £4.9bn in Assets Under Administration and 240,000 Invested
 Customers as at 31 March 2024. PensionBee has consistently maintained a
 Customer Retention Rate in excess of 95% and an Excellent Trustpilot rating
 from more than 10,500 customers, reflecting its commitment to outstanding
 customer service.

 PensionBee is admitted to trading on the Premium Segment of the London Stock
 Exchange's Main Market (LON:PBEE).

 

 Forward Looking Statements

 Statements that are not historical facts, including statements about
 PensionBee's or management's beliefs and expectations, are forward-looking
 statements. The results contain forward-looking statements, which by their
 nature involve substantial risks and uncertainties as they relate to events
 and depend on circumstances which will occur in the future and actual results
 and developments may differ materially from those expressly stated or
 otherwise implied by these statements.

 These forward-looking statements are statements regarding PensionBee's
 intentions, beliefs or current expectations concerning, among other things,
 its results of operations, financial condition, prospects, growth, strategies
 and the industry and markets within which it operates.

 These forward-looking statements relate to the date of these results and
 PensionBee does not undertake any obligation to publicly release any revisions
 to these forward-looking statements to reflect events or circumstances after
 the date of the results.

 

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