Online pension provider, PensionBee, has reported a big jump in losses for the first half of the year, so why do they still look so cheerful?
It was good news and bad news for online private pension provider PensionBee. On the downside, there was a 145% leap in pre-tax losses and a drop in its share price. On the plus side there was significant growth in revenue and in customers. Overall, they say, they are still on track to break even by the end of 2023.
PensionBee is one of a number of companies that have popped up over the past few years offering digital alternatives to financial services. They allow their customers to transfer, merge and manage pensions online.
Back in April PensionBee raised £55 million through an initial public offering with the promise that it was on the road to profitability by 2023. Since then, it’s been a mixed story of more growth, but greater losses. Since the enthusiasm of the PensionBee IPO, their share price has dipped 11%.
Nevertheless, the team remain upbeat. Chief Executive Romi Savova described its financial performance as strong and ‘in line with expectations.’ The firm would, she predicted ‘maintain our strong momentum, deliver high double-digit revenue growth for the current financial year 2021 and to reach monthly EBITDA [earnings before interest, taxes, depreciation, and amortisation] breakeven by the end of 2023’.
There is plenty to be excited about. Their customer base is up by 81% over the first six months of the year with registered clients hitting 538,000.
That growth is mirrored by the number of invested customers which rose to 92,000. The firm’s total level of assets under administration grew by 117% to a little less than £2bn.
PensionBee’s cash position is also looking better – growing to £6.7million from the end of 2020 to £55million.
Savova added: ‘
Our strategy of always putting the customer first continues to resonate with both new and existing customers as demonstrated by our strong growth in the invested customer base, AUA [assets under administration] and revenue, together with the maintenance of our industry-leading customer retention rates.”
Overall, then, the company still seems to be striking a note of cautious optimism. Like many new fintechs it’s taking time to hit profitability, but the goal remains the same from its IPO – to start making money from 2023 on.
Tom Cropper has been writing for us since 2015. Tom is a financial journalist and his work has appeared in titles such as the Guardian, Euromoney and many others.