PensionBee eyes profits next year after boom in customers
Pensions fintech PensionBee said it was on track to hit profitability by the end of 2023 today as it revealed it had boosted its invested customer base by 72 per cent on last year.
In a trading update on the first half of the year this morning, the London-listed firm said invested customers rose to 159,00, up from 92,000 at the same time last year, on the back of a major marketing push.
Assets under administration also jumped 35 per cent year on year to £2.68bn, as strong net flows from its customer base offset the turbulence that has rocked markets in the first half of 2022. Annual run rate revenue increased by 37 per cent to £17m (June 2021: £12m)
Boss Romi Savova told City A.M. this morning the firm would be pushing ahead with “more of the same” as it chased a swing into the black.
“Despite everything that has been going on in the outside world, we’ve had really resilient assets, and really resilient revenues,” she told City A.M. in an interview.
“That has given us the confidence to reaffirm our objectives around profitability excluding marketing by the end of this year and then full profitability by the end of next year.”
Analysts at KBW said today that PensionBee’s focus on younger market – who have longer horizon on their savings – had paid dividends amidst market volatility, with savers less cautious about short term fluctuation in their pension pot.
“Volatile equity markets also create inertia in decision-making amongst those nearing retirement, so PensionBee has rather been focusing on marketing to younger cohorts for new business,” the analysts said.
“This has negatively hit the initial pension average pot size acquired, but not customer lifetime value, due to younger clients staying for a longer duration and likely also making future recurring contributions.The flip side of more volatile markets, positively, are lower levels of client withdrawals.”
The conversion rate of customers committing saving to PensionBee also edged up to 18 per cent from 17 per cent, Savova said, with the firm angling for a one in five conversion rate of its total registered customer base.
Shares in Pensionbee dipped around 1.5 per cent this morning. The firm has been caught in a wider sell-off of tech stocks as investors grow wary of growth-focused firms amid rising interest rates and a looming recession.
Shares in the the firm are trading down over 27 per cent over the past six months.