REG - PensionBee Group plc - Interim Results 2024
28/08/2024 16:30
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RNS Number : 0456C PensionBee Group plc 28 August 2024
PensionBee Group plc
Incorporated in England and Wales
Registration Number: 13172844
LEI: 2138008663P5FHPGZV74
ISIN: GB00BNDRLN84
28 August 2024
PensionBee Group plc
Interim Results for the six months ended 30 June 2024
Creating a Global Leader in the Retirement Market
Successful Strategy drives Strong UK Business Performance
US Launch builds on Growth Ambition and Leverages Execution Capability
PensionBee Group plc ('PensionBee' and together with its subsidiary companies
the 'Group'), a leading online pension provider, today announces interim
results for the six month period ended 30 June 2024 (1H 2024).
The Group has delivered strong financial and operational performance during
the first half of the year, with high levels of growth achieved across key
metrics, in line with the Q2 2024 Results announcement released on 24 July
2024.
Highlights(1)
● PensionBee's online pension offering continued to make retirement planning and
saving straightforward and enjoyable, making customers 'Pension Confident',
serving 252,000 Invested Customers by June 2024 (1H 2023: 211,000).
● Assets under Administration rose to £5.2bn by June 2024 (1H 2023: £3.7bn),
with Revenue correspondingly growing to £15.4m for the half year 2024 (1H
2023: £10.9m).
● PensionBee achieved Adjusted EBITDA profitability for the second quarter of
the year, paving the way for its UK business to reach Adjusted EBITDA
profitability for the full year 2024.(2)
● Efficient customer acquisition continued to be core to the growth strategy.
With PensionBee's household brand name in the UK and prompted brand awareness
of 55%(3) (1H 2023: 50%), 23,000 new Invested Customers were onboarded during
the first half of the year (1H 2023: 28,000). Cost per Invested Customer
continued to decline to £242 (1H 2023: £247).
● PensionBee's scalable technology platform enabled it to serve customers with
new product innovations, enabling continued engagement.
● Delivery of exceptional Customer Service continued to be prioritised,
demonstrated by the achievement of a 4.7★ Excellent Trustpilot score(4) (1H
2023: 4.6★) and rapid response times on live chat and phones during the busy
end of tax year period.
● PensionBee entered the US market, the world's largest Defined Contribution
pension market, in partnership with State Street Global Advisors, one of its
long-standing asset management providers.
Romi Savova, Chief Executive Officer of PensionBee, commented:
"Our resolute focus on serving our customers, together with the consistent
execution of our strategy, have seen us deliver strong operational and
financial performance across the first half of the year - achieving 40% growth
of Assets under Administration to £5.2 billion and the substantial growth of
our Invested Customers base to 252,000. We continue to delight our customers
with excellent customer service and new product initiatives, as reflected in
our 4.7★ Excellent Trustpilot rating and Customer Retention Rate in excess
of 95%. We remain confident in the delivery of Adjusted EBITDA profitability
across the UK business for the full year 2024.
Leveraging the deep knowledge and expertise gained from successfully building
and growing our UK business, we are now creating a global leader in the
retirement market. We have entered the US market, the world's largest Defined
Contribution pension market, expanding the reach of our award-winning customer
proposition, innovative technology platform and unique marketing approach to
millions of Americans, many of whom also struggle to prepare adequately for
retirement as they navigate a complex and confusing pensions landscape.
This marks a significant step towards the achievement of our vision: a world
where everyone can enjoy a happy retirement."
Romi Savova, Chief Executive Officer of PensionBee, commented:
"Our resolute focus on serving our customers, together with the consistent
execution of our strategy, have seen us deliver strong operational and
financial performance across the first half of the year - achieving 40% growth
of Assets under Administration to £5.2 billion and the substantial growth of
our Invested Customers base to 252,000. We continue to delight our customers
with excellent customer service and new product initiatives, as reflected in
our 4.7★ Excellent Trustpilot rating and Customer Retention Rate in excess
of 95%. We remain confident in the delivery of Adjusted EBITDA profitability
across the UK business for the full year 2024.
Leveraging the deep knowledge and expertise gained from successfully building
and growing our UK business, we are now creating a global leader in the
retirement market. We have entered the US market, the world's largest Defined
Contribution pension market, expanding the reach of our award-winning customer
proposition, innovative technology platform and unique marketing approach to
millions of Americans, many of whom also struggle to prepare adequately for
retirement as they navigate a complex and confusing pensions landscape.
This marks a significant step towards the achievement of our vision: a world
where everyone can enjoy a happy retirement."
Performance Overview(1)
● Assets under Administration increased by 40% year on year to £5.2bn (1H 2023:
£3.7bn), driven by strong net flows from new and existing customers and
supportive markets.
● Correspondingly, Revenue increased by 41% to £15.4m (1H 2023: £10.9m), owing
to the resilient Revenue Margin.
● Invested Customer base increased by 19% year on year to 252,000 (1H 2023:
211,000), driven by continued brand awareness. Customer Retention Rate and AUA
Retention Rate both >95%, remained high and stable (1H 2023: >95%).
● Group Adjusted EBITDA of £(2.0)m (1H 2023: £(7.9)m) and Group Adjusted
EBITDA Margin of (13)% (1H 2023: (73)%), reflecting efficient investment in
marketing, operating leverage and commitment to profitability in the UK.(2)
● Profit/(Loss) before Tax of £(3.8)m (1H 2023: £(9.2)m and Profit/(Loss)
before Tax Margin of (24)% (1H 2023: (85)%).
● Basic Earnings per Share of (1.64)p (1H 2023: (4.06)p).
● Cash position of £10.9m (1H 2023: £14.2m).
Group Financial Highlights(1)
For the 6-month Period Ending
Jun-2024 Jun-2023 YoY
Revenue (£m) 15.4 10.9 41%
Cost Base (£m)(5) (17.4) (18.8) (7)%
Adjusted EBITDA (£m)(2) (2.0) (7.9) 75%
Adjusted EBITDA Margin (% of Revenue)(2) (13)% (73)% +60ppt(6)
Profit/(Loss) before Tax (£m) (3.8) (9.2) 59%
Profit/(Loss) before Tax Margin (% of Revenue) (24)% (85)% +60ppt(6)
Basic and Diluted Earnings per Share (1.64)p (4.06)p 60%
Group Non-Financial Highlights(1)
As at Period End
Jun-2024 Jun-2023 YoY
AUA (£m) 5,196 3,704 40%
AUA Retention Rate (% of AUA) >95% >95% stable at >95%
Invested Customers ('IC') (thousands) 252 211 19%
Customer Retention Rate (% of IC) >95% >95% stable at >95%
Cost per Invested Customer (£) 242 247 (2)%
Revenue Margin 0.64% 0.65% stable
As at Period End
Jun-2024 Jun-2023 YoY
Opening AUA (£m) 4,350 3,025 44%
Gross Inflows (£m) 695 612 14%
Gross Outflows (£m) (214) (143) 49%
Net Flows (£m) 482 469 3%
Market Growth and Other (£m) 364 210 74%
Closing AUA (£m) 5,196 3,704 40%
Notes:
1. See Definitions section.
2. PensionBee's Key Performance Indicators include alternative
performance measures ('APM's), in particular Adjusted Earnings Before
Interest, Taxes, Depreciation, Amortisation, Share-based payments and
Expansion Costs ('Adjusted EBITDA'). APMs are not defined by International
Financial Reporting Standards ('IFRS') and should be considered together with
the Group's IFRS measurements of performance. PensionBee believes APMs assist
in providing additional insight into the underlying performance of PensionBee
and aid comparability of information between reporting periods. A
reconciliation to the nearest IFRS number is provided in the Notes to the
Condensed Consolidated Financial Statements 'Alternative Performance
Measures'.
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:
Aviva 82%, Scottish Widows 74%, Standard Life 68%, PensionBee 55%, Hargreaves
Lansdown 40%, Nutmeg 37%, AJ Bell 33%, Interactive Investor 11%.
4. Trustpilot score of 4.7★ out of 5 (based on 10,920 reviews)
recorded 11 July 2024.
5. Cost Base is Money Manager Costs, Technology Platform Costs &
Other Operating Expenses and Marketing cost.
6. ppt is the absolute change in percentage points.
Enquiries
PensionBee
Becky O'Connor
Laura Dunn-Sims
Steven Kennedy
press@pensionbee.com (mailto:press@pensionbee.com)
+44 20 3557 8444
About PensionBee
PensionBee is creating a global leader in the consumer retirement market, with
£5.2 billion in assets on behalf of 252,000 customers.
Founded in 2014, we aspire to make as many people as possible pension
confident so that everyone can enjoy a happy retirement.
We help our customers to combine their retirement savings into a new online
account, which they can manage from the palm of their hand.
PensionBee accounts are invested by the world's largest investment managers,
collectively looking after more than $10 trillion in savings between them.
Each PensionBee customer has a personal account manager ('BeeKeeper') to guide
them through their savings and retirement journey. PensionBee has an
'Excellent' Trustpilot rating based on over 10,000 reviews.
As a public company, we aspire to the highest standards in everything we do
because our customers deserve peace of mind. Our team of c.200 professionals,
based in London and New York, has one focus: you, our customer.
PensionBee is listed on the London Stock Exchange (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 Interim 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 Interim 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 Interim Results.
Chief Executive Officer's Report
Creating a Global Leader in the Consumer Retirement Market
We are creating a global leader in the consumer retirement market. We exist to
help our customers prepare for and enjoy a happy retirement. We enable our
customers to combine their old retirement accounts into a new online plan. We
enable them to make contributions, to invest in line with their objectives
with money managed by the world's largest asset managers, and ultimately to
withdraw and spend their retirement savings.
Our aspiration is to build a lifetime relationship with our customers,
generating predictable and scalable revenue for our company and returns for
our investors.
Our Mission and Vision
As we fast approach our 10th anniversary since inception, we have reflected on
and refreshed our company's mission and vision, which guide us and remind us
of our reason for being.
Our mission is to build pension confidence
Having made pensions simple, we have evolved our mission to reflect the
ambition that we have for our customers: we want them to feel empowered and
confident managing through all stages of their working life through to their
retirement. We have supported this with continued product innovation designed
to meet customer needs, through the prioritisation of excellent customer
service and the maintenance of a leading technology platform. The need for
retirement planning and pension ownership has never been greater, so our
mission remains as critical as ever.
Our vision is a world where everyone can enjoy a happy retirement
Having successfully built and grown our UK business into a leading online
pension provider, developing a depth and breadth of knowledge and expertise,
we are leveraging this to create a global leader in the retirement market.
Launching our US business and entering the world's largest Defined
Contribution pension market, has enabled us to expand the reach of our
award-winning customer proposition, innovative technology platform and unique
marketing approach to millions of Americans. This represents a significant
step towards the achievement of our vision.
Overview of Group Performance
2024 has provided a more supportive and stable market backdrop than previous
years, but nonetheless continued geopolitical risks, a persistently high
interest rate environment, and it being a critical election year in both the
UK and the US, have meant some uncertainty has remained.
Our business has continued to demonstrate resilience, strength and substantial
growth. Our customer-centric proposition, led by product and technological
innovation, excellent customer service, and transparent and straightforward
fees, has continued to resonate well in the enormous market of pension savers.
An unwavering focus on serving our customers, together with our team's ability
to execute and advance our strategic goals, have supported the delivery of
strong Group financial and operational performance for the first half of 2024.
We have maintained our strong growth momentum, with Assets under
Administration ('AUA') increasing by 40% to £5.2bn (1H 2023: £3.7bn),
underpinned by £482m of Net Flows (1H 2023: £469m) from new and existing
customers and £364m from supportive markets growing our customers' pension
assets (1H 2023: £210m). Revenue increased by 41% to £15.4m (1H 2023:
£10.9m) across the first half of the year, with Annual Run Rate Revenue
increasing by 39% to £32m (June 2023: £23m).(5)
We achieved significant customer growth, efficiently acquiring 23,000 new
Invested Customers across the first half of the year (1H 2023: 28,000) to
reach 252,000 Invested Customers (1H 2023: 211,000). We achieved this customer
growth while maintaining a Customer Retention rate of 96% (1H 2023: 97%) and
continued strong customer satisfaction (4.7★ out of 5 Excellent Trustpilot
score).(1)
Efficient investment in marketing and in our scalable technology platform,
together with overarching cost discipline, have driven rapid and efficient
growth. Our ability to efficiently spend on marketing has seen us maintain our
household brand name status, which has supported new customer growth with a
declining customer acquisition cost.
Accordingly, Group Adjusted EBITDA increased to £(2.0)m (1H 2023: £(7.9)m)
and the Group Adjusted EBITDA Margin narrowed to (13)% (1H 2023: (73)%),
demonstrating the operating leverage in our business model, and paving the way
for the achievement of Adjusted EBITDA profitability in the UK business for
the full year 2024. Profit/(Loss) before Tax narrowed to £(3.8)m (1H 2023:
£(9.2)m).
United Kingdom: Successful Strategy drives Strong UK Business Performance
UK Overview
Efficient Investment in Customer Acquisition and Brand Awareness
In the first half of the year, we invested £5.8m in marketing expenditure (1H
2023: £6.8m), bringing our total marketing spend since inception to £61m (1H
2023: £52m). This investment has been instrumental in growing our brand
presence and in enabling us to attract new customers efficiently.
Highlights include our National Geographic sponsorship, further investment in
our award-winning 'Pension Confident' podcast, partnerships with other
financial communities, and our longstanding Brentford Football Club
sponsorship.
The strength of our marketing capability and our data-led multi-channel
marketing approach, combined with PensionBee's strong brand recognition in the
UK as evidenced by prompted brand awareness of c.55% (1H 2023: 50%), has
continued to deliver marketing efficiency.(2) We achieved a 3% year-over-year
increase in Net Flows with a 14% reduction in marketing expenditure,
highlighting the efficiency and impact of our marketing investments. At the
same time, Cost per Invested Customer ('CPIC') has continued to demonstrate a
downward trajectory, in line with expectations and within the desired
threshold, reducing to £242 (H1 2023: £247).
Leadership in Product Innovation
We continued to develop our product offering for the benefit of our customers,
incrementally rolling out new features to enable greater customer engagement.
Our data shows that engaged customers are more likely to grow their pensions
with us and are therefore more likely to enjoy the type of retirement they
deserve.
In the first half of the year, we launched several new features designed to
enhance customer experience and engagement. Notably, we released our new fund
past performance tracker, a feature which provides customers with a clearer
understanding of our plans through more investment transparency and
educational content.
The implementation of a new onboarding checklist feature in the app has
provided our customers with a handy tool to help them more fully utilise the
app's functionality. The checklist encourages customers to transfer more
pensions to their PensionBee account, to add contributions and encourages
deeper engagement with our services.
Investment in and Development of an Industry Leading Technology Platform
We continued to invest in our technology capability over the first half of the
year in support of our growth ambitions. We invested in scaling our technology
by enhancing internal automation, efficiency, security, and pension transfer
processes. These efforts have boosted productivity, evidenced by a 23%
improvement year-on-year to 1,264 (1H 2023: 1,026) in the Invested Customers
per Staff Member metric (1H 2023: 12%).(6)
We have continued to explore the potential for adopting artificial
intelligence ('AI') tooling within our departments, completing a company-wide
trial of an AI platform, and prototyping large language model based analysis
of customer feedback through our data warehouse. We are increasingly
integrating our data platform within our daily product management operations,
linking core Key Performance Indicators to projects to ensure our
multidisciplinary development teams remain productive and impactful.
Finally, we continued to implement cyber security tools and best practices to
keep our customers' data safe. We transitioned our Information Security
Management System to the updated version of the ISO 27001 standard. Our
InfoSec programme continued to reinforce a culture of security awareness
through threat simulation, monitoring and automation in information security
operations and compliance.
Focus on Excellent Customer Service
We continued our relentless focus on the provision of excellent customer
service to create the best pension experience possible for our customers, to
leave them delighted.
We are proud to have delivered excellent customer support, as demonstrated by
rapid response times even through the busy end of tax year period, with live
chat and phone waiting times of 14 and 45 seconds respectively. Consequently,
we have continued to enjoy high ratings from our customers, giving our team
great purpose and inspiration. We pay close attention to our Trustpilot and
app store ratings, which serve as an indicator of customer satisfaction. We
are pleased to have maintained our excellent ratings across both, with a
4.7★ Excellent Trustpilot rating having been achieved from 10,920 customer
reviews (1H 2023: 4.6★).(1)
Ensuring excellent levels of customer satisfaction is central to our ambition
of retaining and serving our customers throughout their lifetimes. We
demonstrated the continued strength of our customer value proposition by
maintaining a Customer Retention Rate of 96% for the first half of the year
(1H 2023: 97%). It is as a result of these high customer retention levels
generating high levels of recurring revenues, combined with the scalability of
our technology platform, that we can generate operating leverage over time.
UK Guidance and Outlook
We are pleased to reiterate the guidance previously provided.
UK Revenue Objectives
● We are aiming to deliver sustained and high Revenue growth by continuing to
appeal to the mass market acquiring more new customers and growing customers'
pension balances.
● We are pursuing a c.2% market share of the £1.2tr UK transferable pensions
market over the next 5-10 years equivalent to c.1m Invested Customers
(assuming an average pension pot size of £20000-25000).(3)
● We expect to maintain relative Revenue Margin stability translating into
long-term Revenue growth.
UK Profitability Objectives
● Given historical investment in brand and technology over many years and the
achievement of ongoing Adjusted EBITDA profitability in the final quarter of
2023 and again in this quarter the UK business is on track to deliver Adjusted
EBITDA profitability for the full year 2024.
● Our ambition is to achieve long-term EBITDA Margins of over 50%leveraging the
scalability of the technology platform through further automation while
maintaining the high quality of service and by steadily continuing to reduce
the Cost per Invested Customer
United States: Launch builds on Growth Ambition and Leverages Execution
Capability
US Overview
On 18 July 2024, we announced the launch of our US business, confirming that
our subsidiary PensionBee Inc. had entered into a strategic partnership with
one of our long-standing asset management providers, State Street Global
Advisors ('State Street'). The United States is the world's largest Defined
Contribution pension market, representing approximately 80% of the global
total and $22.5tr in assets.(4)
PensionBee will deploy its award-winning online retirement proposition and
proprietary technology, enabling US consumers to easily consolidate and roll
over their 401(k) plans and Individual Retirement Accounts ('IRAs') into one
new PensionBee IRA.
PensionBee Inc. offers a range of investment portfolio options, with
underlying State Street model portfolios. Each investment portfolio is
constructed exclusively with Exchange Traded Funds ('ETFs') managed by State
Street.
The PensionBee IRA is offered under a wrap fee program, including the
PensionBee advisory service, asset allocation and management fees and custody
fees.
State Street will provide meaningful marketing support to PensionBee as we use
our data-led, multi-channel customer acquisition approach to attract new
customers. Under the terms of the agreement with State Street, the annual
amount of the marketing support is variable based on the achievement of
certain net new asset thresholds. Marketing support is expected to continue
for 5-7 years.
PensionBee Inc. is a wholly owned subsidiary of PensionBee. PensionBee Inc. is
financially managed separately to PensionBee Group's UK business. PensionBee
Inc. is separately regulated by the Securities and Exchange Commission as an
investment adviser, enabling it to operate federally and statewide without
additional registrations.
US Objectives
● We expect our US business to grow rapidly. We aim to manage $20-25bn in US
Defined Contribution assets over the next decade, such that it becomes of
equal importance to our growing UK business.
● PensionBee Group will capitalise PensionBee Inc. with an injection from the
existing resources of its Group balance sheet (approximately $4m over 36
months).
● PensionBee Inc. is targeting profitability in the medium-term.
Dividend
In line with our stated dividend policy, the Company does not intend to pay
any dividends as we continue to execute our strategy and invest in growth in
the UK and the US. Whilst the Company has not paid dividends since
incorporation, it intends to revisit its dividend policy in future years and
may revise its dividend policy from time to time.
Closing Remarks
Keeping the consumer firmly at the heart of what we do, we remain committed to
serving their needs.
With more consumers consolidating their pensions than ever before, we will
continue to capture market share in the vast UK pensions market, through our
well established and trusted brand, continued product innovation and
prioritisation of excellent customer service.
With nearly ten years' worth of experience building a scalable technology
platform, developing marketing expertise and establishing a household brand,
we are excited to have taken the transformative step of launching in the US.
Inspired by the size and opportunity of the world's largest Defined
Contribution pension market, we now look forward to helping millions of US
consumers also enjoy a happy retirement.
As we continue on our journey, creating a global leader in the consumer
retirement market and growing PensionBee for the success of all our
stakeholders, I wish to pay special thanks to our dedicated team who continue
to work tirelessly, and without whom none of this would be possible.
Romi Savova
Chief Executive Officer
28 August 2024
Notes:
1. Trustpilot score of 4.7★ out of 5 (based on 10,920 reviews)
recorded 11 July 2024.
2. 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:
Aviva 82%, Scottish Widows 74%, Standard Life 68%, PensionBee 55%, Hargreaves
Lansdown 40%, Nutmeg 37%, AJ Bell 33%, Interactive Investor 11%.
3. £1.2tr UK transferable pensions market is as of 2023 while the
£722bn reference previously used was as of 2019; as such the increase is
driven due to growth over that time period (c.10% CAGR consistent with c.12.5%
CAGR in the period before that).
4. Investment Company Institute, 'Release: Quarterly Retirement Market
Data' as at 13 December 2023. Includes the sum of DC Plans and IRAs.
5. Annual Run Rate ('ARR') Revenue is calculated using the recurring
Revenue for the relevant month multiplied by 12.
6. Productivity, measured using Invested Customers per Staff Member
metric, is calculated using an LTM average for the total workforce. Management
information as at 30 June 2024.
Group Financial Review(1)
Trading performance in the first half of 2024 was strong, as we maintained our
dual focus: optimising growth whilst steering towards profitability.
The delivery of strong growth over the first half of 2024 was underpinned by a
combination of new customer acquisition, asset growth from existing customers
and sustained global equity markets. Accordingly, Invested Customers ('ICs')
grew by 19% to 252,000 (1H 2023: 211,000), Assets under Administration ('AUA')
increased by 40% to £5.2bn (1H 2023: £3.7bn) and Revenue increased by 41% to
£15.4m (1H 2023: £10.9m).
In addition to driving strong growth, a powerful combination of the inherent
scalability of our technology platform, together with increasingly efficient
marketing spend and an overarching focus on cost control, have enabled us to
clearly demonstrate the operating leverage in our business model.
Over the first half of the year, Group Adjusted EBITDA narrowed to £(2.0)m
(1H 2023: £(7.9)m) and the Group Adjusted EBITDA Margin narrowed to (13)% (1H
2023: (73)%). Having achieved positive Adjusted EBITDA in the UK business for
Q2 2024, we remain firmly on track and committed to achieving the
profitability on this same basis for this full year.
Similarly, Group Profit/(Loss) before Tax narrowed to £(3.8)m (1H 2023:
£(9.2)m).
UK Profitability Objectives
● Given historical investment in brand and technology over many years and the
achievement of ongoing Adjusted EBITDA profitability in the final quarter of
2023 and again in this quarter the UK business is on track to deliver Adjusted
EBITDA profitability for the full year 2024.
● Our ambition is to achieve long-term EBITDA Margins of over 50%leveraging the
scalability of the technology platform through further automation while
maintaining the high quality of service and by steadily continuing to reduce
the Cost per Invested Customer
United States: Launch builds on Growth Ambition and Leverages Execution
Capability
US Overview
On 18 July 2024, we announced the launch of our US business, confirming that
our subsidiary PensionBee Inc. had entered into a strategic partnership with
one of our long-standing asset management providers, State Street Global
Advisors ('State Street'). The United States is the world's largest Defined
Contribution pension market, representing approximately 80% of the global
total and $22.5tr in assets.(4)
PensionBee will deploy its award-winning online retirement proposition and
proprietary technology, enabling US consumers to easily consolidate and roll
over their 401(k) plans and Individual Retirement Accounts ('IRAs') into one
new PensionBee IRA.
PensionBee Inc. offers a range of investment portfolio options, with
underlying State Street model portfolios. Each investment portfolio is
constructed exclusively with Exchange Traded Funds ('ETFs') managed by State
Street.
The PensionBee IRA is offered under a wrap fee program, including the
PensionBee advisory service, asset allocation and management fees and custody
fees.
State Street will provide meaningful marketing support to PensionBee as we use
our data-led, multi-channel customer acquisition approach to attract new
customers. Under the terms of the agreement with State Street, the annual
amount of the marketing support is variable based on the achievement of
certain net new asset thresholds. Marketing support is expected to continue
for 5-7 years.
PensionBee Inc. is a wholly owned subsidiary of PensionBee. PensionBee Inc. is
financially managed separately to PensionBee Group's UK business. PensionBee
Inc. is separately regulated by the Securities and Exchange Commission as an
investment adviser, enabling it to operate federally and statewide without
additional registrations.
US Objectives
● We expect our US business to grow rapidly. We aim to manage $20-25bn in US
Defined Contribution assets over the next decade, such that it becomes of
equal importance to our growing UK business.
● PensionBee Group will capitalise PensionBee Inc. with an injection from the
existing resources of its Group balance sheet (approximately $4m over 36
months).
● PensionBee Inc. is targeting profitability in the medium-term.
Dividend
In line with our stated dividend policy, the Company does not intend to pay
any dividends as we continue to execute our strategy and invest in growth in
the UK and the US. Whilst the Company has not paid dividends since
incorporation, it intends to revisit its dividend policy in future years and
may revise its dividend policy from time to time.
Closing Remarks
Keeping the consumer firmly at the heart of what we do, we remain committed to
serving their needs.
With more consumers consolidating their pensions than ever before, we will
continue to capture market share in the vast UK pensions market, through our
well established and trusted brand, continued product innovation and
prioritisation of excellent customer service.
With nearly ten years' worth of experience building a scalable technology
platform, developing marketing expertise and establishing a household brand,
we are excited to have taken the transformative step of launching in the US.
Inspired by the size and opportunity of the world's largest Defined
Contribution pension market, we now look forward to helping millions of US
consumers also enjoy a happy retirement.
As we continue on our journey, creating a global leader in the consumer
retirement market and growing PensionBee for the success of all our
stakeholders, I wish to pay special thanks to our dedicated team who continue
to work tirelessly, and without whom none of this would be possible.
Romi Savova
Chief Executive Officer
28 August 2024
Notes:
1. Trustpilot score of 4.7★ out of 5 (based on 10,920 reviews)
recorded 11 July 2024.
2. 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:
Aviva 82%, Scottish Widows 74%, Standard Life 68%, PensionBee 55%, Hargreaves
Lansdown 40%, Nutmeg 37%, AJ Bell 33%, Interactive Investor 11%.
3. £1.2tr UK transferable pensions market is as of 2023 while the
£722bn reference previously used was as of 2019; as such the increase is
driven due to growth over that time period (c.10% CAGR consistent with c.12.5%
CAGR in the period before that).
4. Investment Company Institute, 'Release: Quarterly Retirement Market
Data' as at 13 December 2023. Includes the sum of DC Plans and IRAs.
5. Annual Run Rate ('ARR') Revenue is calculated using the recurring
Revenue for the relevant month multiplied by 12.
6. Productivity, measured using Invested Customers per Staff Member
metric, is calculated using an LTM average for the total workforce. Management
information as at 30 June 2024.
Group Financial Review(1)
Trading performance in the first half of 2024 was strong, as we maintained our
dual focus: optimising growth whilst steering towards profitability.
The delivery of strong growth over the first half of 2024 was underpinned by a
combination of new customer acquisition, asset growth from existing customers
and sustained global equity markets. Accordingly, Invested Customers ('ICs')
grew by 19% to 252,000 (1H 2023: 211,000), Assets under Administration ('AUA')
increased by 40% to £5.2bn (1H 2023: £3.7bn) and Revenue increased by 41% to
£15.4m (1H 2023: £10.9m).
In addition to driving strong growth, a powerful combination of the inherent
scalability of our technology platform, together with increasingly efficient
marketing spend and an overarching focus on cost control, have enabled us to
clearly demonstrate the operating leverage in our business model.
Over the first half of the year, Group Adjusted EBITDA narrowed to £(2.0)m
(1H 2023: £(7.9)m) and the Group Adjusted EBITDA Margin narrowed to (13)% (1H
2023: (73)%). Having achieved positive Adjusted EBITDA in the UK business for
Q2 2024, we remain firmly on track and committed to achieving the
profitability on this same basis for this full year.
Similarly, Group Profit/(Loss) before Tax narrowed to £(3.8)m (1H 2023:
£(9.2)m).
Driving Customer Acquisition through Efficient Investment in Brand Awareness
As at Year End
Jun-2024 Jun-2023 YoY
Advertising and Marketing Expenses
Advertising and Marketing Expenses (£m) (5.8) (6.8) (14)%
Cost per Invested Customer (£) 242 247 within threshold
Customers
Invested Customers (thousands) 252 211 19%
In the UK, we continued to grow our brand and acquire customers efficiently,
investing £5.8m (1H 2023: £6.8m) in diversified marketing activities across
the first half of the year, bringing the cumulative marketing investment since
inception to £61m (H1 2023: £52m). We achieved a 3% year-over-year increase
in Net Flows despite a 14% reduction in marketing expenditure, highlighting
the efficiency and impact of our marketing investments.
Cost per Invested Customer also continued to demonstrate a downward trajectory
(H1 2024: £242 vs. H1 2023: £247), highlighting the strength of the
Company's marketing capability, the efficiency of spend, and the importance of
household brand awareness in driving customer acquisition.
Strong Asset Growth driven by High Retention Rates and Effective Customer
Acquisition
As at Period End
Jun-2024 Jun-2023 YoY
Customer Retention Rate (% of IC) 96% 97% Stable at >95%
AUA Retention Rate (% of AUA) 96% 97% Stable at >95%
Opening AUA (£m) 4,350 3,025 44%
Gross Inflows (£m) 695 612 14%
Gross Outflows (£m) (214) (143) 49%
Net Flows (£m) 482 469 3%
Market Growth and Other (£m) 364 210 n/m
Closing AUA (£m) 5,196 3,704 40%
Net Flows (£m) 482 469 3%
Of which Net Flows from New Customers (£m) 355 365 (3)%
Of which Net Flows from Existing Customers (£m) 127 104 22%
In the UK, we continued to grow our brand and acquire customers efficiently,
investing £5.8m (1H 2023: £6.8m) in diversified marketing activities across
the first half of the year, bringing the cumulative marketing investment since
inception to £61m (H1 2023: £52m). We achieved a 3% year-over-year increase
in Net Flows despite a 14% reduction in marketing expenditure, highlighting
the efficiency and impact of our marketing investments.
Cost per Invested Customer also continued to demonstrate a downward trajectory
(H1 2024: £242 vs. H1 2023: £247), highlighting the strength of the
Company's marketing capability, the efficiency of spend, and the importance of
household brand awareness in driving customer acquisition.
Strong Asset Growth driven by High Retention Rates and Effective Customer
Acquisition
As at Period End
Jun-2024 Jun-2023 YoY
Customer Retention Rate (% of IC) 96% 97% Stable at >95%
AUA Retention Rate (% of AUA) 96% 97% Stable at >95%
Opening AUA (£m) 4,350 3,025 44%
Gross Inflows (£m) 695 612 14%
Gross Outflows (£m) (214) (143) 49%
Net Flows (£m) 482 469 3%
Market Growth and Other (£m) 364 210 n/m
Closing AUA (£m) 5,196 3,704 40%
Net Flows (£m) 482 469 3%
Of which Net Flows from New Customers (£m) 355 365 (3)%
Of which Net Flows from Existing Customers (£m) 127 104 22%
During the first half of 2024, we achieved strong growth momentum. As at the
end of June we recorded £5.2bn of AUA (1H 2023: £3.7bn), an increase of 40%
year on year. £846m of AUA was generated over the first half of the year,
surpassing last year's equivalent by £168m over the same period. The key
growth drivers were Net Flows from New Customers, Net Flows from Existing
Customers and Market Growth and Other.
Net Flows from New Customers represented the majority of AUA growth and
accounted for £355m of Net Flows (1H 2023: £365m). This strong growth was
achieved with a 14% reduction in marketing investment to £5.8m (1H 2023:
£6.8m) during the first half of the year, underscoring the importance of
household brand name status (with prompted brand awareness now standing at
55%)2 and the strength of our data-led customer acquisition capabilities.
Net Flows from Existing Customers further drove AUA growth, reaching £127m in
the first six months of the year (1H 2023: £104m), as customers continued to
grow their pension savings with PensionBee through further consolidation and
contributions. The increase reflected our tailored focus on a more mature
demographic of customers (with a slightly larger average pension pot size).
Our commitment to continuous product development drives engagement with our
customers, which was reflected in our Customer Retention Rate of 96% (1H 2023:
97%). This was consistent with historical performance levels, reflecting
trends in general consumer behaviour around long-term saving products and
importantly, underscoring our customers' continued satisfaction with our
product innovation and their appreciation of our excellent customer service.
As is customary in the industry, pensions are invested in capital markets and
therefore, the health of the markets are a driver of movements in AUA. As
markets regained some stability after a challenging and volatile few years, we
saw market growth account for £364m of the overall AUA growth in the first
half of the year (1H 2023: £210m).
Resilient Revenue Margin drove Recurring Revenue
For the 6-month Period Ending
Jun-2024 Jun-2023 YoY
Revenue Margin (% of AUA) 0.64% 0.65% stable
Revenue (£m) 15.4 10.9 41%
We translated strong year-on-year AUA growth of 40% for 2024 (2023: 38%) into
Revenue growth of 41%, reaching £15.4m for the first half of the year (1H
2023: £10.9m), by virtue of our resilient Revenue Margin (the annual
management fee after discounts) of 0.64% (2023: 0.65%).
Since the vast majority of our Revenue is derived from annual management fees
charged as a percentage of AUA, the high retention of Invested Customers and
AUA makes the overwhelming majority of our Revenue recurring in nature.
Revenue is also inclusive of revenue generated from other activities such as
our partnership with intermediaries such as LifeSearch, as well as ad-hoc
income, although this currently represents an immaterial portion of our
overall Revenue.
Revenue for the first half of the year was generated solely by the UK, as the
US business had not started trading for this period.
Efficient Investment in our Industry Leading Technology Platform, People and
Product
For the 6-month Period Ending
Jun-2024 Jun-2023 YoY
Money Manager Costs (£m)(5) (2.0) (1.6) 22%
Employee Benefits Expense (5.7) (6.1) (6)%
(excluding Share-based Payment) (£m)
Other Operating Expenses (£m) (3.8) (4.3) (11)%
Technology Platform Costs and Other Operating Expenses (£m)(6) (9.6) (10.3) (8)%
Money Manager Costs increased by 22% to £(2.0)m (1H 2023: £(1.6)m), but at a
lower rate than the increase in Revenue growth of 41%, reflecting realised
cost efficiencies.(5)
Employee Benefits Expense costs were reduced by 6% to £(5.7)m (1H 2023:
£(6.1)m) through a strategic combination of workforce optimisation and the
deployment of automation technologies across various operational areas.
Headcount figures over the first half of 2024 remained relatively unchanged.
Overall, our total workforce decreased to 195 as at 30 June 2024 from 209 at
the end of June 2023.(3)
Other Operating Expenses decreased by 11% to £(3.8)m (1H 2023: £(4.3)m),
through rigorous financial management and strategic resource allocation,
achieving cost reductions while preserving operational effectiveness. We have
continued to invest in enhancing our scalability with an emphasis on improving
our internal automation to support productivity, including the streamlining of
our provider processes. This is evidenced by an improvement in the Invested
Customers per Staff Member metric from 1,026 in the first half of 2023 to
1,264 within the same period this year, representing a 23% increase in
productivity (1H 2023: 12%).(4)
Profitability Metrics
As at period End
Jun-2024 Jun-2023 YoY
Adjusted EBITDA (£m)(7) (2.0) (7.9) 75%
Adjusted EBITDA Margin (% of Revenue)(7) (13)% (73)% +60ppt(8)
Profit/(Loss) before Tax (£m) (3.8) (9.2) 59%
Our primary profitability metric is Adjusted EBITDA, which captures
Advertising and Marketing Expenses, but excludes Share-based Payments and
Expansion Costs.(7)
As a result of strong Revenue growth, the effective deployment of our
discretionary marketing budget and continued strict cost control, we were able
to realise the benefits of operating leverage gained through the scalability
of our technology platform. We delivered a 60 percentage point improvement in
our Group Adjusted EBITDA Margin across the first half of this year to (13)%
(1H 2023: (73)%), with Group Adjusted EBITDA at £(2.0)m for the period (1H
2023: £(7.9)m).(7,8)
Having achieved positive Group Adjusted EBITDA for the second quarter of this
year, we are well placed to achieve our full year 2024 UK Adjusted EBITDA
profitability target.(7)
Profit/(Loss) before Tax narrowed to £(3.8)m for the first half of 2024 from
£(9.2)m in 1H 2023, reflecting our progress towards profitability and again
showcasing the operating leverage in our model whilst we continue to grow.
Other Costs
For the 6-month Period Ending
Jun-2024 Jun-2023 YoY
Share-based Payment (£m) (1.4) (1.1) 26%
Expansion Costs (£m) (0.2) - 100%
Profit/(Loss) before Tax (£m) (3.8) (9.2) 59%
Taxation (£m) 0.1 0.1 n/m
Basic Earnings per Share (1.64)p (4.06)p 60%
Share-based Payment costs remained stable during the period £(1.4)m (1H 2023:
£(1.1)m).
Expansion Costs relates to one-off expenses incurred in relation to expansion
into the United States of America of £(0.2)m (1H 2023: £nil).
Taxation included enhanced tax credits in relation to routine Research and
Development refunds of £0.1m (1H 2023: £0.1m). No deferred tax asset was
recognised for the carried forward losses.
Basic Earnings per Share
Basic (and Diluted) Earnings per Share was (1.64)p for 1H 2024 (1H 2023:
(4.06)p). This decreased in line with the change in Profit/(Loss) before Tax.
Christoph J. Martin
Chief Financial Officer
28 August 2024
Notes:
1. See Definitions section.
2. 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:
Aviva 82%, Scottish Widows 74%, Standard Life 68%, PensionBee 55%, Hargreaves
Lansdown 40%, Nutmeg 37%, AJ Bell 33%, Interactive Investor 11%.
3. Total workforce of 195 as of 30 June 2024 includes 188 UK employees
and 7 non-UK contracts, but excludes the four Non-Executive Directors. Total
workforce of 209 as of 30 June 2023 includes 205 UK employees and 4 non-UK
contracts, but excludes the four Non-Executive Directors.
4. The Invested Customer per Staff metric is calculated by dividing
the number of Invested Customers by the total workforce at the end of the
period.
5. Money Manager Costs are variable costs paid to PensionBee's money
managers.
6. Technology Platform Costs & Other Operating Expenses comprises
Employee Benefits Expense (excluding Share-based Payment) and Other Operating
Expenses.
7. PensionBee's Key Performance Indicators include alternative
performance measures ('APM's), in particular Adjusted Earnings Before
Interest, Taxes, Depreciation, Amortisation, Share-based payments and
Expansion Costs ('Adjusted EBITDA'). APMs are not defined by International
Financial Reporting Standards ('IFRS') and should be considered together with
the Group's IFRS measurements of performance. PensionBee believes APMs assist
in providing additional insight into the underlying performance of PensionBee
and aid comparability of information between reporting periods. A
reconciliation to the nearest IFRS number is provided in the Notes to the
Condensed Consolidated Financial Statements 'Alternative Performance
Measures'.
8. ppt is the absolute change in percentage points.
Responsibility Statement
We confirm that to the best of our knowledge:
● The condensed set of financial statements, prepared in accordance with IAS 34
'Interim Financial Reporting', give a true and fair view of the assets,
liabilities, financial position and profit or loss of the group and the
undertakings included in the consolidation taken as a whole as required by DTR
4.2.4R.
● The interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events and their impact during
the first six months and description of principal risks and uncertainties for
the remaining six months of the year).
● The interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and
changes therein).
By order of the Board.
Romi Savova
Chief Executive Officer
28 August 2024
By order of the Board.
Romi Savova
Chief Executive Officer
28 August 2024
By order of the Board.
Romi Savova
Chief Executive Officer
28 August 2024
Independent Review Report to PensionBee Group plc
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2024 which comprises the condensed consolidated statement of
comprehensive income, statement of financial position, the statement of
changes in equity, the statement of cash flows and related notes 1 to 16.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2024 is not prepared, in all
material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our Report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
4 Brindleyplace
Birmingham
B1 2HZ
28 August 2024
Condensed Consolidated Statement of Comprehensive Income
For the Period from 1 January 2024 to 30 June 2024
Unaudited Unaudited
six months to six months to
30 June 2024 30 June 2023
Note £ 000 £ 000
Revenue 5 15,367 10,868
Employee Benefits Expense (5,749) (6,090)
(excluding Share-based
Payment)
Share-based (1,431) (1,133)
Payment
Depreciation (142) (143)
Expense
Advertising and Marketing (5,848) (6,818)
Other (5,781) (5,875)
Expenses
Expansion (172) -
Costs
Operating Profit/(Loss) (3,756) (9,191)
Finance Income 18 -
Finance (14) (19)
Costs
Profit/(Loss) before Tax (3,752) (9,210)
Taxation 7 77 137
Profit/(Loss) for the Period (3,675) (9,073)
Total Comprehensive Profit/(Loss) for the Period wholly attributable to Equity (3,675) (9,073)
Holders of the Company
Earnings per Share (pence per Share)
Basic and (1.64) (4.06)
Diluted
( )
The above results were derived from continuing operations.
Notes 1 to 16 form an integral part of these Condensed Consolidated Financial
Statements.
Condensed Consolidated Statement of Financial Position
As at 30 June 2024
Unaudited Audited
30 June 2024 31 December 2023
Note £ 000 £ 000
Assets
Non-current Assets
Property, Plant and 279 305
Equipment
Right of Use 341 412
Assets
Financial Assets (Deposit) 137 147
Intangible Assets 183 -
940 864
Current Assets
Trade and Other 9 5,096 4,347
Receivables
Cash and Cash Equivalents 10,913 12,214
16,009 16,561
Total Assets 16,949 17,425
Equity and Liabilities
Equity
Share 10 225 224
Capital
Share 53,218 53,218
Premium
Share-based Payment 13,828 12,397
Reserve
Retained Earnings (54,369) (50,694)
Total Equity 12,902 15,145
Non-current Liabilities
Lease 211 292
Liability
Provisions 51 49
262 341
Current Liabilities
Lease Liability 105 106
Trade and Other Payables 11 3,680 1,833
3,785 1,939
Total Liabilities 4,047 2,280
Total Equity and Liabilities 16,949 17,425
Notes 1 to 16 form an integral part of these Condensed Consolidated Financial
Statements.
Approved by the Board on 28 August 2024 and signed on its behalf by:
Christoph J. Martin
Chief Financial Officer
Condensed Consolidated Statement of Changes in Equity
For the Period from 1 January 2024 to 30 June 2024
Share Capital Share Premium Share-based Payment Reserve Retained Earnings Total
£ 000 £ 000 £ 000 £ 000 £ 000
At 1 January 2023 223 53,218 10,215 (40,124) 23,532
Profit/(Loss) for the Period - - - (9,073) (9,073)
Total Comprehensive Profit/(Loss) - - - (9,073) (9,073)
Share-based Payment Transactions - - 1,133 - 1,133
At 30 June 2023 (unaudited) 223 53,218 11,348 (49,197) 15,592
At 1 January 2024 224 53,218 12,397 (50,694) 15,145
Profit/(Loss) for the Period - - - (3,675) (3,675)
Total Comprehensive Profit/(Loss) - - - (3,675) (3,675)
Share-based Payment Transactions - - 1,431 - 1,431
Exercise of Share Options 1 - - - 1
At 30 June 2024 (unaudited) 225 53,218 13,828 (54,369) 12,902
Notes 1 to 16 form an integral part of these Condensed Consolidated Financial
Statements
.
Condensed Consolidated Statement of Cash Flows
For the Period from 1 January 2024 to 30 June 2024
Unaudited Unaudited
six months to six months to
30 June 2024 30 June 2023
Note £ 000 £ 000
Cash Flows used in Operating Activities
Profit/(Loss) for the (3,675) (9,073)
Period
Adjustments to Cash Flows from Non-Cash
Items
Depreciation 142 143
Finance Costs 14 19
Share-based Payment 1,431 1,133
Transactions
Taxation 7 (77) (137)
Operating Cash Flow before movements in Working Capital (2,165) (7,915)
Working Capital
Adjustments
Increase in Trade and Other Receivables 9 (661) (1,485)
Increase in Trade and Other Payables 11 1,846 2,008
Cash used in Operations (980) (7,392)
Taxes Received - 348
Net Cash Flow Used in Operating Activities (980) (7,044)
Cash Flows used in Investing Activities
Acquisition of Equipment (45) (23)
Acquisition and Development of Intangible Asset (183) -
Net Cash Flow used in Investing Activities (228) (23)
Cash Flows used in Financing Activities
Payment of Principal and Interest of Lease Liabilities (93) (93)
Net Cash Flows used in Financing Activities (93) (93)
Net Decrease in Cash and Cash Equivalents (1,301) (7,160)
Cash and Cash Equivalents at 1 January 12,214 21,321
Cash and Cash Equivalents at 30 June 10,913 14,161
Notes 1 to 16 form an integral part of these Condensed Consolidated Financial
Statements.
Notes to the Condensed Consolidated Financial Statements
For the Period from 1 January 2024 to 30 June 2024
1. Corporate Information
The Condensed Consolidated Financial Statements of PensionBee Group plc (the
'Company') and its subsidiaries (together the 'Group') for the six months
ended 30 June 2024 were authorised for issue in accordance with a resolution
of the Directors on 28 August 2024.
PensionBee Group plc is a public limited company, whose shares are listed on
the London Stock Exchange ('LSE'), incorporated and domiciled in England and
Wales.
The address of its registered office is:
209 Blackfriars Road
London
SE1 8NL
United Kingdom
Principal Activity
The principal activity of the Group is that of a direct-to-consumer online
pension provider. The Group seeks to make its customers 'Pension Confident' by
giving them complete control and clarity over their retirement savings. The
Group helps its customers to combine their pensions into one new online plan
where they can contribute, forecast outcomes, invest effectively, and withdraw
their pensions, all from the palm of their hand.
2. Accounting Policies
Basis of Preparation
The Annual Financial Statements of PensionBee Group plc will be prepared in
accordance with United Kingdom adopted International Financial Reporting
Standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34 'Interim Financial
Reporting'. The Group has prepared the Condensed Consolidated Financial
Statements on the basis that it will continue to operate as a going concern.
The Directors consider that there are no material uncertainties that may cast
significant doubt over this assumption. The Directors are satisfied that the
Group has sufficient resources to continue in operation for the foreseeable
future, a period of not less than 12 months from the date of this report.
The Condensed Consolidated Financial Statements do not include all the
information and disclosures required in the Annual Financial Statements, and
should be read in conjunction with PensionBee Group's Annual Report and
Financial Statements 2023.
Summary of Accounting Policies
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been consistently
applied to all the years presented and the interim period policies
consistently comply with International Accounting Standard 34 'Interim
Financial Reporting', unless otherwise stated.
Audit Requirements
The financial information for the six months ended 30 June 2024 has not been
audited by Deloitte LLP and accordingly no opinion has been given. The
comparative financial information for the year ended 31 December 2023 has been
extracted from the Annual Report and Financial Statements 2023. The financial
information contained in this Interim Report does not constitute statutory
accounts as defined in section 435 of the Companies Act 2006 and does not
reflect all of the information contained in PensionBee Group plc's Annual
Report and Financial Statements 2023. The Annual Financial Statements for the
year ended 31 December 2023, which were approved by the Board of Directors on
13 March 2024, received an unqualified audit report, did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006 and have been
filed with the Registrar of Companies.
Changes in Accounting Policy
None of the standards, interpretations and amendments effective for the first
time from 1 January 2024 have had a material effect on the Condensed
Consolidated Financial Statements.
Foreign Currency Translation
Functional and presentation currency
The Condensed Consolidated Financial Statements are presented in the Company's
functional currency Sterling.
Foreign currency transactions and balances
The Group applies IAS 21, The Effects of Changes in Foreign Exchange Rates.
Transactions in foreign currencies are translated into Sterling at the
exchange rate on the date of the transaction. Foreign currency monetary
balances are translated into Sterling at the period end exchange rates.
Exchange gains and losses on such balances are taken to the Condensed
Consolidated Statement of Comprehensive Income and recognised in the currency
translation reserve in equity. Non-monetary foreign currency balances are
translated at historical transaction-date exchange rates.
Foreign operations
For the purpose of presenting the Condensed Consolidated Financial Statements,
the results and financial position of foreign operations (none of which has
the currency of a hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
● assets and liabilities for each statement of financial position presented are
translated at the closing rate at the date of that statement of financial
position
● income and expenses for each statement of comprehensive income are translated
at average exchange rates (unless this is not a reasonable approximation of
the cumulative effect of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the dates of the
transactions), and
All resulting exchange differences are recognised in the statement of
comprehensive income and accumulated in a foreign currency translation
reserve.
3. Critical Accounting Judgements and Key Sources of Estimation
Uncertainty
In the application of the Group's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised where
the revision affects only that period, or in the period of the revision and
future periods where the revision affects both current and future periods.
The Group does not have any critical accounting judgements or key estimation
uncertainties.
4. Business Combinations
On 21 March 2024, PensionBee Group plc incorporated a new wholly owned
subsidiary PensionBee Inc. in Delaware, USA with operational headquarters in
New York. The incorporation of this subsidiary is part of the Group's
strategic initiative to expand its operations in the North American market.
5. Revenue
The analysis of the Group's Revenue for the period from continuing operations
is as follows:
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023
£ 000 £ 000
Recurring Revenue 15,227 10,825
Other Revenue 140 43
15,367 10,868
All Revenue generated was derived from operations within the United Kingdom.
6. Segment Information
Operating segments and reporting segments are reported in a manner consistent
with the internal reporting provided to the Chief Operating Decision Maker
('CODM'). The Group considers that the role of CODM is performed by the Board
of Directors. The CODM regularly reviews the Group's operating results to
assess performance and to allocate resources. All earnings, balance sheet and
cash flow information received and reviewed by the Board of Directors is
prepared at a company level. The CODM considers that it has a single business
unit comprising the provision of direct-to-consumer online pension
consolidation. The Group operates in two geographical locations; the United
Kingdom and the United States of America, therefore, the CODM recognises two
operating and reporting segments. For the six months to 30 June 2024, all the
Revenue is attributable to the United Kingdom segment. £3,493,000 of Losses
before Tax is attributable to the United Kingdom and £182,000 is attributable
to the United States of America. Net Assets of £12,926,000 are attributable
to the United Kingdom segment and £24,000 to the United States of America
segment. The United States of America segment was immaterial for the period
ended 30 June 2024 therefore, comprehensive segmental reporting has not been
provided. As this segment becomes operational, comprehensive segmental
reporting will be disclosed.
7. Tax
Tax credited in the Condensed Consolidated Statement of Comprehensive Income:
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023
£ 000 £ 000
Current Taxation
UK Corporation Tax 77 137
Tax Credit in the Condensed Consolidated Statement of Comprehensive Income 77 137
The Tax Credit in the Condensed Consolidated Statement of Comprehensive Income
relates solely to enhanced tax credits in relation to Research and
Development.
8. Earnings per Share
Basic Earnings per Share is calculated by dividing the loss attributable to
ordinary equity holders of the Company by the weighted average number of
ordinary shares in issue during the period.
Diluted Earnings per Share is calculated by dividing the Loss Attributable to
Ordinary Equity Holders of the Company by the Weighted Average Number of
ordinary shares in issue during the period. The weighted average number of
ordinary shares in issue during the period has not been adjusted for the
effect of the weighted average number of shares that would be issued on the
conversion of all the potential ordinary shares under option and conditional
share awards because the potential ordinary shares are anti-dilutive. At each
balance sheet date reported below, the following potential ordinary shares
under option and conditional share awards are anti-dilutive and are therefore
excluded from the weighted average number of ordinary shares for the purpose
of Diluted Earnings per Share.
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023
Number of Potential Ordinary Shares 10,132,964 6,778,659
Loss Attributable to Ordinary Equity Holders of the Company (£) (3,675,000) (9,073,000)
Weighted Average Number of Shares Outstanding during the Period 224,100,045 223,203,539
Basic and Diluted Earnings/(Loss) per Share (pence per Share) (1.64) (4.06)
9. Trade and Other Receivables
Unaudited six months to 30 June 2024 Audited 31 December 2023
£ 000 £ 000
Trade Receivables 2,579 1,859
Prepayments 2,202 2,167
Other Receivables 315 536
5,096 4,562
10. Share Capital
Allotted, Called Up and Fully Paid Shares
Unaudited 30 June 2024 Audited 31 December 2023
No. 000 £ 000 No. 000 £ 000
Ordinary of £0.001 each 224,772 225 223,963 224
224,772 225 223,963 224
11. Trade and Other Payables
Unaudited six months to 30 June 2024 Audited 31 December 2023
£ 000 £ 000
Trade Payables 474 269
Accrued Expenses 2,752 1,496
Other Payables 454 68
3,680 1,833
12. Financial Assets and Financial Liabilities
The carrying value of the financial assets and liabilities are not materially
different from their fair value.
13. Share-based Payment
PensionBee EMI and Non-EMI Share Option Scheme
Scheme Details and Movements
Under the PensionBee EMI and Non-EMI Share Option Scheme, share options were
granted to eligible employees who had passed their probation period at the
Group. The exercise price of all share options is £0.001 per share.
The share options normally vest in the following tranches: 25% of the shares
vest on the first anniversary of the vesting commencement date, with the
remaining 75% of the shares vesting quarterly in equal instalments over the
following three years.
The fair value of the share options granted is estimated on the date of grant
by reference to the prevailing share price. Before the Company was listed in
2021, the fair value was determined by reference to the price paid by external
investors as part of periodic funding rounds.
Under this scheme, no share options were granted during the six months ended
30 June 2024 (30 June 2023: nil).
Total number of share options exercised during the six months ended 30 June
2024 was 552,420 (30 June 2023: 803,368) and the weighted average remaining
contractual life is three months (30 June 2023: one year).
Deferred Share Bonus Awards
Scheme Details and Movements
Under the PensionBee Omnibus Plan, Deferred Share Bonus Awards ('DSB Awards')
are granted to eligible employees who are, or were, an employee (including an
Executive Director) of the Group and have been granted a bonus. DSB Awards are
granted in the subsequent financial year following the determination of the
annual bonus outturn. The exercise price of all DSB Awards is £0.001 per
share.
For the two Executive Directors that were in office as at 31 December 2021,
their 2022 granted DSB Awards cliff vest on the third anniversary of the date
of grant. For the rest of the employees and the subsequent grants, DSB Awards
vest in three equal tranches over a service period of three years from grant
date. DSB Awards vest upon satisfying the service condition.
The fair value of the DSB Awards is the share price on grant date. DSB Awards
granted by way of share option can be exercised to the extent they have
vested. DSB Awards granted by way of conditional share awards will
automatically be released upon vesting.
1,582,724 DSB Awards were granted during the six months ended 30 June 2024 (30
June 2023: 626,223). The weighted average fair value of DSB Awards granted
during the six months ended 30 June 2024 was £0.97 (30 June 2023: £0.98).
Total number of DSB Awards exercised during the six months ended 30 June 2024
was 334,206 (30 June 2023: 186,806) and the weighted average remaining
contractual life is ten months (30 June 2023: one year and five months).
Long Term Incentives
Scheme Details and Movements
Under the PensionBee Omnibus Plan, Long Term Incentives in the form of
Restricted Share Plan Awards ('RSP Awards') are granted to eligible employees
who are, or were, employees (including an Executive Director) of the Group, at
mid-level management or higher, and have been granted a bonus. RSP Awards are
granted in the subsequent year following a bonus grant. The exercise price of
all RSP Awards is £0.001 per share.
The RSP Awards vest in tranches, a third of the RSP Awards vest on the third
anniversary, a third on the fourth anniversary and the last third on the fifth
anniversary of the vesting commencement date.
The fair value of the RSP Awards is the share price on grant date discounted
for restricted selling period. RSP Awards can be exercised to the extent they
have vested and after a five year holding period. RSP Awards granted by way of
conditional share awards will be released after the five year holding period.
2,803,728 RSP Awards were granted during the six months ended 30 June 2024 (30
June 2023: 2,791,756). The weighted average fair value of RSP Awards granted
during the six months ended 30 June 2024 was £0.93 (30 June 2023: £0.94).
Total number of RSP Awards exercised during the six months ended 30 June 2024
was nil (30 June 2023: nil) and the weighted average remaining contractual
life is two years and five months (30 June 2023: three years and five months).
Charge/Credit arising from Share-based Payment
The total charge during the six months ended 30 June 2024 for the Share-based
Payment was £1,431,000 (30 June 2023: £1,133,000), all of which related to
equity-settled share-based payment transactions.
14. Principal Risks and Uncertainties
The Board continually reviews the principal risks and uncertainties facing the
Group that could pose a threat to the delivery of the strategic objectives.
The Board believes that the nature of the principal risks and uncertainties
that may have a material effect on the Group's performance over the remainder
of the financial year remain unchanged from those presented within the Annual
Report and Financial Statements 2023.
15. Related Party Transactions
Related Party - PensionBee Trustees Limited
The following related party transactions occurred between PensionBee and
PensionBee Trustees Limited:
(i) Payment of the PensionBee Trustees Limited bank fees on a quarterly basis.
During the six months to 30 June 2024bank fees amounted to £109,000 (30 June
2023: £73,500). There was no outstanding balance as at 30 June 2024 (30 June
2023: £nil).
(ii) Payment of the PensionBee Trustees Limited's Data Protection fee on an annual
basis. During the six months to 30 June 2024payments amounted to £35 (30 June
2023: £35). There was no outstanding balance as at 30 June 2024 (30 June
2023: £nil).
Transactions with Directors
There were no transactions with Directors during the six months ended 30 June
2024 (30 June 2023: £nil).
16. Events After the Reporting Period
There were no events of material impact to the financial statements that
occurred after the reporting date.
17. Alternative Performance Measures
The Group uses a variety of alternative performance measures ('APM's') which
are not defined or specified by IFRS, in particular Adjusted Earnings Before
Interest, Taxes, Depreciation and Amortisation ('EBITDA'). The Directors use a
combination of APMs and IFRS measures when reviewing the performance and
position of the Group and believe that each of these measures provides useful
information with respect to the Group's business and operations. The Directors
consider that these APMs illustrate the underlying performance of the business
by excluding items considered by management not to be reflective of the
underlying trading operations of the Group.
The APMs used by the Group are defined below and reconciled to the related
IFRS financial measures:
Adjusted EBITDA
Adjusted EBITDA represents loss for the period before Taxation, Finance Costs,
Depreciation, Amortisation, Share-based Payment and Expansion Costs.
Unaudited Unaudited
six months to six months to
30 June 2024 30 June 2023
£ 000 £ 000
Operating Loss (3,756) (9,191)
Depreciation 142 143
Share-based Payment(1) 1,431 1,133
Expansion Costs(2) 172 -
Adjusted EBITDA (2,010) (7,916)
Notes:
1. Relates to the total annual charge in relation to the Share-based
Payment expense as detailed in Note 13 to the Condensed Consolidated Financial
Statements.
2. Relates to one-off expenses incurred in relation to expansion into the
United States of America.
Definitions
Group Financial Performance Measures
Revenue 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.
Adjusted EBITDA* Adjusted EBITDA is the Operating Profit or Loss Before Taxation, Finance
costs, Depreciation, Amortisation, Share-based payments and Expansion Costs.
This measure is a proxy for operating cash flow.
Adjusted EBITDA Margin* Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of Revenue for
the relevant period.
Profit/(Loss) before Tax ('PBT') Profit/(Loss) before Tax is a measure that looks at PensionBee's profit or
losses before it has paid corporate income tax.
Basic Earnings per Share ('EPS') Basic Earnings per Share is calculated by dividing the profit or loss
attributable to ordinary equity holders of the Group by the weighted average
number of ordinary shares in issue during the period.
* PensionBee's Key Performance Indicators include alternative performance
measures ('APM's), in particular Adjusted Earnings Before Interest, Taxes,
Depreciation, Amortisation, Share-based payments and Expansion Costs.
('Adjusted EBITDA'). APMs are not defined by International Financial Reporting
Standards ('IFRS') and should be considered together with the Group's IFRS
measurements of performance. PensionBee believes APMs assist in providing
additional insight into the underlying performance of PensionBee and aid
comparability of information between reporting periods. A reconciliation to
the nearest IFRS number is provided in the Notes to the Condensed Consolidated
Financial Statements 'Alternative Performance Measures'.
Group Non-Financial Performance Measures
Assets under Administration ('AUA') Assets under Administration is the total invested value of pension assets
within PensionBee's Invested Customers' pensions. It measures the new inflows
less the outflows and records a change in the market value of the assets. This
KPI has been selected because AUA is a measurement of the growth of the
business and is the primary driver of Revenue.
AUA Retention Rate (% of AUA) AUA Retention measures the percentage of retained PensionBee AUA from
transfers out 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.
Net Flows Net Flows measures the cumulative inflow of PensionBee AUA from consolidation
and contribution ('Gross Inflows'), less the outflows from withdrawals and
transfers out ('Gross Outflows') over the relevant period.
Invested Customers ('IC') Invested Customers means those customers who have transferred pension assets
or made contributions into one of PensionBee's investment plans.
Customer Retention Rate (% of IC) 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.
Cost per Invested Customer ('CPIC') Cost per Invested Customer means the cumulative advertising and marketing
costs incurred since PensionBee commenced operations 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.
Revenue Margin (% of AUA) Revenue Margin expresses the Recurring Revenue over the average quarterly AUA
held in PensionBee's investment plans over the period.
Company Information
PensionBee Executive Directors
Romi Savova (Chief Executive Officer)
Jonathan Lister Parsons (Chief Technology Officer)
Christoph J. Martin (Chief Financial Officer)
PensionBee Non-Executive Directors
Mark Wood CBE (Non-Executive Chair)
Mary Francis CBE (Senior Independent Non-Executive Director)
Michelle Cracknell CBE (Independent Non-Executive Director)
Lara Oyesanya FRSA (Independent Non-Executive Director)
Company Secretary
Michael Tavener
Registered Number
13172844
Registered Office
209 Blackfriars Road
London SE1 8NL
United Kingdom
Auditor
Deloitte LLP
4Brindley Place
Birmingham
B1 2HZ
United Kingdom
All resulting exchange differences are recognised in the statement of
comprehensive income and accumulated in a foreign currency translation
reserve.
3. Critical Accounting Judgements and Key Sources of Estimation
Uncertainty
In the application of the Group's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amount of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual
results may differ from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised where
the revision affects only that period, or in the period of the revision and
future periods where the revision affects both current and future periods.
The Group does not have any critical accounting judgements or key estimation
uncertainties.
4. Business Combinations
On 21 March 2024, PensionBee Group plc incorporated a new wholly owned
subsidiary PensionBee Inc. in Delaware, USA with operational headquarters in
New York. The incorporation of this subsidiary is part of the Group's
strategic initiative to expand its operations in the North American market.
5. Revenue
The analysis of the Group's Revenue for the period from continuing operations
is as follows:
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023
£ 000 £ 000
Recurring Revenue 15,227 10,825
Other Revenue 140 43
15,367 10,868
All Revenue generated was derived from operations within the United Kingdom.
6. Segment Information
Operating segments and reporting segments are reported in a manner consistent
with the internal reporting provided to the Chief Operating Decision Maker
('CODM'). The Group considers that the role of CODM is performed by the Board
of Directors. The CODM regularly reviews the Group's operating results to
assess performance and to allocate resources. All earnings, balance sheet and
cash flow information received and reviewed by the Board of Directors is
prepared at a company level. The CODM considers that it has a single business
unit comprising the provision of direct-to-consumer online pension
consolidation. The Group operates in two geographical locations; the United
Kingdom and the United States of America, therefore, the CODM recognises two
operating and reporting segments. For the six months to 30 June 2024, all the
Revenue is attributable to the United Kingdom segment. £3,493,000 of Losses
before Tax is attributable to the United Kingdom and £182,000 is attributable
to the United States of America. Net Assets of £12,926,000 are attributable
to the United Kingdom segment and £24,000 to the United States of America
segment. The United States of America segment was immaterial for the period
ended 30 June 2024 therefore, comprehensive segmental reporting has not been
provided. As this segment becomes operational, comprehensive segmental
reporting will be disclosed.
7. Tax
Tax credited in the Condensed Consolidated Statement of Comprehensive Income:
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023
£ 000 £ 000
Current Taxation
UK Corporation Tax 77 137
Tax Credit in the Condensed Consolidated Statement of Comprehensive Income 77 137
The Tax Credit in the Condensed Consolidated Statement of Comprehensive Income
relates solely to enhanced tax credits in relation to Research and
Development.
8. Earnings per Share
Basic Earnings per Share is calculated by dividing the loss attributable to
ordinary equity holders of the Company by the weighted average number of
ordinary shares in issue during the period.
Diluted Earnings per Share is calculated by dividing the Loss Attributable to
Ordinary Equity Holders of the Company by the Weighted Average Number of
ordinary shares in issue during the period. The weighted average number of
ordinary shares in issue during the period has not been adjusted for the
effect of the weighted average number of shares that would be issued on the
conversion of all the potential ordinary shares under option and conditional
share awards because the potential ordinary shares are anti-dilutive. At each
balance sheet date reported below, the following potential ordinary shares
under option and conditional share awards are anti-dilutive and are therefore
excluded from the weighted average number of ordinary shares for the purpose
of Diluted Earnings per Share.
Unaudited six months to 30 June 2024 Unaudited six months to 30 June 2023
Number of Potential Ordinary Shares 10,132,964 6,778,659
Loss Attributable to Ordinary Equity Holders of the Company (£) (3,675,000) (9,073,000)
Weighted Average Number of Shares Outstanding during the Period 224,100,045 223,203,539
Basic and Diluted Earnings/(Loss) per Share (pence per Share) (1.64) (4.06)
9. Trade and Other Receivables
Unaudited six months to 30 June 2024 Audited 31 December 2023
£ 000 £ 000
Trade Receivables 2,579 1,859
Prepayments 2,202 2,167
Other Receivables 315 536
5,096 4,562
10. Share Capital
Allotted, Called Up and Fully Paid Shares
Unaudited 30 June 2024 Audited 31 December 2023
No. 000 £ 000 No. 000 £ 000
Ordinary of £0.001 each 224,772 225 223,963 224
224,772 225 223,963 224
11. Trade and Other Payables
Unaudited six months to 30 June 2024 Audited 31 December 2023
£ 000 £ 000
Trade Payables 474 269
Accrued Expenses 2,752 1,496
Other Payables 454 68
3,680 1,833
12. Financial Assets and Financial Liabilities
The carrying value of the financial assets and liabilities are not materially
different from their fair value.
13. Share-based Payment
PensionBee EMI and Non-EMI Share Option Scheme
Scheme Details and Movements
Under the PensionBee EMI and Non-EMI Share Option Scheme, share options were
granted to eligible employees who had passed their probation period at the
Group. The exercise price of all share options is £0.001 per share.
The share options normally vest in the following tranches: 25% of the shares
vest on the first anniversary of the vesting commencement date, with the
remaining 75% of the shares vesting quarterly in equal instalments over the
following three years.
The fair value of the share options granted is estimated on the date of grant
by reference to the prevailing share price. Before the Company was listed in
2021, the fair value was determined by reference to the price paid by external
investors as part of periodic funding rounds.
Under this scheme, no share options were granted during the six months ended
30 June 2024 (30 June 2023: nil).
Total number of share options exercised during the six months ended 30 June
2024 was 552,420 (30 June 2023: 803,368) and the weighted average remaining
contractual life is three months (30 June 2023: one year).
Deferred Share Bonus Awards
Scheme Details and Movements
Under the PensionBee Omnibus Plan, Deferred Share Bonus Awards ('DSB Awards')
are granted to eligible employees who are, or were, an employee (including an
Executive Director) of the Group and have been granted a bonus. DSB Awards are
granted in the subsequent financial year following the determination of the
annual bonus outturn. The exercise price of all DSB Awards is £0.001 per
share.
For the two Executive Directors that were in office as at 31 December 2021,
their 2022 granted DSB Awards cliff vest on the third anniversary of the date
of grant. For the rest of the employees and the subsequent grants, DSB Awards
vest in three equal tranches over a service period of three years from grant
date. DSB Awards vest upon satisfying the service condition.
The fair value of the DSB Awards is the share price on grant date. DSB Awards
granted by way of share option can be exercised to the extent they have
vested. DSB Awards granted by way of conditional share awards will
automatically be released upon vesting.
1,582,724 DSB Awards were granted during the six months ended 30 June 2024 (30
June 2023: 626,223). The weighted average fair value of DSB Awards granted
during the six months ended 30 June 2024 was £0.97 (30 June 2023: £0.98).
Total number of DSB Awards exercised during the six months ended 30 June 2024
was 334,206 (30 June 2023: 186,806) and the weighted average remaining
contractual life is ten months (30 June 2023: one year and five months).
Long Term Incentives
Scheme Details and Movements
Under the PensionBee Omnibus Plan, Long Term Incentives in the form of
Restricted Share Plan Awards ('RSP Awards') are granted to eligible employees
who are, or were, employees (including an Executive Director) of the Group, at
mid-level management or higher, and have been granted a bonus. RSP Awards are
granted in the subsequent year following a bonus grant. The exercise price of
all RSP Awards is £0.001 per share.
The RSP Awards vest in tranches, a third of the RSP Awards vest on the third
anniversary, a third on the fourth anniversary and the last third on the fifth
anniversary of the vesting commencement date.
The fair value of the RSP Awards is the share price on grant date discounted
for restricted selling period. RSP Awards can be exercised to the extent they
have vested and after a five year holding period. RSP Awards granted by way of
conditional share awards will be released after the five year holding period.
2,803,728 RSP Awards were granted during the six months ended 30 June 2024 (30
June 2023: 2,791,756). The weighted average fair value of RSP Awards granted
during the six months ended 30 June 2024 was £0.93 (30 June 2023: £0.94).
Total number of RSP Awards exercised during the six months ended 30 June 2024
was nil (30 June 2023: nil) and the weighted average remaining contractual
life is two years and five months (30 June 2023: three years and five months).
Charge/Credit arising from Share-based Payment
The total charge during the six months ended 30 June 2024 for the Share-based
Payment was £1,431,000 (30 June 2023: £1,133,000), all of which related to
equity-settled share-based payment transactions.
14. Principal Risks and Uncertainties
The Board continually reviews the principal risks and uncertainties facing the
Group that could pose a threat to the delivery of the strategic objectives.
The Board believes that the nature of the principal risks and uncertainties
that may have a material effect on the Group's performance over the remainder
of the financial year remain unchanged from those presented within the Annual
Report and Financial Statements 2023.
15. Related Party Transactions
Related Party - PensionBee Trustees Limited
The following related party transactions occurred between PensionBee and
PensionBee Trustees Limited:
(i) Payment of the PensionBee Trustees Limited bank fees on a quarterly basis.
During the six months to 30 June 2024bank fees amounted to £109,000 (30 June
2023: £73,500). There was no outstanding balance as at 30 June 2024 (30 June
2023: £nil).
(ii) Payment of the PensionBee Trustees Limited's Data Protection fee on an annual
basis. During the six months to 30 June 2024payments amounted to £35 (30 June
2023: £35). There was no outstanding balance as at 30 June 2024 (30 June
2023: £nil).
Transactions with Directors
There were no transactions with Directors during the six months ended 30 June
2024 (30 June 2023: £nil).
16. Events After the Reporting Period
There were no events of material impact to the financial statements that
occurred after the reporting date.
17. Alternative Performance Measures
The Group uses a variety of alternative performance measures ('APM's') which
are not defined or specified by IFRS, in particular Adjusted Earnings Before
Interest, Taxes, Depreciation and Amortisation ('EBITDA'). The Directors use a
combination of APMs and IFRS measures when reviewing the performance and
position of the Group and believe that each of these measures provides useful
information with respect to the Group's business and operations. The Directors
consider that these APMs illustrate the underlying performance of the business
by excluding items considered by management not to be reflective of the
underlying trading operations of the Group.
The APMs used by the Group are defined below and reconciled to the related
IFRS financial measures:
Adjusted EBITDA
Adjusted EBITDA represents loss for the period before Taxation, Finance Costs,
Depreciation, Amortisation, Share-based Payment and Expansion Costs.
Unaudited Unaudited
six months to six months to
30 June 2024 30 June 2023
£ 000 £ 000
Operating Loss (3,756) (9,191)
Depreciation 142 143
Share-based Payment(1) 1,431 1,133
Expansion Costs(2) 172 -
Adjusted EBITDA (2,010) (7,916)
Notes:
1. Relates to the total annual charge in relation to the Share-based
Payment expense as detailed in Note 13 to the Condensed Consolidated Financial
Statements.
2. Relates to one-off expenses incurred in relation to expansion into the
United States of America.
Definitions
Group Financial Performance Measures
Revenue 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.
Adjusted EBITDA* Adjusted EBITDA is the Operating Profit or Loss Before Taxation, Finance
costs, Depreciation, Amortisation, Share-based payments and Expansion Costs.
This measure is a proxy for operating cash flow.
Adjusted EBITDA Margin* Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of Revenue for
the relevant period.
Profit/(Loss) before Tax ('PBT') Profit/(Loss) before Tax is a measure that looks at PensionBee's profit or
losses before it has paid corporate income tax.
Basic Earnings per Share ('EPS') Basic Earnings per Share is calculated by dividing the profit or loss
attributable to ordinary equity holders of the Group by the weighted average
number of ordinary shares in issue during the period.
* PensionBee's Key Performance Indicators include alternative performance
measures ('APM's), in particular Adjusted Earnings Before Interest, Taxes,
Depreciation, Amortisation, Share-based payments and Expansion Costs.
('Adjusted EBITDA'). APMs are not defined by International Financial Reporting
Standards ('IFRS') and should be considered together with the Group's IFRS
measurements of performance. PensionBee believes APMs assist in providing
additional insight into the underlying performance of PensionBee and aid
comparability of information between reporting periods. A reconciliation to
the nearest IFRS number is provided in the Notes to the Condensed Consolidated
Financial Statements 'Alternative Performance Measures'.
Group Non-Financial Performance Measures
Assets under Administration ('AUA') Assets under Administration is the total invested value of pension assets
within PensionBee's Invested Customers' pensions. It measures the new inflows
less the outflows and records a change in the market value of the assets. This
KPI has been selected because AUA is a measurement of the growth of the
business and is the primary driver of Revenue.
AUA Retention Rate (% of AUA) AUA Retention measures the percentage of retained PensionBee AUA from
transfers out 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.
Net Flows Net Flows measures the cumulative inflow of PensionBee AUA from consolidation
and contribution ('Gross Inflows'), less the outflows from withdrawals and
transfers out ('Gross Outflows') over the relevant period.
Invested Customers ('IC') Invested Customers means those customers who have transferred pension assets
or made contributions into one of PensionBee's investment plans.
Customer Retention Rate (% of IC) 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.
Cost per Invested Customer ('CPIC') Cost per Invested Customer means the cumulative advertising and marketing
costs incurred since PensionBee commenced operations 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.
Revenue Margin (% of AUA) Revenue Margin expresses the Recurring Revenue over the average quarterly AUA
held in PensionBee's investment plans over the period.
Company Information
PensionBee Executive Directors
Romi Savova (Chief Executive Officer)
Jonathan Lister Parsons (Chief Technology Officer)
Christoph J. Martin (Chief Financial Officer)
PensionBee Non-Executive Directors
Mark Wood CBE (Non-Executive Chair)
Mary Francis CBE (Senior Independent Non-Executive Director)
Michelle Cracknell CBE (Independent Non-Executive Director)
Lara Oyesanya FRSA (Independent Non-Executive Director)
Company Secretary
Michael Tavener
Registered Number
13172844
Registered Office
209 Blackfriars Road
London SE1 8NL
United Kingdom
Auditor
Deloitte LLP
4 Brindley Place
Birmingham
B1 2HZ
United Kingdom
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