TIDMPBEE
RNS Number : 1486T
PensionBee Group plc
16 March 2023
PensionBee Group plc
Incorporated in England and Wales
Registration Number: 13172844
LEI: 2138008663P5FHPGZV74
ISIN: GB00BNDRLN84
16 March 2023
PensionBee Group plc
Full Year Results for the year ended 31 December 2022
Strong Growth across all Key Metrics and on track for
achievement of Ongoing Adjusted EBITDA Profitability by the end of 2023
PensionBee Group plc ('PensionBee' or the 'Company'), a leading online pension provider, today
announces its audited full year results for the year ended 31 December 2022.
Highlights
-- Revenue increased by 38% to GBP17.7m (2021: GBP12.8m)
-- Adjusted EBITDA* of GBP(19.5)m (2021: GBP(16.4)m), reflecting continued investment in growth
-- Adjusted EBITDA Margin* of (110)% (2021: (129)%), demonstrating operating leverage
-- Profit/(Loss) before Tax of GBP(22.4)m (2021: GBP(25.0)m)
-- Basic Earnings per Share was (9.97)p (2021: (11.86)p)
-- Assets under Administration ('AUA') increased by 17% year on year to GBP3.0bn (2021: GBP2.6bn),
driven predominantly by strong net flows from new and existing customers
-- Invested Customer ('IC') base increased by 56% year on year to 183,000 (2021: 117,000), driven
by brand awareness of over 50%
-- Customer Retention Rate of 9 7% remained high (2021: 97%)
Romi Savova, Chief Executive Officer of PensionBee, commented:
"We are pleased to report strong full year results for 2022, having exceeded GBP3 billion
of Assets under Administration, despite the challenging global capital markets. PensionBee
has become a household brand name, synonymous with easy and effective pensions management
for consumers.
Throughout 2022, we focused on serving our customers through innovative product developments
and launches, supporting them through this uncertain economic environment. We look forward
to continuing to acquire market share and to achieving our objective of reaching 1 million
Invested Customers in the medium to long term. We expect to introduce some new, adjacent products
to enable our customers to prepare for a happy retirement.
Encouraged by strong year to date trading driven by customer growth and healthy net flows
from new and existing customers, we are on track to achieve our primary objective of ongoing
Adjusted EBITDA profitability by the end of 2023 and to become profitable for the full year
2024. We will achieve this by continuing to reduce the Cost per Invested Customer, delivering
innovative new features and making efficiency gains through our scalable technology platform."
Guidance and Outlook
With PensionBee having delivered against its primary growth objectives and financial guidance,
initially set out at the time of its IPO in April 2021, the Board's updated framework for
guidance confirms its short-term goals and sets out its expectations for the longer-term.
With respect to the longer-term, set against a backdrop of the substantial target market opportunity
in UK Defined Contribution pensions of approximately GBP700bn in assets, the Company is pursuing
a market share of approximately 2% over the next 5-10 years (equivalent to about 1m Invested
Customers, assuming an average pension pot size of GBP20,000- GBP25,000). With an expectation
of maintaining relative Revenue margin stability, this translates into a long-term annual
Revenue opportunity of approximately GBP150m. The Company expects to achieve long-term EBITDA
Margins of more than 50%, owing to the scalability of the technology platform.
In the short to medium term, the Company remains on track to achieve ongoing Adjusted EBITDA
profitability by the end of 2023 and to be profitable for the full year 2024, by reducing
the Cost per Invested Customer and delivering further automation through its scalable technology
platform.
Year-to-date trading has been strong, driven by net flows from new and existing customers.
Financial Highlights
As at Year End
Dec-2020 Dec-2021 Dec-2022 2021-22 YoY
========= ========= ========= =============
Revenue (GBPm) 6.3 12.8 17.7 38%
========= ========= ========= =============
Annual Run Rate Revenue (GBPm)* 8.9 16.3 19.5 20%
========= ========= ========= =============
Adjusted EBITDA (GBPm)* (10.4) (16.4) (19.5) -19%
========= ========= ========= =============
Adjusted EBITDA Margin (% of Revenue)* (166)% (129)% (110)% +18ppt
========= ========= ========= =============
Profit/(Loss) before Tax (GBPm) (13.5) (25.0) (22.4) 10%
========= ========= ========= =============
Profit/(Loss) before Tax Margin (% of Revenue) (215)% (196)% (127)% +69ppt
========= ========= ========= =============
Basic Earnings per Share (7.67)p (11.86)p (9.97)p 16%
========= ========= ========= =============
Non-Financial Highlights
As at Year End
Dec-2020 Dec-2021 Dec-2022 2021-22 YoY
========= ========= ========= =================
AUA (GBPm) 1,358 2,587 3,025 17%
========= ========= ========= =================
AUA Retention Rate (% of AUA) 96% 96% 97% +1ppt
========= ========= ========= =================
Invested Customers (thousands) 69 117 183 56%
========= ========= ========= =================
Customer Retention Rate (% of IC) 97% 97% 97% stable
========= ========= ========= =================
Cost per Invested Customer (GBP) 232 246 248 within threshold
========= ========= ========= =================
Realised Revenue Margin (% of AUA) 0.64% 0.64% 0.63% stable
========= ========= ========= =================
As at Year End
Dec-2020 Dec-2021 Dec-2022 2021-22 YoY
========= ========= ========= ============
Opening AUA (GBPm) 745 1,358 2,587 91%
========= ========= ========= ============
Gross Inflows 593 1,099 1,060 (4)%
========= ========= ========= ============
Gross Outflows (70) (145) (197) 36%
========= ========= ========= ============
Net Inflows 523 955 863 (10)%
========= ========= ========= ============
Market Growth and Other 90 275 (424) n/m
========= ========= ========= ============
Closing AUA 1,358 2,587 3,025 17%
========= ========= ========= ============
* PensionBee's Key Performance Indicators include alternative performance measures ('APMs')
which are indicated with an asterisk. 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 greater insight into the underlying
performance of PensionBee and enhance comparability of information between reporting periods.
ppt - A ppt is a percentage point. A percentage point is the unit for the arithmetic difference
of two percentages.
For definitions, see Managing our Performance section.
Enquiries:
Teneo
James Macey White pensionbee@teneo.com
Laura Marshall +44 (0)20 7353 4200
PensionBee
Rachael Oku press@pensionbee.com
Laura Dunn-Sims
Analyst Presentation
There will be a presentation for analysts at 8:30am via webcast. Please contact pensionbee@teneo.com
if you would like to attend.
The analyst presentation will be available on the Company's website (with a video recording
to follow) at:
https://www.pensionbee.com/investor-relations/results-and-reports.
Investor Presentation
There will be a presentation for investors on Friday 17 March 2023 at 11.00am via webcast.
To register, please go to: https://www.equitydevelopment.co.uk/news-and-events/pensionbee-fypresentation-17march2023
About PensionBee
PensionBee is a leading online pension provider, making pension management easy for its customers
while they save for a happy retirement.
PensionBee helps its customers combine their old pension pots, make flexible contributions,
invest in line with their goals and values and make withdrawals from the age of 55 (increasing
to 57 in 2028). PensionBee offers a range of investment plans, including fossil fuel free
options, from some of the world's largest asset managers.
Operating in the GBP1 trillion market of Defined Contribution pension assets, PensionBee has
grown rapidly through its direct-to-consumer marketing activities, creating a household brand
name for the mass market.
The Company has over GBP3.0bn in Assets Under Administration and 183,000 Invested Customers
as at 31 December 2022. PensionBee has consistently maintained a Customer Retention Rate in
excess of 95% and an Excellent Trustpilot rating, reflecting its commitment to outstanding
customer service.
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 full year 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 full year 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 full year results.
Chief Executive Officer's Review
"While the macroeconomic environment remains uncertain, we focus on what we can control:
building a pension company you can believe in, trust and be proud to be a part of."
2022 has been a challenging year for all. We have witnessed war in Europe and exceptionally
harsh and volatile global markets, punctuated by rising interest rates, the energy crisis
and stubborn inflation that have meaningfully raised the cost of living for UK consumers.
In spite of these headwinds, or perhaps because of them, retirement planning has never been
more important.
Throughout this year, we have continued to focus on what matters: serving our customers and
supporting them through these challenges. The external environment has brought to the fore
difficult decisions for UK consumers. How should I save for the future? Should I delay my
retirement?
PensionBee has been there to offer its customers guidance and support, the type of service
that all consumers deserve from their pension providers. We are proud to have maintained our
Excellent Trustpilot score (4.6 ) and to have achieved impressive app store ratings (4.7 App
Store rating and 4.5 Google Play rating), reflecting the priority we place on customer communication
and rapid response times, with contribution to customer service from every management level
within the business (2021: Trustpilot score of 4.6 , 4.8 App Store rating and 4.7 Google Play
rating) .
As a company, we place great value and emphasis on doing what we said we would do. Trust has
never been more important, especially as we have cemented our place as a household brand name.
With brand awareness of more than 50% achieved(1) , we continued growing our customer base,
reaching a total of 183,000 Invested Customers(2) on our technology platform by the end of
the year (2021: 25% brand awareness and 117,000 Invested Customers). We attracted these customers
through a combination of data-led online performance marketing channels and our brand channels,
including television and our sponsorship of the 'Brentford Bees', a Premier League football
club.
As a result, amid steep declines in global equity and bond markets that have affected pension
values across the country, our Assets under Administration surpassed the GBP3bn mark and our
Revenue grew by 38% as compared to the previous year.(3) Our high Customer Retention Rate
of 97% and ongoing transfers and contributions from new and existing customers enabled us
to record approximately GBP1bn of Gross Inflows.(4) This, combined with the foundations of
our scalable technology platform and disciplined cost control, enabled us to reach key profitability
milestones of pre-marketing profitability across the fourth quarter of 2022 and post-marketing
profitability in November 2022, in line with our expectations.(5) We are primed to continue
to deliver on this path, expecting to achieve ongoing full profitability on an Adjusted EBITDA
basis by the end of 2023.(2)
This year was also notable for us with respect to environmental, social and governance ('ESG')
considerations, as we conducted an exercise to assess ESG materiality from the perspective
of our key stakeholders. We believe that all businesses must have a 'social licence' to operate,
and as such we believe that meeting our ESG responsibilities to stakeholders will enable us
to thrive over the long term. We were pleased to remain aligned with our stakeholders in our
ambition to offer an inclusive and innovative product, one characterised by stewardship, purpose
and excellent value, as well as to prioritise cyber security, diversity and inclusion and
offering fulfilling careers for our team. With 91% of our workforce feeling aligned with our
vision, mission and values(6) , we are meeting our goal of being an employer of choice with
an inspiring vision.
As we look forward to 2023 we recognise that the world is in transition: efforts to move to
a low carbon economy and one that is characterised by less inequality dominate our national
conversation. We are proud to be a part of this change with our innovative product offering
that empowers UK consumers to be 'pension confident' and to have control over their retirements.
Our newly-launched Impact Plan will enable our customers to prepare for retirement while investing
in companies that help further the achievement of the United Nations Sustainable Development
Goals.(7) We are also pleased to bring the 'regular withdrawals' feature to our customers,
a product innovation we have developed over this year, in response to feedback from our customers
over the age of 55.
While the macroeconomic environment remains uncertain, we focus on what we can control: building
a pension company you can believe in, trust and be proud to be a part of. I am immensely proud
of, and grateful to, the entire team for their dedication and hard work, for the spirit with
which they approach our mission and vision and for upholding our values and culture.
Outlook
We believe that the UK pensions market will continue to grow at pace, despite the challenging
financial markets, supported by the regulatory framework and favourable policy changes, the
acceleration of the UK's transition to digital technology and underlying trends in the employment
market that increasingly demand a modern pension consolidation solution like ours. New opportunities
and developments in technology are expected to continue to accelerate change in the pensions
industry in ways that will ultimately benefit all consumers. The need to save for retirement
through an efficient and scalable platform has never been greater, especially as we grapple
with a cost of living crisis.
Our resilient business model, leading customer proposition, household brand status, committed
and dynamic leadership team and robust capital position, will see us uniquely positioned to
continue to grow at pace, navigating any challenges that the year ahead brings.
We look forward to 2023 being yet another exciting year in the PensionBee story.
Romi Savova
Chief Executive Officer
15 March 2023
Notes:
1. Source: PensionBee brand tracker. Prompted brand awareness in January 2023 measured through
a consumer survey asking 'Which of the following have you heard of?' with respect to UK financial
services brands: Aviva 83%, Scottish Widows 77%, Standard Life 66%, Royal London 55%, PensionBee
52%, Hargreaves Lansdown 36%, Vanguard 32%, Fidelity 30%, Nutmeg 30%, AJ Bell 21%, Interactive
Investor 9%. Compares to prompted brand awareness for 2021 of 25%, sourced from Boring Money,
February 2022.
2. See definitions in the Measuring our Performance section.
3. 38% change in Revenue calculated based on Revenue of GBP17.7m for the year to 31 December
2022 as compared to GBP12.8m for the year to 31 December 2021. See definitions in the Measuring
our Performance section.
4. Gross Inflows of GBP1,060m, Gross Outflows of GBP(197)m, Net Inflows of GBP863m and Market
Growth and Other of GBP(424)m for the year to 31 December 2022 as set out in the Operating
and Financial Review. See definitions in the Measuring our Performance section.
5. Pre-marketing profitability measured using Adjusted EBITDA before Marketing. Post-marketing
profitability measured using Adjusted EBITDA. See definitions in the Measuring our Performance
section.
6. Source: PensionBee's annual Diversity, Inclusion, Equality & Support Survey, 2022. Compares
to 96% of the workforce feeling aligned to PensionBee's mission, vision and values, as measured
by PensionBee's Diversity, Inclusion and Engagement Survey, 2021.
7. The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States
in 2015, provides a shared blueprint for peace and prosperity for people and the planet, now
and into the future. At its heart are the 17 Sustainable Development Goals, which are an urgent
call for action by all countries - developed and developing - in a global partnership. They
recognise that ending poverty and other deprivations must go hand-in-hand with strategies
that improve health and education, reduce inequality, and spur economic growth - all while
tackling climate change and working to preserve our oceans and forests. Source: sdgs.un.org/goals.
Operating and Financial Review(1)
Continued Growth across all Key Metrics in 2022 and achievement of Adjusted EBITDA before
Marketing Profitability in the Fourth Quarter of 2022(2)
Trading for the financial year 2022 has been strong and in line with expectations.
We have continued to deliver significant growth across all our major Key Performance Indicators
. During 2022, the number of Invested Customers ('IC') increased by 56% to 183k and Assets
under Administration ('AUA') increased by 17% to over GBP3.0bn driven by strong Net Flows
of GBP863m.(1) Revenue increased by 38% to GBP17.7m with Annual Run Rate ('ARR') reaching
GBP19.5m.(3)
Becoming a profitable business has been a key objective for PensionBee. On the path to achieving
this objective, we are pleased to have delivered positive Adjusted EBITDA before Marketing
of GBP0.2m in the fourth quarter of 2022 (fourth quarter of 2021: GBP(1.5)m), in line with
our previously stated guidance and in spite of the backdrop of a challenging macroeconomic
environment and volatile capital markets. Profit/(Loss) before Tax for 2022 was GBP(22.4)m
(2021: GBP(25.0)m).
The Adjusted EBITDA before Marketing profitability milestone was achieved by virtue of our
recurring and predictable Revenue, supported by our high Customer Retention Rate of 97%, and
by the generation of operating leverage achieved through our scalable technology platform
and careful cost control. It also demonstrates the strength of our business model, our ability
to realise operating leverage throughout the business cycle, even during periods of high uncertainty
and volatility in the capital markets, and the strength of our execution capability.
Marketing Investment made us a Household Brand Name and
delivered Strong Growth
As at Year End
Dec-2022 Dec-2021 YoY
========= ========= =================
Advertising and Marketing Expenses
========= ========= =================
Advertising and Marketing Expenses (GBPm) (16.6) (12.9) 29%
========= ========= =================
Cost per Invested Customer (GBP)(4) 248 246 within threshold
========= ========= =================
Customers
========= ========= =================
Registered Customers (thousands) (1) 986 658 50%
========= ========= =================
Invested Customers (thousands) (1) 183 117 56%
========= ========= =================
Same Year RC:IC Conversion (% of RC)(1) 19% 18% +1ppt
========= ========= =================
While profitability is a key objective for the business, with a vast market opportunity, we
simultaneously continued to execute on our growth strategy, through investments in our brand
and performance marketing channels. As such, Advertising and Marketing Expenses increased
from GBP12.9m in 2021 to GBP16.6m in 2022.
Taking advantage of growing national awareness of pensions, our investment in brand building
campaigns and initiatives saw us become a household name, achieving prompted brand awareness
of more than 50%.(5) We rolled out our 'Yellow Chair' and 'Believe in the Bee' campaigns nationally,
across all channels. Furthermore, we continued to raise our profile through being the official
pension partner sponsor of Brentford Football Club.
Customer acquisition was supported by our proprietary in-house Data Platform, which continued
to deliver valuable insights across all of our core marketing channels, helping us to navigate
decision-making in a challenging external market. Our agility enabled us to respond and adjust
our spend across channels, re-focusing on the acquisition of more receptive customer cohorts.
Our acquisition strategy included brand campaigns being launched predominantly in the first
half of the year, with more lower-cost acquisition activities following later in the year,
allowing for a reduction in the Cost per Invested Customer ('CPIC') by the end of 2022.(1)
As a result of the marketing investment, we achieved strong customer growth with stable CPIC
and grew our Invested Customer base by 56% to 183,000 by the end of 2022.
Cost Disciplined Acquisition coupled with High Retention Rates delivered Strong Asset Growth
As at Year End
Dec-2022 Dec-2021 YoY
============ =========== =========
Customer Retention Rate (% of IC) (1) 97% 97% stable
============ =========== =========
AUA Retention Rate (% of AUA) (1) 97% 96% +1ppt
============ =========== =========
Opening AUA (GBPm) 2,587 1,358 91%
============ =========== =========
Gross Inflows (GBPm) 1,060 1,099 -4%
============ =========== =========
Gross Outflows (GBPm) (197) (145) 36%
============ =========== =========
Net Flows (GBPm) (1) 863 955 -10%
============ =========== =========
Market Growth/(Contraction) and Other (GBPm) (424) 275 n/m
============ =========== =========
Closing AUA (GBPm) 3,025 2,587 17%
============ =========== =========
Net Flows (GBPm) (1) 863 955 -10%
============ =========== =========
Of which Net Flows from New Customers (GBPm) 685 729 -6%
============ =========== =========
Of which Net Flows from Existing Customers (GBPm) 178 226 -21%
============ =========== =========
We delivered a 17% year-on-year increase in AUA from GBP2,587m to GBP3,025m in 2022, highlighting
the resilience of our AUA and underscoring our ability to grow, in spite of the challenging
global macroeconomic environment.
We maintained Gross Inflows for the year in excess of GBP1bn (2021: GBP1bn) as a result of
cost-disciplined new customer acquisition and a high sustained Customer Retention Rate of
97% (2021: 97%).
From the GBP863m of Net Flows generated across the year (2021: GBP955m), growth from new customers
represented the vast majority, with Net Flows from New Customers of GBP685m (2021: GBP729m),
reflecting the successful execution of cost-disciplined new customer acquisition and demonstrating
our ability to optimise marketing across channels and return on investment. Total Net Flows
were lower compared to last year, which was ultimately because of declining global markets
(see below for more details). Over the period we acquired 66,000 new Revenue-generating Invested
Customers (2021: 48,000).
Our existing customers have continued to grow their savings with us, with Net Flows from Existing
Customers of GBP178m generated in 2022 (2021: GBP226m). Since inception, we have consistently
enjoyed high Customer Retention Rates and AUA Retention Rates in excess of 95%, with this
trend having remained stable in 2022. We saw existing customers consolidating additional pensions
into their PensionBee online pension plans and customers contributing to their pensions, whilst
maintaining relatively low levels of withdrawals, in line with historical levels. We are pleased
to have observed underlying growth in Net Flows(1) from all annual customer cohorts across
2022.
However, unstable global markets did have an adverse effect on AUA, with Market Growth/(Contraction)
and Other of GBP(424)m in 2022 (2021: GBP275m). As is customary in the pensions industry,
our customers' pensions are invested predominantly in global equity capital markets, which
were impacted by a number of macroeconomic factors including increasing inflation, rising
interest rates and geopolitical tensions. As such, the decline in global market performance
during the year had an impact on our asset base, similar to the experience of other companies
in the sector.
Resilient Revenue Margin drove an Overwhelming Majority of Recurring Revenue
As at Year End
Dec-2022 Dec-2021 YoY
========= ========= =======
Contractual Revenue Margin (% of AUA)(1) 0.69% 0.69% stable
========= ========= =======
Realised Revenue Margin (% of AUA)(1) 0.63% 0.64% stable
========= ========= =======
Annual Run Rate Revenue (GBPm) 19.5 16.3 20%
========= ========= =======
Revenue (GBPm) 17.7 12.8 38%
========= ========= =======
We translated strong year-on-year AUA growth of 17% over 2022 (2021: 91%) into 38% (2021:
103%) growth in Revenue, reaching GBP17.7m (2021: GBP12.8m), underpinned by the stable Contractual
Revenue Margin. The Contractual Revenue Margin is the headline annual management fee paid
by customers before applying discounts for incremental pension savings above GBP100,000. The
Contractual Revenue Margin remained resilient at 0.69% (2021: 0.69%), as did the Realised
Revenue Margin (the annual management fee after discounts) of 0.63% (2021: 0.64%).
As 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. Therefore, the Annual Run Rate Revenue for December 2022
offers measurement of our progress and provides visibility and predictability with respect
to future years' Revenue.
We Scaled our Business Efficiently by Investing in our People,
Product Offering and Technology
As at Year End
Dec-2022 Dec-2021 YoY
========= ========= ====
Money Manager Costs (GBPm) (2.8) (2.3) 23%
========= ========= ====
Employee Benefits Expense
(excluding Share-based Payments) (GBPm) (9.6) (7.4) 28%
========= ========= ====
Other Operating Expenses (GBPm) (8.2) (6.6) 26%
========= ========= ====
Technology Platform Costs & Other Operating Expenses (GBPm) (17.8) (14.0) 27%
========= ========= ====
Our proprietary technology is modern, scalable and secure. The cloud-based and API-driven
platform provides the foundations on which to continue to build dynamic and innovative products,
while maintaining full control over the experience delivered to customers in a cost-efficient
manner. The scalability of the technology platform is key in driving operating leverage through
not only empowering more efficient marketing deployment, but also operational efficiencies
in administration and intuitive self serving capabilities for our customers.
During 2022, we made further investments in our technology platform. Investments made in our
Data Platform were instrumental in supporting decision-making around marketing budget allocation,
helping us to remain agile as we have navigated the volatile external environment. We dedicated
resources towards making ongoing efficiency improvements in consolidation activity and optimising
our transfer processes. The systems' investments made over the past few years have supported
the delivery of increased productivity for the PensionBee team and enhanced efficiency for
our customers, enhancing our operating leverage.
Continued product innovation is central to our strategy and also supports the realisation
of operating leverage over time. The PensionBee customer proposition has been enabled by investment
in continuous innovation and automation, allowing easy onboarding of customers and intuitive
lifetime self-service.
During 2022, continuous product innovations helped to increase our Invested Customer base
and enable them to contribute more into their pensions. We officially launched the 'Easy Bank
Transfer' feature, enhanced our 'Refer A Friend' program, and implemented the 'Stronger Nudge'
journey for customers over 50, further tailoring our product to our customers' needs. To complement
the ease of contributions, we worked on producing an easy-to-use tax relief calculator aimed
at helping our customers make the most of their tax allowances in the run up to the end of
the 2022/23 tax year.
Our product developments reduced friction in the customer journey and enabled our customers
to self-serve more efficiently, without the need to contact us. For instance, we upgraded
existing electronic transfer processes and further integrated with Altus Transfer Gateway,
which led to improvements in internal processing and faster transfer times for some paper-based
workplace pension schemes. Our investments in product and feature extension have not only
empowered customers with more intuitive self-serving features but have also supported efficiency
improvements and the generation of operating leverage over time.
As a result of the investment into the technology platform and the drive to improve automation,
we have expanded specialist roles in technology, product and marketing. However, average headcount
in customer service has remained stable as a function of the vast automation improvements
and team optimisation. Overall headcount increased from approximately 155 average full-time
employees in 2021 to approximately 185 in 2022, and the associated Employee Benefits Expense
increased to GBP9.6m for 2022 (2021: GBP7.4m).
Other Operating Expenses increased to GBP8.2m (2021: GBP6.6m), reflecting costs to support
increased headcount and new customer acquisition, and other fixed costs. Benefits from the
investment in automation have positioned us well on our path to achieving Adjusted EBITDA
profitability by the end of 2023.
Money Manager Costs increased to GBP2.8m in 2022 (2021: GBP2.3m), a lower rate than the increase
in Revenue, due to the maintenance of competitive pricing with money managers.
Profitability Metrics
As at Year End
Dec-2022 Dec-2021 YoY
=========== =========== ========
Adjusted EBITDA before Marketing (GBPm) (3.0) (3.6) 17%
=========== =========== ========
Adjusted EBITDA Margin before Marketing (% of Revenue) (17)% (28)% +11ppt
=========== =========== ========
Adjusted EBITDA (GBPm) (19.5) (16.4) -19%
=========== =========== ========
Adjusted EBITDA Margin (% of Revenue) (110)% (129)% +18ppt
=========== =========== ========
Profit/(Loss) before Tax (GBPm) (22.4) (25.0) 10%
=========== =========== ========
One of the key profitability metrics that we have measured is Adjusted EBITDA before Marketing,
given the discretionary nature of the marketing spend. This measure includes Money Manager
Costs, Technology Platform Costs and Other Operating Expenses but excludes Advertising and
Marketing Expenses, Share-based Payment costs and Transactions Costs. We delivered positive
Adjusted EBITDA before Marketing of GBP0.2m across the fourth quarter of 2022, with an improvement
in Adjusted EBITDA before Marketing Margin from (28)% to (17)% in 2022.
We also made further progress towards Adjusted EBITDA profitability, as operating leverage
was realised due to the scalability of the technology platform and the continued efficient
deployment of marketing spend. Adjusted EBITDA Margin improved from (129)% in 2021 to (110)%
in 2022. Adjusted EBITDA captures Advertising and Marketing Expenses but excludes the Share-based
Payment costs and Listing Costs.
Other Costs
As at Year End
Dec-2022 Dec-2021 YoY
========= ========= =====
Share-based Payment (GBPm) (1.9) (3.9) -52%
========= ========= =====
Listing Costs (GBPm) (0.7) (2.9) -77%
========= ========= =====
Finance Costs (GBPm) - (1.4) n/m
========= ========= =====
Profit/(Loss) before Tax (GBPm) (22.4) (25.0) 10%
========= ========= =====
Taxation (GBPm) 0.3 0.3 n/m
========= ========= =====
Basic Earnings per Share (9.97)p (11.86)p 16%
========= ========= =====
Profit/(Loss) before Tax narrowed to GBP(22.4)m for 2022 from GBP(25.0)m in 2021, reflecting
our progress towards profitability and showcasing the operating leverage in our model, whilst
we continue to grow.
The decrease in Share-based Payment costs for 2022 reflected the accelerated vesting and granting
of options in 2021 as a result of the Company's public listing.
Listing Costs in 2022 primarily consisted of fees and expenses incurred in relation to our
transfer to the Premium Segment of the Main Market of the London Stock Exchange, with the
costs in 2021 relating to the preparation for our Initial Public Offering in April 2021.
Finance Costs decreased as PensionBee did not hold any debt across 2022. The 2021 fees were
associated with the GBP10m Revolving Credit Facility ('RCF') that we entered into with National
Westminster Bank Plc on 22 March 2021 and later cancelled in September 2021. Initially sought
as part of a prudent liquidity management strategy, it was no longer deemed necessary due
to the strong cash position and attractive future prospects. The RCF was never drawn, but
a cancellation fee was incurred.
Taxation included enhanced tax credits in relation to routine Research and Development refunds.
No deferred tax asset was recognised with respect to the carried forward losses.
Basic Earnings per Share ('EPS') was (9.97)p for 2022 (2021: (11.86)p), the improvement reflecting
the progress made towards profitability.
Financial Position
The Group's balance sheet remains strong. At the end of 2022, the Cash and Cash Equivalents
balance was GBP21.3m (2021: GBP43.5m). Robust cost management was deployed to ensure that
favourable supplier terms were agreed with long term contracts being reviewed periodically.
As of the end of 2022, the Group had no significant borrowings. Net cash and cash equivalents
decreased by GBP22.2m in the 2022 financial year due to the planned deployment of investment
in marketing, our technology platform and additional headcount, to generate future returns
(2021: net increase of GBP36.8m, driven by the increase in funding as a result of the Company's
listing in April 2021).
Regulatory Capital and Financial Resources
PensionBee Limited, a subsidiary of the Company, is authorised and regulated by the FCA and
therefore adheres to capital requirements set by the FCA. As of December 2022, the capital
resources stood at GBP20.5m (unaudited) as compared to a capital resource requirement of GBP1.2m
(unaudited), resulting in coverage of 16.6x. We have maintained a healthy surplus over our
regulatory capital requirement throughout the year and continue to manage our financial resources
prudently.
Summary Financial Highlights*
As at Year End
Dec-2022 Dec-2021 YoY
========================= ========================= ========================
Annual Run Rate Revenue (GBPm)** 19.5 16.3 20%
========================= ========================= ========================
Revenue (GBPm) 17.7 12.8 38%
========================= ========================= ========================
Money Manager Costs,(6)
Technology Platform
Costs & Other Operating
Expenses (GBPm)(7) (20.6) (16.3) 26%
========================= ========================= ========================
Adjusted EBITDA before Marketing
(GBPm)** (3.0) (3.6) 17%
========================= ========================= ========================
Adjusted EBITDA Margin before
Marketing
(% of Revenue)** (17)% (28)% +11ppt
========================= ========================= ========================
Advertising and Marketing
Expenses (GBPm) (16.6) (12.9) 29%
========================= ========================= ========================
Adjusted EBITDA (GBPm)** (19.5) (16.4) -19%
========================= ========================= ========================
Adjusted EBITDA Margin (% of
Revenue)** (110)% (129)% +18ppt
========================= ========================= ========================
Profit/(Loss) before Tax (GBPm) (22.4) (25.0) 10%
========================= ========================= ========================
Basic Earnings per Share (9.97)p (11.86)p 16%
========================= ========================= ========================
* See definitions in the Measuring our Performance section.
** PensionBee's KPIs include alternative performance measures
('APMs'), which are indicated with a double asterisk. 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.
----------------------------------------------------------------
Notes:
1. See the Measuring our Performance section.
2. As at 31 December 2022. Invested Customers ('IC') means those customers who have transferred
pension assets or made contributions into one of PensionBee's investment plans. Assets under
Administration ('AUA') is the total invested value of pension assets within PensionBee Invested
Customers' pensions. It measures the new inflows less the outflows and records a change in
the market value of the assets. AUA is a measurement of the growth of the business and is
the primary driver of Revenue. 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.
3. As at 31 December 2022. 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. Annual Run Rate Revenue is calculated using the Recurring
Revenue for the month of December multiplied by 12.
4. Cost per Invested Customer ('CPIC') 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 GBP200-GBP250.
5. Source: PensionBee brand tracker. Prompted brand awareness in January 2023 measured through
a consumer survey asking 'Which of the following have you heard of?' with respect to UK financial
services brands: Aviva 83%, Scottish Widows 77%, Standard Life 66%, Royal London 55%, PensionBee
52%, Hargreaves Lansdown 36%, Vanguard 32%, Fidelity 30%, Nutmeg 30%, AJ Bell 21%, Interactive
Investor 9%. Compares to prompted brand awareness for 2021 of 25%, sourced from Boring Money,
February 2022.
6. Money Manager Costs are variable costs paid to PensionBee's money managers.
7. Technology Platform Costs & Other Operating Expenses comprises Employee Benefits Expense
(excluding Share-based Payment) and Other Operating Expenses.
Measuring our Performance
When looking at the overall performance of PensionBee, we use a range of key performance indicators
('KPI's) to monitor and assess our progress against our strategy.
Financial Performance Measures
Revenue 2022: 38% Revenue means the income generated from the asset base of PensionBee's customers, essentially
GBP17.7m annual management fees charged on the AUA, together with a minor revenue contribution from
2021: other services.
GBP12.8m
Annual Run Rate ('ARR') 2022: 20% Annual Run Rate Revenue is calculated using the Recurring Revenue for the relevant month
Revenue* GBP19.5m (December)
2021: multiplied by 12. This alternative performance measure has been selected to provide a more
GBP16.3m up-to-date metric for revenue given the amount of AUA in the relevant month.
This metric will be retired from the Company's ongoing regular reporting framework from 2023
onwards, given the primary focus on the Revenue metric as the Company reaches profitability.
============== =========== ===============================================================================================
Adjusted EBITDA* 2022: -19% Adjusted EBITDA is the operating profit or loss for the year before taxation, finance costs,
GBP(19.5)m depreciation, share based compensation and listing costs. This measure is a proxy for
2021: operating
GBP(16.4)m cash flow.
============== =========== ===============================================================================================
Adjusted EBITDA Margin* 2022: (110)% +18ppt(1) Adjusted EBITDA Margin means Adjusted EBITDA as a percentage of revenue for the relevant year.
2021: (129)%
============== =========== ===============================================================================================
Profit/(Loss) before 2022: 10% Profit/(Loss) before Tax is a measure that looks at PensionBee's profit or losses for the
Tax ('PBT') GBP(22.4)m year before it has paid corporate income tax.
2021:
GBP(25.0)m
============== =========== ===============================================================================================
Basic Earnings per Share 2022: (9.97)p 16% Basic Earnings per Share is calculated by dividing the profit or loss attributable to ordinary
('EPS') 2021: equity holders of the Group by the weighted average number of ordinary shares in issue during
(11.86)p the period.
============== =========== ===============================================================================================
* PensionBee's Key Performance Indicators include alternative performance measures ('APM's),
which are indicated with an asterisk. 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.
Non-Financial Performance Measures
Assets under Administration ('AUA') 2022: 17% Assets under Administration is the total invested value of pension assets within PensionBee's
GBP3.0bn Invested Customers' pensions. It measures the new inflows less the outflows and records a
2021: change in the market value of the assets. This KPI has been selected because AUA is a
GBP2.6bn measurement
of the growth of the business and is the primary driver of Revenue.
AUA Retention Rate 2022: 97% +1ppt(1) AUA Retention measures the percentage of retained PensionBee AUA from transfers out over the
average of the year. High AUA retention provides more certainty of future Revenue. This measure
can also be used to monitor customer satisfaction.
(% of AUA) 2021: 96%
============== ================== =================================================================================================
Net Flows 2022: GBP863m -10% Net Flows measures the cumulative inflow of PensionBee AUA from consolidation and contribution
2021: GBP955m ('Gross Inflows'), less the outflows from withdrawals and transfers out ('Gross Outflows')
over the relevant period.
============== ================== =================================================================================================
Registered Customers ('RC') 2022: 986k 50% Registered Customers measures customers who have started the sign-up process and have submitted
2021: 658k at least a name and an email address and includes those customers who are classified as Active
Customers.
This metric will be retired from the Company's ongoing regular reporting framework from 2023
onwards. Whilst the Registered Customers metric is a longer-term indicator of customer pipeline,
the focus is on Invested Customers that generate AUA.
============== ================== =================================================================================================
Same Year RC:IC Conversion 2022: 19% +1ppt(1) Same Year RC:IC Conversion percentage is calculated by dividing the number of Invested Customers
as at the end of the period by the number of Registered Customers as at the end of the period.
This measure monitors PensionBee's ability to convert customers through the acquisition funnel.
2021: 18%
This metric will be retired from the Company's ongoing regular reporting framework from 2023
onwards. Whilst the Registered Customers metric is a longer-term indicator of customer pipeline
,
the focus is on Invested Customers that generate AUA.
============== ================== =================================================================================================
Active Customers 2022: 273k 59% Active Customers means all customers who have requested to become an Invested Customer by
('AC') 2021: 172k accepting PensionBee's terms of business but for whom the transfer or contribution process
is not yet completed and all customers who are classified as Invested Customers.
This metric will be retired from the Company's ongoing regular reporting framework from 2023
onwards. Whilst the Active Customers metric is a more short-term indicator of customer pipeline,
the focus is on Invested Customers that generate AUA.
============== ================== =================================================================================================
Invested Customers 2022: 183k 56% Invested Customers means those customers who have transferred pension assets or made
('IC') 2021: 117k contributions
into one of PensionBee's investment plans.
============== ================== =================================================================================================
Customer Retention Rate (% of IC) 2022: 97% Stable Customer Retention Rate measures the percentage of retained PensionBee Invested Customers
over the average of the year. High customer retention provides more certainty of future Revenue.
This measure can also be used to monitor customer satisfaction.
2021: 97%
============== ================== =================================================================================================
Cost per Invested Customer ('CPIC') 2022: GBP248 Within threshold 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 GBP200-GBP250.
2021: GBP246
============== ================== =================================================================================================
Contractual Revenue Margin 2022: 0.69% Stable Contractual Revenue Margin means the weighted average contractual fee rate across PensionBee's
investment plans (before applying any size discount) calculated by reference to the amount
of AUA held in each plan across the period.
(% of AUA) 2021: 0.69%
This metric will be retired from the Company's ongoing regular reporting framework from 2023
onwards, with the introduction of Realised Revenue Margin (as set out below).
============== ================== =================================================================================================
Realised Revenue Margin (% of AUA) 2022: 0.63% Stable Realised Revenue Margin expresses the recurring Revenue over the average quarterly AUA held
in PensionBee's investment plans over the period.
2021: 0.64%
============== ================== =================================================================================================
Notes:
A ppt is a percentage point. A percentage point is the unit for the arithmetic difference
of two percentages.
Principal Risks and Uncertainties
Principal Risks
PensionBee has identified six types of top-level risks which could potentially have a material
adverse impact on the Company's business or long-term performance, and if not appropriately
mitigated they could result in unfavourable public perceptions of the Company's business prospects
and significant reputational damage. These risks could arise from internal or external events,
acts or omissions. The risk factors mentioned below do not purport to be exhaustive, as there
may be additional risks that the Company has not yet identified or has deemed to be immaterial.
Regulatory Risk
PensionBee's business is subject to risks relating to changes in UK government policy and
applicable regulations. Whilst we have historically been beneficiaries of favourable regulatory
changes, including through the introduction of Automatic Enrolment and Pension Freedoms, any
regulatory changes which are negative for PensionBee's business could have a material adverse
effect on our prospects.
PensionBee's operations are subject to authorisation and supervision from the Financial Conduct
Authority, and supervision from HMRC and the Information Commissioner's Office. PensionBee
may fail, or be held to have failed, to comply with regulations and such regulations and approvals
may change, making compliance more onerous and costly. The Financial Conduct Authority, or
other regulators, could conclude that PensionBee has breached applicable regulations, which
could result in a public reprimand, fines, customer redress or other regulatory sanctions.
PensionBee must also comply with relevant regulatory capital and liquidity requirements.
PensionBee may be subject to complaints or claims from customers and third parties in the
normal course of business. If a large number of complaints, or complaints resulting in substantial
customer and third party losses, were upheld against PensionBee, it could have a material
adverse effect on PensionBee's business and financial condition.
Information Security Risk
PensionBee faces various risks related to the confidentiality, availability and integrity
of our IT systems.
PensionBee holds confidential and personal data, which is subject to strict data protection
and privacy laws in the UK, including the UK GDPR. The loss or misuse of data could result
in a material loss of business, financial losses, regulatory enforcement actions and significant
harm to our reputation. If our information security processes, policies and procedures relating
to personal data are not fully implemented and followed by employees, or if any of our third
party service providers fail to manage data in a compliant manner, we could face financial
sanctions and reputational damage.
Furthermore, our operations are susceptible to cybercrime and loss or theft of data. Failure
to prevent such actions, or circumvention of our information security processes, policies
and procedures could result in financial losses, business interruption and unauthorised access
to personal data.
There is also a risk of inadequate or failed controls that are in place to ensure our technology
architecture is fit for purpose, including the infrastructure required to support applications,
networking, hardware and software, resulting in our inability to meet the standards required
to deliver to internal and external user expectations.
Operational Risk
During the regular course of business, PensionBee may be exposed to adverse financial or reputational
impact due to inadequate or failed internal processes, people performance or IT systems, or
due to third-parties or external events. Key operational process risks are linked to our customer
service, banking, finance, marketing and change implementation processes. Operational Risk
also includes our risks in the areas of human resource management, risk management and internal
governance.
PensionBee is dependent on third-party technology and financial services providers for the
provision of investment management, banking and technology services. Any termination, interruption
or reduced performance of the services provided by these third parties could negatively impact
the provision of our services and have a material adverse effect on our reputation and profitability.
Our operational infrastructure and business continuity may be affected by other failures or
interruption from events, some of which are beyond our control. Our systems and the systems
of our third-party providers may be vulnerable to fire, flood and other natural disasters,
power loss or telecommunications or data network failures, improper or negligent operation
by employees or service providers, unauthorised physical or electronic access, or other causes.
There is no guarantee that our preventative measures will protect us from all potential damage
arising from any of the events described above.
Financial Risk
Market Risk
PensionBee's business may be adversely affected by negative sudden or prolonged fluctuations
in global capital markets. We generate the vast majority of Revenue in the form of fees charged
on a recurring basis calculated by reference to the value of our AUA. Our Revenue and profitability
are therefore directly influenced by global capital markets. A general deterioration in the
global economy and a resulting decline in capital markets or an increase in volatility may
have a negative impact on the value of our customers' pensions and their overall confidence
to make new contributions to their PensionBee pensions.
Credit Risk
PensionBee is dependent on third-party financial services providers for the provision of investment
management and banking services. We are reliant upon these third parties for the safekeeping
of our own and our customers' assets. A default by one of these third parties would have a
material adverse effect on our reputation and financial position.
Strategic Risk
The pensions market is competitive and there is no guarantee that we will be able to continue
to maintain the growth levels we have achieved to date, or that we will be able to maintain
our financial performance either at historical or anticipated future levels. Our competitors
include a variety of financial services firms and our market is characterised by ongoing technological
progression, including of the underlying infrastructure and user experience. There is no guarantee
that we will continue to outpace our competitors. In addition, the pension market remains
cost-sensitive and competitors could materially undercut our fees, thereby generating pressure
on our revenues. Any failure to maintain our competitive position could lead to a reduction
in revenues and profitability as well as lower future growth.
We are dependent upon the experience, skills and knowledge of our Directors and senior managers
to implement our strategy. The loss of a significant number of Directors, senior managers
and/or other key employees, or the inability to recruit suitably experienced, qualified and
trained staff as needed, may cause significant disruption to our business and the ability
to achieve our strategic objectives.
Climate Risk
As climate change intensifies, dangerous weather events are becoming more frequent and more
severe. More frequent and intense droughts, storms, heat waves, rising sea levels, melting
glaciers and warming oceans can directly harm life and wreak havoc on people's livelihoods
and communities. Climate risk has been added to our principal risks this year.
These shifts in the global climate have a potential to adversely affect the lives, livelihoods
and health status of our employees, customers and other stakeholders, or to have broader implications
on economic, social and cultural assets. Any of these changes could in turn have a material
adverse effect on PensionBee's business and financial position.
Summary of Risks and Mitigations
Through the risk management process described above, we have taken the appropriate steps to
reduce risk in accordance with our risk appetite. The summary of these mitigating factors
is presented below.
Principal Risk Risks Mitigations
Regulatory Risk The risk of regulatory
sanctions, material * Maintaining a robust risk management framework and a
financial loss, or set of internal policies which are reviewed regularly
reputational damage the
Company
could suffer as a result of * Ensure adequate staff training and communication for
its failure to comply with key policies and procedures
applicable laws,
regulations, rules,
or related internal * Comprehensive second line assurance programme in
standards and codes of place providing oversight over the effectiveness of
conduct regulatory compliance and related controls
* Robust change approval process requiring regulatory
compliance checks
* Regulatory capital and liquidity planning and
monitoring through the Finance function
* Regular interactions with industry bodies to
proactively monitor trends
* Values-based culture and strategy centred around
Consumer Duty
============================ ============================================================
Information Security Risk The risk of data loss,
theft or disruption as a * Backing up data regularly to allow for recovery in
result of a technology the event of cyber attack or corruption of data
failure or cyber attack
on information systems,
both internally and * Proactive technical and analytical vulnerability
throughout the supply chain assessment and mitigation
* Monitoring key third party services and performance
metrics as part of the ISMS
* Ongoing infrastructure assessments against business
requirements
* Ongoing compliance and certification to ISO 27001 and
Cyber Essentials Plus
* Ongoing monitoring of compliance with applicable
regulation and legislation in respect of Data
Protection
* Maintaining a robust policy set and controls to keep
information secure
* Frequent training for all employees to promote a
culture of security awareness
* Continuing to invest in the Information Security
Programme in order to mitigate the evolving cyber
risks
============================ ============================================================
Operational Risk The risk of loss,
disruption of business or * Implementing automation to reduce manual processing
adverse regulatory action
resulting from inadequate
or failed internal * A comprehensive set of internal controls, operational
processes, people procedures and Company policies
performance, systems, or
due to third parties or
external * Periodic training for all employees and specialised
events training for customer service teams
* Structured performance management for all employees
and formalised succession planning for key roles
* Robust external supplier selection and due diligence
process with ongoing monitoring of key suppliers
============================ ============================================================
Financial Risk The risk of the Company's
inability to fulfil its * Geographic and asset class diversification of the
financial obligations or plans
internal objectives
due to loss of revenue
resulting from adverse * Recurring Revenue from long-duration assets
price movements in the
capital markets, or the
impact of worsening * Financial planning based on scenario analysis
creditworthiness or default
of a key financial partner
* Partnering with only large and reputable asset
managers, assessed annually in our value for money
exercise, and banking institutions
* Internal controls in place monitoring capital quality
and reserves
* Robust processes in place to ensure the integrity of
financial data
============================ ============================================================
Strategic Risk The risk of failures in
strategic planning and * Core objectives calibrated using customer and
execution leading to the regulatory trends and feedback
Company not achieving
its core objectives
* Agile product development and deployment cycles
* Robust strategic change management internal controls
in place
============================ ============================================================
Climate Risk The risk of negative impact
of climate change or its * Small physical footprint, remote working, cloud-based
broader economic, financial technology
and societal
consequences on the
Company, or the Company's * Risk transfer policies
failure to meet
sustainability requirements
from a commercial, * Ongoing monitoring of regulatory compliance
regulatory or stakeholder
perspective
* Screenings applied in our funds to reduce harmful
exposures (Tailored Plan, Fossil Fuel Free Plan,
Impact Plan)
* Using asset managers, banking and cloud providers
that have robust business continuity plans in place
============================ ============================================================
Viability Statement
In accordance with provision 31 of the UK Corporate Governance Code, the Board has assessed
the viability of the Group for the four-year period to December 2026, considering this to
be an appropriate period over which to assess the Group's strategy and its capital requirements,
considering the investment needs of the business and the potential risks and uncertainties
that could impact the Group's ability to meet its strategic objectives. The Board considers
a four-year period to be an appropriate time frame because it would likely capture the length
of a potential downside business cycle and provide sufficient time to identify and execute
mitigating actions required to address the stress test scenarios as outlined below.
This assessment has been made giving consideration to the financial position, regulatory capital
and liquidity requirements of the Group (as set out in the Operating and Financial Review
within the Strategic Report) , in the context of the Company's strategy, business model and
medium-term business plan, together with an assessment of the principal risks and uncertainties
(as set out in the Managing our Risks section of the Strategic Report). Such risks have been
categorised into regulatory, information security, operational, financial, reputational, strategic
and climate risks, in accordance with our risk management framework.
PensionBee Limited is an FCA regulated entity and therefore is required to hold appropriate
levels of own funds which are at all times in excess of its Liquid Capital Requirement and
other capital requirements.
The Board-approved medium term plan assumes the business continues to grow Invested Customers
and AUA through continued investment in its customer proposition, marketing, people and technology.
It is assumed that there are no significant or prolonged market movements in underlying asset
values from the time the plan was approved by the Board.
The Board has also considered the potential impact of the following stress test scenarios,
which together represent a severe and unlikely, but possible scenario. The stress test scenarios
would impact the plan from 2023 onwards:
-- Financial Risk (Market Risk) - Prolonged equity market volatility. A material reduction in
global equity markets as a result of global macroeconomic uncertainty (such as geopolitical
disruptions, persistent inflation and a high interest rate environment) has been assumed over
the forecast period whereby the equity markets fall by 20% during the first year and only
gradually recover over the forecast period, returning to the pre-crisis level only after the
forecast period.
-- Information Security Risk - The materialisation of a confidentiality, availability or integrity
event that undermines our reputation and reduces conversion and reduces average pension pot
sizes. A material reduction in the customer conversion rate and average pension pot size of
newly acquired customers has been assumed over the forecast period, whereby it decreases by
10%.
In the event that such modelled scenarios were to manifest, the Board would consider the reduction
of discretionary marketing expenditure and the implementation of fixed cost savings as key
management mitigating actions to be taken. The Board considers this approach to be reasonable
in light of the Group's performance and positioning within the UK competitive landscape.
The results have confirmed that the Group would be able to withstand the adverse financial
impact of these scenarios occurring together over the four-year assessment period and that
it would continue to be able to meet its liabilities and capital requirements.
The Group's medium term plan was reviewed by the Board in December 2022 and subsequently approved
in January 2023. The stress test scenarios and associated mitigating actions were reviewed
in January 2023 and subsequently approved in March 2023. The Directors confirm that they have
a reasonable expectation that the Group will be able to continue to operate and meet its capital
requirements and liabilities as they fall due over the four-year period to December 2026.
The Strategic Report was approved by the Board on 15 March 2023 and signed on its behalf by
Romi Savova
Chief Executive Officer
15 March 2023
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and Financial Statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year.
Under that law, they are required to prepare the Group Financial Statements in accordance
with International Financial Reporting Standards ('IFRS') as adopted by the UK in conformity
with the requirements of the Companies Act 2006 and have elected to prepare the Parent Company
Financial Statements in accordance with UK Accounting Standards, including FRS 102, the Financial
Reporting Standard applicable in the UK and Republic of Ireland. Under company law, the Directors
must not approve the Financial Statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Company and of their profit or loss for that
period.
In preparing each of the Group and Parent Company Financial Statements, the Directors are
required to:
-- Select suitable accounting policies and then apply them consistently;
-- Make judgements and estimates that are reasonable, relevant, reliable and prudent;
-- For the Group Financial Statements, state whether they have been prepared in accordance with
IFRS as adopted by the UK, subject to any material departures disclosed and explained in the
Group Financial Statements;
-- For the Parent Company Financial Statements, state whether Financial Reporting Standard 102
has been followed, subject to any material departures disclosed and explained in the Parent
Company Financial Statements;
-- Assess the Company's ability to continue as a going concern, disclosing, as applicable, matters
related to going concern; and
-- Use the going concern basis of accounting unless they either intend to liquidate the Group
or the Parent Company or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient
to show and explain the Company's operations and disclose with reasonable accuracy at any
time the financial position of the Company and that enable them to ensure that its Financial
Statements comply with the Companies Act 2006. They are responsible for such internal control
as they determine is necessary to enable the preparation of Financial Statements that are
free from material misstatement, whether due to fraud or error, and have general responsibility
for taking such steps as are reasonably open to them to safeguard the assets of the Group
and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic
Report, Directors' Report, Directors' Remuneration Report and Corporate Governance report
that complies with that law and those regulations. The Directors are responsible for the maintenance
and integrity of the corporate and financial information included on the Company's website.
Legislation in the UK governing the preparation and dissemination of Financial Statements
may differ from legislation in other jurisdictions.
We confirm that to the best of our knowledge:
-- The Financial Statements, prepared in accordance with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation taken as a whole; and
-- The Strategic Report includes a fair review of the development and performance of the business
and the position of the issuer and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and uncertainties that they face.
We consider that the Annual Report and Financial Statements 2022, taken as a whole, is fair,
balanced and understandable and provides the information necessary for shareholders to assess
the Company's position and performance, business model and strategy.
Approved by the Board of Directors on 15 March 2023 and signed on its behalf by:
Romi Savova
Chief Executive Officer
15 March 2023
Results for the Year
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
----------------------------------------------------------------------------------------------------------------------
2022 2021
----------------------------------------------------------------------------------------- ------------ -------------
Note GBP 000 GBP 000
----------------------------------------------------------------------------------------- ------------ -------------
Revenue 4 17,662 12,753
----------------------------------------------------------------------------------------- ------------ -------------
Employee Benefits Expense
(excluding Share-based Payment) 5 (9,554) (7,447)
----------------------------------------------------------------------------------------- ------------ -------------
Share-based Payment 5, 21 (1,898) (3,939)
----------------------------------------------------------------------------------------- ------------ -------------
Depreciation Expense 12, 13 (276) (256)
----------------------------------------------------------------------------------------- ------------ -------------
Advertising and Marketing (16,554) (12,865)
----------------------------------------------------------------------------------------- ------------ -------------
Other Expenses 7 (11,067) (8,862)
----------------------------------------------------------------------------------------- ------------ -------------
Listing Costs 25 (687) (2,947)
----------------------------------------------------------------------------------------- ------------ -------------
Operating Profit/(Loss) (22,374) (23,563)
----------------------------------------------------------------------------------------- ------------ -------------
Finance Costs 8 (46) (1,416)
----------------------------------------------------------------------------------------- ------------ -------------
Profit/(Loss) before Tax (22,420) (24,979)
----------------------------------------------------------------------------------------- ------------ -------------
Taxation 10 274 348
----------------------------------------------------------------------------------------- ------------ -------------
Profit/(Loss) for the Year (22,146) (24,631)
----------------------------------------------------------------------------------------- ------------ -------------
Total Comprehensive Profit/(Loss) for the Year wholly attributable to Equity Holders of
the
Parent Company (22,146) (24,631)
----------------------------------------------------------------------------------------- ------------ -------------
Earnings per Share (pence per Share)
----------------------------------------------------------------------------------------- ------------ -------------
Basic and Diluted 11 (9.97) (11.86)
----------------------------------------------------------------------------------------- ------------ -------------
The above results were derived from continuing operations.
The notes form an integral part of these financial statements.
Consolidated Statement of Financial Position
As at 31 December 2022
2022 2021
----------------------------------------------------------------------------------------- ------------ -------------
Note GBP 000 GBP 000
----------------------------------------------------------------------------------------- ------------ -------------
Assets
----------------------------------------------------------------------------------------- ------------ -------------
Non-current Assets
----------------------------------------------------------------------------------------- ------------ -------------
Property, Plant and Equipment 12 358 127
----------------------------------------------------------------------------------------- ------------ -------------
Right of Use Assets 13 553 692
----------------------------------------------------------------------------------------- ------------ -------------
911 819
----------------------------------------------------------------------------------------- ------------ -------------
Current Assets
----------------------------------------------------------------------------------------- ------------ -------------
Trade and Other Receivables 14 3,412 3,171
----------------------------------------------------------------------------------------- ------------ -------------
Cash and Cash Equivalents 21,321 43,518
----------------------------------------------------------------------------------------- ------------ -------------
24,733 46,689
----------------------------------------------------------------------------------------- ------------ -------------
Total Assets 25,644 47,508
----------------------------------------------------------------------------------------- ------------ -------------
Equity and Liabilities
----------------------------------------------------------------------------------------- ------------ -------------
Equity
----------------------------------------------------------------------------------------- ------------ -------------
Share Capital 15 223 221
----------------------------------------------------------------------------------------- ------------ -------------
Share Premium 16 53,218 53,218
----------------------------------------------------------------------------------------- ------------ -------------
Share-based Payment Reserve 16,21 10,215 8,317
----------------------------------------------------------------------------------------- ------------ -------------
Retained Earnings 16 (40,124) (17,976)
----------------------------------------------------------------------------------------- ------------ -------------
Total Equity 23,532 43,780
----------------------------------------------------------------------------------------- ------------ -------------
Non-current Liabilities
----------------------------------------------------------------------------------------- ------------ -------------
Lease Liability 17 397 560
----------------------------------------------------------------------------------------- ------------ -------------
Provisions 18 46 43
----------------------------------------------------------------------------------------- ------------ -------------
443 603
----------------------------------------------------------------------------------------- ------------ -------------
Current Liabilities
----------------------------------------------------------------------------------------- ------------ -------------
Lease Liability 17 154 97
----------------------------------------------------------------------------------------- ------------ -------------
Trade and Other Payables 19 1,515 3,028
----------------------------------------------------------------------------------------- ------------ -------------
1,669 3,125
----------------------------------------------------------------------------------------- ------------ -------------
Total Liabilities 2,112 3,728
----------------------------------------------------------------------------------------- ------------ -------------
Total Equity and Liabilities 25,644 47,508
----------------------------------------------------------------------------------------- ------------ -------------
The notes form an integral part of these financial statements.
Approved by the Board on 15 March 2023 and signed on its behalf by:
Christoph J. Martin
Chief Financial Officer
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
----------------------------------------------------------------------------------------------------------------------
Share Capital Share Premium Share-based Payment Retained Earnings Total
Reserve
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Note GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
At 1 January 2021 - 30,322 4,378 (28,245) 6,455
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Profit/(Loss) for the
Year - - - (24,631) (24,631)
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Total Comprehensive
Profit/(Loss) - - (24,631) (24,631)
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Share-based Payment
Transactions - - 3,939 - 3,939
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Issue of Share Capital
in PensionBee
Limited - 4,765 - - 4,765
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Group Reorganisation 15 180 (35,088) - 34,908 -
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Issue of Share Capital
in PensionBee
Group plc 15 33 54,967 - - 55,000
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Transaction Costs on
Issue of Shares 15 - (1,748) - - (1,748)
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Exercise of Share
Options 15 8 - - (8) -
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
At 31 December 2021 221 53,218 8,317 (17,976) 43,780
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
At 1 January 2022 221 53,218 8,317 (17,976) 43,780
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Profit/(Loss) for the
Year - - - (22,146) (22,146)
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Total Comprehensive
Profit/(Loss) - - (22,146) (22,146)
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Share-based Payment
Transactions - - 1,898 - 1,898
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
Exercise of Share
Options 15 2 - - (2) -
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
At 31 December 2022 223 53,218 10,215 (40,124) 23,532
------------------------ -------------- -------------- ----------------------- ------------------ ---------------
The notes form an integral part of these consolidated financial
statements.
Consolidated Statement of Cash Flows
For the year ended 31 December 2022
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2022 2021
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Note GBP 000 GBP 000
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Cash Flows used in Operating Activities
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Profit/(Loss) for the Year (22,146) (24,631)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Adjustments to Cash Flows from Non-cash Items
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Depreciation 276 256
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Loss on Disposal of Equipment 7 - 10
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Finance Costs 8 46 1,416
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Share-based Payment Transactions 1,898 3,939
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Taxation 10 (274) (348)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Operating Cash Flows before movements in Working Capital (20,200) (19,358)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Working Capital Adjustments
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Increase in Trade and Other Receivables 14 (162) (1,277)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Increase in Trade and Other Payables 19 (1,511) 997
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Cash used in Operations (21,873) (19,638)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Income Taxes Received 10 194 -
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Net Cash Flow used in Operating Activities (21,679) (19,638)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Cash Flows used in Investing Activities
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Acquisition of Equipment 12 (367) (69)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Direct cost for acquiring Right of Use Asset - (6)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Net Cash Flow used in Investing Activities (367) (75)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Cash Flows from Financing Activities
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Revolving Credit Facility Fees - (1,409)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Proceeds from Issue of Ordinary Shares - 59,765
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Transaction Costs on Issue of Shares - (1,748)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Payment of Principal of Lease Liabilities 17 (105) (113)
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Payment of Interest of Lease Liabilities 17 (46) -
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Net Cash Flows from Financing Activities (151) 56,495
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Net (Decrease) / Increase in Cash and Cash Equivalents (22,197) 36,782
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Cash and Cash Equivalents at 1 January 43,518 6,736
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Cash and Cash Equivalents at 31 December 21,321 43,518
-------------------------------------------------------------------------------------------------------------------------- --------------------------------- ----------------------------------
Changes in the Group's liabilities arising from financing activities, including both cash
and non-cash changes have been disclosed in Note 17 to the financial statements.
The notes form an integral part of these consolidated financial statements.
Notes to the Financial Statements
for the year ended 31 December 2022
1. General Information
PensionBee Group plc ('Company') is the parent company of PensionBee Limited ('Subsidiary')
(together the 'Group'). The Company is a public company, whose shares are traded on the Premium
Segment of the Main Market of the London Stock Exchange ('LSE') and is incorporated and domiciled
in England and Wales.
The address of its registered office is:
209 Blackfriars Road
London
SE1 8NL
United Kingdom
The consolidated financial statements were approved by the Board on 15 March 2023.
The financial information contained in this report does not constitute statutory accounts
within the meaning of section 434 of the Companies Act 2006. The financial information set
out in this report has been extracted from the Group's Annual Report and Financial Statements
2022, which have been approved by the Board of Directors on 15 March 2023. The Auditors have
reported on the 2021 and 2022 accounts, their reports were: (i) unqualified; (ii) did not
include a reference to any matters to which the Auditors drew attention by way of emphasis
without qualifying their report; and (iii) did not contain a statement under section 498(2)
or (3) of the Companies Act 2026.
Principal Activity
The principal activity of the Group is that of a direct-to-consumer online pension provider.
The Group seeks to make its UK 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 (from the age of 55), all from the palm of their hand.
2. Accounting Policies
Basis of Preparation
The consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards ('IFRS') as adopted by the UK in conformity with the requirements
of the Companies Act 2006. The financial statements are prepared on the historical cost basis
and on a going concern basis.
The preparation of financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the Group's accounting policies.
The financial statements are presented in GBP and all values are rounded to the nearest thousand
(GBP'000), except when otherwise indicated. The functional currency of the Company is GBP
because it is the primary currency in the economic environment in which the Company operates.
Basis of Consolidation
The consolidated financial statements consolidate the financial statements of the Company
and its subsidiary undertakings drawn up to 31 December 2022.
On 24 March 2021, PensionBee Group plc acquired all the issued shares of PensionBee Limited
through a share for share transaction ('Group Reorganisation'). For every issued share in
PensionBee Limited, 800 shares of PensionBee Group plc were issued. PensionBee Group plc issued
180,054,400 ordinary shares of GBP0.001 each. The newly issued ordinary shares were accounted
for at their nominal value. As part of the Group Reorganisation, the Company reduced its share
premium to create additional distributable reserves. From the acquisition date, PensionBee
Limited became a subsidiary of PensionBee Group plc. On the same date, all the share options
granted by PensionBee Limited to its employees were cancelled and replaced by share options
granted by PensionBee Group plc. The cancellation and replacement of share options was accounted
for as a modification with no impact on the vesting conditions and the share options valuation.
A subsidiary is an entity controlled by the Company. Control is achieved where the Company
has the power to govern the financial and operating policies of an entity so as to obtain
benefits from its activities. The Company reassesses whether it controls an entity if facts
and circumstances indicate there are changes to one or more elements of control.
Inter-company transactions, balances and unrealised gains on transactions between the Company
and its subsidiary, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition
in the consolidated financial statements.
Summary of Significant 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,
unless otherwise stated.
Going Concern
The Directors have a reasonable expectation that the Group has adequate financial resources
to continue in operational existence for the foreseeable future and are satisfied that the
Group can continue to pay its liabilities as they fall due for a period of at least 12 months
from the date of approval of these financial statements. The Group has strong cash reserves
and forecasts growth that should see the financial results improve in the future years.
The Group has been operationally resilient as proven by consistent operational efficiencies
that have been maintained during the financial year. Stress testing was done by considering
severe and unlikely but possible scenarios including a sharp decline in equity markets, the
worsening of conversion and lower transferred-in pension pot sizes, all of which could potentially
be caused by the macroeconomic and geopolitical environment. The impact of the invasion of
Ukraine by Russia on global capital markets and on the world more generally has also been
considered in the Directors' assessment of going concern. While the Group's own exposure to
Russia in terms of investments is minimal, rounding to 0%, broader market volatility could
impact Assets under Administration and the Directors will continue to monitor the ongoing
situation.
The Group has adequate resources to survive macroeconomic downturns and the Directors concluded
that the Group has sufficient financial resources to remain in operational existence. For
these reasons, the Directors adopt the going concern basis of preparation for these financial
statements.
Changes in Accounting Policy
The following amendments are effective for the period beginning 1 January 2022:
Standard Effective Date, Annual Period
beginning on or after
Onerous Contracts - Cost of Fulfilling a Contract 1 January 2022
(Amendments to IAS 37)
Property, Plant and Equipment: Proceeds before 1 January 2022
Intended Use (Amendments to IAS 16)
Annual Improvements to IFRS Standards 2018-2020 1 January 2022
(Amendments to IFRS 1, IFRS 9, IFRS 16 and
IAS 41)
References to Conceptual Framework (Amendments to 1 January 2022
IFRS 3)
None of the standards, interpretations, and amendments effective for the first time from 1
January 2022 have had a material effect on the financial statements.
New Standards, Interpretations and Amendments not yet Effective
The new standards which are not yet effective will not have a material impact on the financial
statements.
Standard Effective Date, Annual Period
beginning on or after
Amendments to IAS 1 - Classification 1 January 2023
Amendments to IAS 1 and IFRS Practice Statement 2 1 January 2023
- Deciding which Accounting Policies to
Disclose
Amendments to IAS 8 - Distinction between changes 1 January 2023
in Accounting Policies and Accounting Estimates
Amendments to IAS 12 - Deferred Tax related to 1 January 2023
Assets
Revenue Recognition
Revenue represents amounts receivable for services net of VAT. Revenue is derived from the
administration of our customers' retirement savings and the provision of one-off ancillary
services to customers. The Group operates a service to combine and transfer customers' old
pensions into new online plans, which are subsequently managed by third party money managers.
The Group has applied the 5-step model outlined in IFRS 15 Revenue from contracts with customers
as is set out below:
Identification of the contract with a customer - During account opening, the customer is
made aware of the promises the Group is making. Rights and obligations of each party are outlined.
The point at which the customer agrees to the terms and conditions is the point at which both
the Group and the customer have signed or agreed the contract.
Identification of the performance obligations in the contract - The Group makes one promise
to its customers, the careful administration of the customers' retirement savings, including
through investments with its third party money managers. The Group performs administrative
tasks during the process of on boarding its customers to its technology platform which are
necessary for the fulfilment of administration of the customers' retirement savings. The Group
does not consider these administrative tasks to be a separate performance obligation. As a
result, it is considered that the Group has a single performance obligation, which is the
administration of the customers' retirement savings.
Determination of the transaction price - The money managers invest customers' retirement
savings in funds ('Group Plans') that match each customer's selection. The Group charges an
annual management fee that is charged daily against the units held by each customer. The annual
management fee is based on a fixed percentage (%) which varies for each of the Group Plans;
the fees range from 0.50% to 0.95%. There is a further fixed discount of 50% provided to customers
who have over GBP100,000 in their pension pots. The discount is applied to the incremental
amount over and above GBP100,000.
Allocation of the transaction price - As there is only one performance obligation, the whole
transaction price is allocated to this performance obligation.
Recognition of revenue when a performance obligation is satisfied - The administration of
customers' retirement savings is continuous until the customer fully withdraws their pension
pot or transfers it to another UK registered pension provider. Revenue is recognised over
time as the customer simultaneously receives and consumes the benefits provided by the Group's
performance as the Group performs them. Revenue is calculated daily as a percentage (basis
points) of the value of Assets under Administration ('AUA') as agreed by the customer.
Consideration Payable to Customers
The Group runs a number of incentive-linked marketing campaigns. Under these campaigns, a
customer becomes entitled to either a pension contribution or cashback once they make their
first live pension transfer. This consideration payable to the customer is not in exchange
for a distinct good or service that the customer transfers to the Group. Therefore, it is
accounted for as a reduction to the transaction price. The full consideration is accounted
for as a revenue reduction in the year it is payable because the difference between spreading
it over the contract life and recognising it in full in the year it is incurred is not material.
A materiality assessment is done annually.
Recurring Revenue
The Group's revenue is recurring in nature as the annual charges are calculated daily as a
percentage (basis points) of the value of AUA and will continue to be earned on an ongoing
basis whilst the Group administers those assets. Recurring revenue is derived from management
fees and is recognised based on daily accruals of customers' pension balances as the performance
obligation, being the provision of pension scheme administration services to customers, is
met. These management fees are charged daily and collected by the Group on a monthly basis.
Other Revenue
Other Revenue relates to one-off ancillary and ad-hoc services including pension splitting
on divorce, early withdrawals owing to ill-health, and full draw-down within one year of becoming
an Invested Customer. For this revenue stream, the performance obligation is the execution
of the requested task. There are fee structures in place which are used to determine the transaction
price. Revenue is recognised at a point in time when the requested task is executed (when
the service is provided to the customer).
Foreign Currency Transactions and Balances
In preparing the financial statements of the Group entities, transactions in currencies other
than the entity's functional currency (foreign currencies) are recognised at the rates of
exchange prevailing on the dates of the transactions. At each reporting date, monetary assets
and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing
at that date. Non-monetary items carried at fair value that are denominated in foreign currencies
are translated at the rates prevailing at the date when the fair value was determined. Non-monetary
items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in the statement of comprehensive income in the period
in which they arise.
For the purpose of presenting consolidated financial statements, transactions in foreign currencies
are translated to the Group's presentation currency at the foreign exchange rate recorded
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies
at the balance sheet date are retranslated to the presentation currency at the foreign exchange
rate recorded at that date. Foreign exchange differences arising on translation are recognised
in the statement of comprehensive income. There are no material foreign exchange transactions
in the financial statements.
Tax
Tax on the loss for the year comprises research and development credit. There was no current
or deferred tax charge for the year (2021: GBPnil). Tax is recognised in the statement of
comprehensive income except to the extent that it relates to items recognised directly in
equity or other comprehensive income, in which case it is recognised directly in equity or
other comprehensive income.
Current income tax assets and liabilities are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted at the reporting date in the United Kingdom
where the Group operates and generates taxable income.
Management periodically evaluates positions taken in the tax returns with respect to situations
in which applicable tax regulations are subject to interpretation and establishes liabilities
where appropriate.
Deferred tax is provided using the liability method on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes
at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward
of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the
extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused tax losses can
be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets
are re-assessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realised or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted at the reporting date.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a
legally enforceable right to set off current tax assets and current tax liabilities and the
deferred tax assets and deferred tax liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities which intend
either to settle current tax liabilities and assets on a net basis, or to realise the assets
and settle the liabilities simultaneously, in each future period in which significant amounts
of deferred tax liabilities or assets are expected to be settled or recovered.
Property, Plant and Equipment
Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment
losses. The Group assesses at each reporting date whether there are impairment indicators
for tangible fixed assets.
Depreciation
Depreciation is charged to the statement of comprehensive income on a straight-line basis
over the estimated useful lives of each part of an item of tangible fixed assets. The estimated
useful lives are as follows:
Asset Class Depreciation Method
and Rate
Computer Equipment three years straight
line
Furniture and Fittings four years straight
line
Leasehold Improvements straight line over
life of the lease
Right of Use Assets straight line over
life of the lease
An item of property, plant and equipment and any significant part initially recognised is
derecognised upon disposal (i.e. at the date the recipient obtains control) or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the statement of comprehensive income when the asset is
derecognised.
The residual values, useful lives, and methods of depreciation of property, plant and equipment
are reviewed at each financial year end and adjusted prospectively, if appropriate.
Impairment of Non-Financial Assets
The Group assesses at each reporting date, whether there is an indication that an asset may
be impaired. If any such indication exists, the recoverable amount of the asset is estimated
based on future cashflows with a suitable range of discount rates and the expectations of
future performance. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. Impairment loss is recognised in the statement of comprehensive
income.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and short term highly liquid deposits with
a maturity of less than 3 months.
Trade Receivables
Trade and other receivables are recognised initially at the transaction price less attributable
transaction costs. Subsequent to initial recognition they are measured at amortised cost using
the effective interest method, less any impairment losses in the case of trade receivables
and other receivables.
Trade Payables
Trade and other payables are recognised initially at transaction price plus attributable transaction
costs. Subsequently they are measured at amortised cost using the effective interest method.
Trade and other payables are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. Trade payables are classified as current
liabilities if payment is due within one year or less (or in the normal operating cycle of
the business if longer). If not, they are presented as non-current liabilities.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive)
as a result of a past event, it is probable that the Group will be required to settle that
obligation and a reliable estimate can be made of the amount of the obligation. Provisions
are measured at the Directors' best estimate of the expenditure required to settle the obligation
at the reporting date and are discounted to present value where the effect is material.
Leases
Initial Recognition and Measurement
The Group initially recognises a lease liability for the obligation to make lease payments
and a right-of-use asset for the right to use the underlying asset for the lease term.
The lease liability is measured at the present value of the lease payments to be made over
the lease term. The lease payments include fixed payments, purchase options at exercise price
(where payment is reasonably certain), expected amount of residual value guarantees, termination
option penalties (where payment is considered reasonably certain) and variable lease payments
that depend on an index or rate.
The right-of-use asset is initially measured at the amount of the lease liability, adjusted
for lease prepayments, lease incentives received, the group's initial direct costs (e.g. commissions)
and an estimate of restoration, removal, and dismantling costs.
Subsequent Measurement
After the commencement date, the Group measures the lease liability by:
(a) Increasing the carrying amount to reflect interest on the lease liability;
(b) Reducing the carrying amount to reflect the lease payments made; and
(c) Re-measuring the carrying amount to reflect any reassessment or lease modifications or
to reflect revised in substance fixed lease payments or on the occurrence of other specific
events.
Interest on the lease liability in each period during the lease term is the amount that produces
a constant periodic rate of interest on the remaining balance of the lease liability. Interest
charges are included in finance cost in the statement of comprehensive income, unless the
costs are included in the carrying amount of another asset applying other applicable standards.
Variable lease payments not included in the measurement of the lease liability, are included
in operating expenses in the period in which the event or condition that triggers them arises.
Repayment of lease liabilities within financing activities in the cashflow statement include
both the principal and interest.
Short Term and Low Value Leases
The Group has made an accounting policy election, by class of underlying asset, not to recognise
lease assets and lease liabilities for leases with a lease term of 12 months or less (i.e.
short-term leases).
The Group has made an accounting policy election on a lease-by-lease basis, not to recognise
lease assets on leases for which the underlying asset is worth GBP5,000 or less (i.e. low
value leases).
Lease payments on short term and low value leases are accounted for on a straight-line bases
over the term of the lease or other systematic basis if considered more appropriate. Short
term and low value lease payments are included in operating expenses in the statement of comprehensive
income.
Share Capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value
of the cash or other resources received or receivable, net of the direct costs of issuing
the equity instruments. If payment is deferred and the time value of money is material, the
initial measurement is on a present value basis.
Defined Contribution Pension Obligation
The Group operates a defined contribution plan for its employees, under which the Group pays
fixed contributions into the PensionBee Personal Pension. Once the contributions have been
paid the Group has no further payment obligations.
The contributions are recognised as an expense in the statement of comprehensive income when
they fall due. Amounts not paid are shown in creditors as a liability in the statement of
financial position. The assets of the plan are held separately from the Group.
Share-based Payment
The cost of equity-settled transactions with employees is measured by reference to the fair
value of the equity instruments granted at the date at which they are granted and is recognised
as an expense over the vesting period, which ends on the date on which the relevant employees
become fully entitled to the award. Fair value is determined by using the market price of
the shares at a point in time adjacent to the issue of the award. In valuing equity-settled
transactions, no account is taken of any vesting conditions, other than conditions linked
to the price of the shares of the Group (market conditions) and non-vesting conditions. No
expense is recognised for awards that do not ultimately vest, except for awards where vesting
is conditional upon a market or non-vesting condition, which are treated as vesting irrespective
of whether the market or non-vesting condition is satisfied, provided that all other vesting
conditions are satisfied. At each balance sheet date before vesting, the cumulative expense
is calculated, representing the extent to which the vesting period has expired and management's
best estimate of the achievement or otherwise of non-market conditions and of the number of
equity instruments that will ultimately vest or in the case of an instrument subject to a
market condition, be treated as vesting as described above. The movement in cumulative expense
since the previous balance sheet date is recognised in the statement of comprehensive income,
with a corresponding entry in equity under the Share-based Payment Reserve.
Where the terms of an equity-settled award are modified, or a new award is designated as replacing
a cancelled or settled award, the cost based on the original award terms continues to be recognised
over the original vesting period. In addition, an expense is recognised over the remainder
of the new vesting period for the incremental fair value of any modification, based on the
difference between the fair value of the original award and the fair value of the modified
award, both as measured on the date of the modification. No reduction is recognised if this
difference is negative. Where an equity-settled award is cancelled, it is treated as if it
had vested on the date of cancellation, and any cost not yet recognised in the statement of
comprehensive income for the award is expensed immediately. Any compensation paid up to the
fair value of the award at the cancellation or settlement date is deducted from equity (Share-based
Payment Reserve), with any excess over fair value expensed in the statement of comprehensive
income.
The Company has established a Share-based Payment Reserve but does not transfer any amounts
from this reserve on the exercise or lapse of options. On exercise, shares issued are recognised
in share capital at their nominal value. Share premium is recognised to the extent the exercise
price is above the nominal value. Where the Company is settling part of the exercise price,
a transfer is made from retained earnings to share capital.
Research and Development
Research and development expenditure is recognised as an expense as incurred, except that
development expenditure incurred on an individual project is capitalised as an intangible
asset when the Group can demonstrate the technical feasibility of completing the intangible
asset so that it will be available for use or sale, how the asset will generate future economic
benefits, the availability of resources to complete development of the asset and the ability
to measure reliably the expenditure during development. Capitalised development costs are
recorded as intangible assets and amortised from the point at which the asset is ready for
use. The Group's research and development costs relate to costs incurred on projects carried
out to advance technology used to serve its customers. No development expenditure has been
capitalised during the years 2021 and 2022, on the basis that the specified criteria for capitalisation
has not been met, as costs spent on the development phase of projects cannot be reliably estimated.
All research and development costs are therefore recognised as an expense as incurred.
Impairment of Financial Assets
Measurement of Expected Credit Losses
Expected credit losses ('ECLs') are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate.
For trade and other receivables, the Group applies a simplified approach in calculating the
ECLs. Therefore, the Group recognises a loss allowance based on lifetime ECLs at each reporting
date.
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. Revenue
The analysis of the Group's Revenue for the year from continuing operations is as follows 2022 2021
GBP 000 GBP 000
Recurring Revenue 17,527 12,592
Other Revenue 135 161
17,662 12,753
--------- ----------
Recurring Revenue relates to revenue from the annual management fee charged to customers.
There are no individual revenues from customers which exceed 10% of the Group's total Revenue
for the year.
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 and, therefore, recognises one operating
and reporting segment with all revenue, losses before tax and net assets being attributable
to this single reportable business segment.
Further, the Group operates in a single geographical location only, being the United Kingdom.
5. Employee Benefits Expense
The aggregate payroll costs (including Directors' remuneration) were as follows: 2022 2021
GBP 000 GBP 000
Wages and Salaries 8,373 6,447
Social Security Costs 946 767
Pension Costs, Defined Contribution Scheme 235 203
--------- ---------
9,554 7,447
Share-based Payment Expense 1,898 3,939
--------- ---------
11,452 11,386
--------- ---------
The average number of persons employed by the Group (including Directors) during the year,
analysed by category, was as follows:
2022 2021
No. No.
Executive Management 9 9
Technology and Product 38 30
Marketing 15 9
Customer Service 90 85
Legal, Compliance and Risk 11 7
Administration and Other 22 15
------ ------
185 155
------ ------
6. Directors' Remuneration
The Directors' remuneration for the year
was as follows:
2022 2021
GBP 000 GBP 000
Remuneration 853 569
Group Contributions paid to Defined
Contribution Pension Schemes 10 6
--------------- --------------
863 575
--------------- --------------
During the year the number of Directors who were receiving benefits and
share incentives was
as follows:
2022 2021
No. No.
Members of Defined Contribution Pension
Schemes 5 3
In respect of the highest paid Director:
2022 2021
GBP 000 GBP 000
Remuneration 193 168
Group Contributions to Defined
Contribution Pension Schemes 2 2
Exercise of Share Options
2022 2021
GBP 000 GBP 000
Amount of Gains made on the Exercise of
Share Options 225 198
7. Other Expenses
Arrived at after charging:
2022 2021
GBP 000 GBP 000
Loss on Disposal of Equipment - 10
Auditor's Remuneration 196 187
Money Manager Costs 2,825 2,300
Other Expenses 8,047 6,365
----------- ----------
11,067 8,862
----------- ----------
Included in Other Expenses is technology and platform costs, professional services fees, irrecoverable
VAT, and general and administrative costs.
8. Finance costs
2022 2021
GBP 000 GBP 000
Interest Expense on
Lease Liabilities 43 7
Revolving Credit Facility
Fees - 1,409
Interest Expense on 3 -
Dilapidations Provision
Total Finance Costs 46 1,416
--------- ---------
9. Auditor's Remuneration
2022 2021
GBP 000 GBP 0000
Audit of the Company's Financial Statements 44 33
Audit of the Company's Subsidiary Financial
Statements 94 95
----------- ------------
Total Audit Fees 138 128
----------- ------------
Tax Advisory Services - 167
Audit Related Assurance Services 58 42
Other Assurance Services - 633
----------- ------------
Total Non-Audit Fees 58 842
----------- ------------
Auditor's remuneration has been shown net of VAT. Except for GBP61,000 (2021: GBP28,000) relating
to the half year review of the Group's financial statements and CASS audit and contained in
Audit Related Assurance Services, all non-audit fees are attributed to services received in
preparation for admission to the London Stock Exchange and have been recorded in listing costs.
No services were provided pursuant to contingent fee arrangements.
10. Tax
Tax charged/(credited) in the statement of comprehensive income: 2022 2021
GBP 000 GBP 000
Current Taxation
UK Corporation Tax (274) (348)
Deferred Taxation
Arising from Origination and Reversal of Temporary - -
Differences
Arising from Tax Rate Changes - -
Total Deferred Taxation - -
-------- ----------
Tax Credit in the Statement of Comprehensive Income (274) (348)
-------- --------
The tax on loss for the year was computed at the standard rate of corporation tax in the UK
of 19% (2021: 19%).
The differences are reconciled below: 2022 2021
GBP 000 GBP 000
Profit/(Loss) before
Tax (22,420) (24,979)
--------- ---------
Corporation Tax
at Standard Rate (4,260) (4,746)
Increase from effect of different UK - -
Tax Rates on some Earnings
Increase from effect of expenses not
deductable in determining Taxable Profit
(Tax Loss) 288 1,464
Capital Allowances (11) -
Share-based Payment 83 -
Deferred Tax Expense (Credit) from unrecognised
Tax Loss or Credit 3,900 3,282
Decrease from effect of adjustments in
Research Development Tax Credit (274) (348)
Total Tax Credit (274) (348)
--------- ---------
2022 2021
GBP 000 GBP 000
Fixed Assets (43) (13)
Temporary Difference - -
Trading
Total Deferred Tax
Liability (43) (13)
-------- --------
Losses available for offsetting
against Future Taxable Income 43 13
-------- --------
Total Deferred Tax
Asset 43 13
Net deferred tax - -
-------- --------
The Group has GBP72,755,000 of non-expiring carried forward tax losses at 31 December 2022
(2021: GBP38,629,000) against which no deferred tax has been recognised. A deferred tax asset
has not been recognised on the basis that there is insufficient certainty over the recovery
of these tax losses in the near future.
11. Earnings per Share
Basic earnings per share is calculated by dividing the loss attributable to ordinary equity
holders of the Group by the weighted average number of ordinary shares in issue during the
period.
Diluted earnings per share are calculated by dividing the loss attributable to ordinary equity
holders of the Group adjusted for the effect that would result from the weighted average number
of ordinary shares plus the weighted average number of shares that would be issued on the
conversion of all the dilutive potential shares under option. At each balance sheet date reported
below, the following potential ordinary shares under option are anti-dilutive and are therefore
excluded from the weighted average number of ordinary shares for the purpose of diluted earnings
per share. 2022 2021
Number of Potential Ordinary Shares 4,619,220 3,911,235
Profit/(Loss) Attributable to Equity Holders
of PensionBee Group plc (GBP) (22,146,000) (24,631,000)
Weighted Average Number of Shares Outstanding
during the Year 222,223,650 207,743,435
Basic and Diluted Earnings per Share (pence
per Share) (9.97) (11.86)
Basic Earnings per Share was (9.97)p for 2022 (2021: (11.86)p).
12. Property, Plant and Equipment
Fixtures Leasehold Computer Total
and Fittings Improvements Equipment
GBP 000 GBP 000 GBP 000 GBP 000
Cost
At 1 January 2021 71 126 198 395
Additions - - 69 69
Disposals (6) - (7) (13)
Transfers (5) - 5 -
At 31 December 2021 60 126 265 451
-------------- -------------- ----------- --------
At 1 January 2022 60 126 265 451
Additions 1 251 115 367
Disposals - - (17) (17)
At 31 December 2022 61 377 363 801
-------------- -------------- ----------- --------
Depreciation
At 1 January 2021 43 71 86 200
Charge for the year 12 55 60 127
Eliminated on Disposal - - (3) (3)
Transfers (4) - 4 -
At 31 December 2021 51 126 147 324
-------------- -------------- ----------- --------
At 1 January 2022 51 126 147 324
Charge for the year 7 50 77 134
Eliminated on Disposal - - (15) (15)
At 31 December 2022 58 174 209 443
-------------- -------------- ----------- --------
Carrying amount
At 31 December 2022 3 201 154 358
At 31 December 2021 9 - 118 127
-------------- -------------- ----------- --------
At 1 January 2021 28 55 112 195
-------------- -------------- ----------- --------
13. Right of Use Asset
GBP 000
At 1 January 2021 295
Additions 703
Disposals (295)
--------
At 31 December 2021 703
--------
At 1 January 2022 703
Additions 3
Disposals -
At 31 December 2022 706
--------
Depreciation
At 1 January 2021 177
Charge for the year 129
Eliminated on Disposal (295)
At 31 December 2021 11
--------
At 1 January 2022 11
Charge for the year 141
Eliminated on Disposal -
At 31 December 2022 152
--------
Carrying Amount
At 31 December 2022 553
--------
At 31 December 2021 692
--------
At 1 January 2021 118
--------
14. Trade and Other Receivables 2022 2021
GBP 000 GBP 000
Trade Receivables 1,565 1,335
Prepayments 903 887
Other Receivables 944 949
3,412 3,171
Trade and other receivables are measured at amortised cost and management assessed that the
carrying value is approximately their fair value due to the short-term maturities of these
balances.
15. Share Capital
Allotted, Called Up and Fully Paid Shares 2022 2021
No. 000 GBP 000 No. 000 GBP 000
Ordinary of GBP0.001
each 222,862 223 221,526 221
222,862 223 221,526 221
During the year, PensionBee Group plc issued ordinary shares from share options exercised
totaling 1,336,148 ordinary shares (2021: 8,138,194 ) of GBP0.001 each. The exercise price
for each exercised share option was GBP0.001 (2021: GBP0.001).
On 24 March 2021, PensionBee Group plc acquired all the issued shares of PensionBee Limited
through a share for share transaction. Every issued share in PensionBee Limited was exchanged
for 800 shares in PensionBee Group plc. Every share option was cancelled and replaced by 800
share options. Through the Group Reorganisation, PensionBee Group plc issued 180,054,400 ordinary
shares of GBP0.001 each and reduced its share premium to create additional distributable reserves.
On 26 April 2021, PensionBee Group plc issued 33,333,333 ordinary shares of GBP0.001 each
as part of its Initial Public Offering ('IPO'). Each share was issued at GBP1.65. Transaction
costs incurred and directly attributable to the issuance of shares for the IPO amounted to
GBP1,748,000. These costs were recognised as a reduction to the share premium.
Each ordinary share carries one vote per share and ranks pari passu with respect to dividends
and capital.
16. Reserves
Share Premium
The share premium account represents the excess of the issue price over the par value on shares
issued, less transaction costs arising on the issue.
Share-based Payment Reserve
The Share-based Payment Reserve is used to recognise the value of equity-settled share-based
payments provided to employees, including key management personnel, as part of their remuneration.
Retained Earnings
The balance in the retained earnings account represents the distributable reserves of the
Group.
17. Leases
In December 2021, the Group entered into a new property lease with a 5-year lease term ending
in December 2026 with an option to terminate the lease after three years. The Group is reasonably
certain that this option will not be exercised therefore the lease term was determined to
be five years. On inception, the lease liability was determined using a discount rate linked
to London office rental yields, adjusted for risk premium for certain company specific factors
as well as taking into consideration the interest rate associated with the revolving credit
facility entered in March 2021 and cancelled in September 2021. The discount rate was 7%.
Lease terms have not been amended since inception.
The carrying amounts of right-of-use assets recognised and the movements during each year
are set out in Note 13. Set out below are the carrying amounts of lease liabilities and the
movements during the year.
2022 2021
GBP 000 GBP 000
As at 1 January 657 109
Additions - 654
Accretion of interest 43 7
Cash flow timing adjustment 2 -
Payments (151) (113)
As at 31 December 551 657
Lease Liabilities included in the Statement of Financial Position: 2022 2021
GBP 000 GBP 000
Non-current 397 560
Current 154 97
551 657
The following are the amounts recognised in the Statement of Comprehensive Income:
2022 2021
GBP 000 GBP 000
Depreciation on Right of Use
Asset 141 129
Interest on Lease Liability 43 7
Low Value Leases - -
184 136
18. Provisions 2022 2021
GBP 000 GBP 000
Dilapidations
At 1 January 2022 43 -
Additional Provisions - 43
Interest 3 -
At 31 December 2022 46 43
Non-current Liabilities 46 43
The Group is required to restore the leased premises of its offices to their original condition
at the end of the lease term. The lease term ends on 2 December 2026. A provision has been
recognised at the present value of the estimated expenditure required to remove any leasehold
improvements. These costs have been capitalised as part of the Right of Use Asset and are
amortised over the useful life of the asset.
19. Trade and Other Payables 2022 2021
GBP 000 GBP 000
Trade Payables 132 356
Accrued Expenses 1,301 1,873
Social Security and Other Taxes - 83
Other Payables 83 716
1,515 3,028
Trade and other payables are measured at amortised cost and management assessed that the carrying
value is approximately their fair value due to the short-term maturities of these balances.
20. Pension and Other Schemes
The Group operates a defined contribution pension scheme. The pension cost charge for the
year represents contributions payable by the Group to the scheme and amounted to GBP235,000
(2021: GBP203,000).
21. 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 have passed their probation period at the Group. The exercise price of all share
options is GBP0.001 per share.
The share options normally vest on the later of 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.
The weighted average fair value of share options granted during the year of grant was GBPnil
(2021: GBP1.65).
In the prior period, share options could be exercised upon the occurrence of an exit event,
a takeover, reconstruction, liquidation and sale of the business, to the extent they have
vested. In the event that there has been no exit event before the tenth anniversary of the
date of grant, the Directors may determine that an option holder may exercise their option
in the 30 day period before such anniversary.
Following the listing of the Company in 2021, share options can be exercised upon satisfying
the service condition.
The movements in the number of share options during the year were as follows:
2022 2021
Number Number
Outstanding, start of the year 3,911,235 15,293
Outstanding after Group Reorganisation - 12,234,400
Granted during the year - 312,000
Exercised during the year (1,297,359) (8,463,383)
Expired during the year (169,472) (171,782)
Outstanding, end of the year 2,444,404 3,911,235
The weighted average share price on date of exercise of share options exercised during the
year was GBP1.05 (2021: GBP1.64) and the weighted average remaining contractual life is one
year and six months (2021: two years and five months).
Deferred Share Bonus Plan
Scheme Details and Movements
Under the PensionBee Deferred Share Bonus Plan ('DSBP'), 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. DSBP awards are granted at the end of the financial year once the annual bonus outturn
has been determined. The exercise price of all DSBP awards is GBP0.001 per award.
For the two Executive Directors that were in office as of 31 December 2021 their 2022 granted
DSBP awards cliff vest on the third anniversary of the date of grant. For the rest of the
employees and the subsequent grants, DSBP awards vest in three equal installments over a service
period of three years from grant date. DSBP awards vest upon satisfying the service condition.
The fair value of the DSBP awards is the share price on grant date. DSBP awards can be exercised
to the extent they have vested.
The weighted average fair value of awards granted during 2022 was GBP1.44 (2021: GBPnil).
The movements in the number of awards during the year were as follows: 2022 2021
Number Number
Outstanding, start of the year - -
Granted during the year 944,508 -
Exercised during the year - -
Lapsed during the year (54,957) -
Outstanding, end of the year 889,551 -
There were no exercises during the year (2021: nil) and the weighted average remaining contractual
life is one year and five months.
Long Term Incentives
Scheme Details and Movements
Under the PensionBee Long Term Incentives ('LTI'), 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. LTI awards are granted in the subsequent year following
a bonus grant. The exercise price of all LTI awards is GBP0.001 per award.
The awards vest in tranches, a third of the 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 LTI awards is the share price on grant date discounted for restricted
selling period. LTI awards can be exercised to the extent they have vested.
The weighted average fair value of awards granted during 2022 was GBP1.38 (2021: GBPnil).
The movements in the number of awards during the year were as follows: 2022 2021
Number Number
Outstanding, start of the year - -
Granted during the year 1,311,681 -
Exercised during the year - -
Lapsed during the year (26,415) -
Outstanding, end of the year 1,285,266 -
There were no exercises during the year (2021: nil) and the weighted average remaining contractual
life is three years and three months.
Charge/Credit arising from Share-based Payment
The total charge for the year for the Share-based Payment was GBP1,898,000 (2021: GBP3,939,000),
all of which related to equity-settled share-based payment transactions.
22. Financial Risks Review
This note presents information about the Group's exposure to financial risks and the Group's
management of capital. Financial risk exposure results from the operations of the Subsidiary.
The Company is not trading and therefore is structured to avoid, in so far as possible, all
forms of financial risk.
Financial Risk Management Objectives
The Group has identified the financial risks arising from its activities and has established
policies and procedures to manage these risks in accordance with its risk appetite. These
risks included market risk, credit risk and liquidity risk. The Group does not enter or trade
financial instruments, including derivative financial instruments. Assisted by the Audit and
Risk Committee, the Board of Directors has overall responsibility for establishing and overseeing
the Group's risk management framework and risk appetite.
The Group's financial risk management policies are intended to ensure that risks, including
emerging risks are identified, evaluated and subject to ongoing close monitoring and mitigation
where appropriate. The Board of Directors regularly reviews financial risk management policies,
procedures and systems to reflect changes in the business, risk horizon, markets and financial
instruments used by the Group. The Group's senior management is responsible for the day-to-day
management of these risks in accordance with the Group's risk management framework.
Market Risk
Market risk is the risk that the fair value or future cash flows of financial instruments
will fluctuate because of changes in market prices. Market risk comprises three types of risk:
interest rate risk, currency risk and price risk.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. The Group considers interest rate
risk to be insignificant due to no debt and no interest-bearing assets.
On 22 March 2021, the Group entered into a revolving credit facility for up to GBP10 million
with National Westminster Bank plc as part of prudent capital management to provide it with
further liquidity resources going forward. On 20 September 2021, management decided to close
the facility on the basis that the additional liquidity resources were no longer required.
No amounts were drawn from the facility during the period in which the credit was available.
Amounts charged to the 2021 income statement in respect of the cost of this facility totaled
GBP1,409,000 for the year.
Price Risk
As the main source of revenue is based on the value of assets under administration (Assets
under Administration ('AUA') is a measure of the total assets for which a financial institution
provides administrative services). The Group has an indirect exposure to price risk on investments
held on behalf of customers. These assets are not on the Group's statement of financial position.
The risk of lower revenues is partially mitigated by asset class diversification. The Group
does not hedge its revenue exposure to movements in the value of customers assets arising
from these risks, and so the interests of the Group are aligned to those of its customers.
A 10% change in equity markets would have an approximate 7.5% impact on revenue. The 10% change
in equity markets is a reasonable approximation of possible change.
Credit Risk
Credit risk is the risk that a counterparty will be unable to pay amounts in full when due.
The Group's exposure to credit risk arises principally from its cash balances held with banks
and trade receivables. The Group's trade receivables are the contractual cashflow obligations
that the payors must meet. The payors are BlackRock, Legal & General, and State Street Corporation
which are high credit rated financial institutions. Assets they hold on behalf of the Group
are a small percentage of their net assets and on this basis credit risk is considered to
be low. Utilising the simplified approach the Group has shown there is no expected credit
loss due to no historic credit losses, and no material need for a lifetime loss allowance.
At the end of the reporting period no assets were determined to be impaired and there was
no balance past due.
In certain cases, the Group may also consider a financial asset to be in default when internal
or external information indicates that the Group is unlikely to receive the outstanding contractual
amounts in full. A financial asset is written off when there is no reasonable expectation
of recovering the contractual cash flows.
Due to the Group's financial assets primarily being trade receivables which all have an expected
lifetime of less than 12 months, the Group has elected to measure the expected credit losses
at 12 months only.
Set out below is the information about the credit risk exposure on the Group's trade receivables:
Days Past Due
Current < 30 days 30-60 days 61-90 days >91 days Total
31-Dec-22 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
Gross Trade
Receivables 1,565 - - - - 1,565
Other
Receivables 540 - - - 404 944
Days Past Due
Current < 30 days 30-60 days 61-90 days >91 days Total
31-Dec-21 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000 GBP 000
Gross Trade
Receivables 1,335 - - - - 1,335
Other
Receivables 348 - - - 601 949
The Group's trade receivables are concentrated in the three money managers 2022 2021
% %
BlackRock 73% 71%
State Street Corporation 16% 16%
Legal & General 11% 13%
Total 100% 100%
------ ------
Other receivables comprise R&D tax credit due from HMRC, office rental deposit and amounts
due from a related party (PensionBee Trustees). The probability of default by these parties
is deemed low. The credit risk on liquid funds financial instruments is limited because the
counterparties are banks with high credit-ratings assigned by international credit-rating
agencies. The Group's principal Bank is Barclays Bank. The Group only uses banks with a credit
rating of at least BBB+ (Standard & Poor's). The Group's liquid funds are concentrated in
Barclays, which hold 94% of the total balance as at year end (2021: 93%).
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations
to settle its liabilities. This is managed through cash flow forecasting.
Undiscounted Maturity Analysis
The following table sets out the remaining contractual maturities of the group's financial
liabilities by type:
Within Between After Total
1 year 1 and 5 more than
years 5 years
2022 GBP 000 GBP 000 GBP 000 GBP 000
Trade and Other Payables 1,515 - - 1,515
Lease Liabilities 186 438 - 624
Within Between After Total
1 year 1 and 5 more than
years 5 years
2021 GBP 000 GBP 000 GBP 000 GBP 000
Trade and Other Payables 3,028 - - 3,028
Lease Liabilities 140 636 - 776
Capital Risk Management
For the purpose of the Group's capital management, capital includes issued capital, share
premium and all other equity reserves attributable to the equity holders of the parent.
The primary objective of the Group's capital management is to maximise the shareholder value.
The Group manages its capital structure and makes adjustments considering changes in economic
conditions. To maintain or adjust the capital structure, the Group may return capital to shareholders
or issue new shares.
Externally Imposed Capital Requirements
The capital adequacy of the business is monitored on a quarterly basis as part of general
business planning by the finance team. The Group conducts a capital adequacy assessment process,
as required by the Financial Conduct Authority ('FCA') to assess and maintain the appropriate
levels.
23. Related Party Transactions
Key Management Compensation 2022 2021
GBP 000 GBP 000
Salaries and Other Short-term Employee
Benefits 1,752 1,428
Other Long-term Benefits 24 21
Share-based Payment 1,222 2,489
2,998 3,938
Related Party - PensionBee Trustees
The following related party transactions occur between the Company and PensionBee Trustees
Limited:
(i) Payment of the PensionBee Trustees Limited bank fees on a quarterly basis. During the
year bank fees amounted to GBP52,000 (2021: GBP15,000). There was no outstanding balance at
year end (2021: GBPnil).
(ii) Compensation payments as a gesture of goodwill to customers that prefer to be compensated
via a pension contribution or the purchasing of additional units. During the year, these costs
amounted to GBP11,000 (2021: GBP16,000). There was no outstanding balance at year end (2021:
GBPnil).
(iii) Other payments to customers (e.g. referral rewards). Payments are made from the Company
and invested into the customer's fund from the PensionBee Trustees account. These payments
can be found in 'Other Expenses' and 'Advertising and Marketing'. During the year these costs
amounted to GBP379,000 (2021: GBP314,000). There was no outstanding balance at year end (2021:
GBPnil).
Transactions with Directors
During the year ended 31 December 2022, Mark Wood repaid GBP105,279 to the Subsidiary in respect
of a payment to HMRC made by the Group on his behalf in the prior year.
24. Events After the Reporting Period
There were no events of material impact to the financial statements that occurred after the
reporting date.
25. Alternative Performance Measures
The Company uses a variety of alternative performance measures ('APMs') which are not defined
or specified by IFRS, in particular Adjusted Earnings Before Interest, Taxes, Depreciation
and Amortisation ('Adjusted EBITDA'). The Directors use a combination of APMs and IFRS measures
when reviewing the performance and position of the Company and believe that each of these
measures provides useful information with respect to the Company'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 Company.
The APMs used by the Company are defined below and reconciled to the related IFRS financial
measures:
Adjusted EBITDA
Adjusted EBITDA represents loss for the year before taxation, finance costs, depreciation,
share-based compensation and listing costs.
Adjusted EBITDAM
Adjusted EBITDAM represents loss for the year before taxation, finance costs, depreciation,
advertising and marketing, share based compensation and listing costs. 2022 2021
GBP 000 GBP 000
Operating Profit/(Loss) (22,374) (23,563)
Depreciation Expense 276 256
Share-based Payment (1) 1,898 3,939
Listing Costs (2) 687 2,947
--------- ---------
Adjusted EBITDA (19,513) (16,421)
--------- ---------
Marketing Costs 16,554 12,865
--------- ---------
Adjusted EBITDA before Marketing (2,959) (3,556)
--------- ---------
(1) Relates to total annual charge in relation to Share-based Payment expense as detailed
in Note 21.
(2) 2022 Listing Costs relate to expenses incurred in relation to the preparation for the
transfer from the High Growth Segment to the Premium Segment of the Main Market of the London
Stock Exchange (2021: preparation for admission to the High Growth Segment of the London Stock
Exchange).
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 Director)
Michelle Cracknell CBE (Independent Non-Executive
Director)
Lara Oyesanya FRSA (Independent Non-Executive
Director)
--------------------------------------------------
Company Secretary Michael Tavener
--------------------------------------------------
Registered Number 13172844
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Registered Office 209 Blackfriars Road
London
SE1 8NL
United Kingdom
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Auditor Deloitte LLP
4 Brindley Place
Birmingham
B1 2HZ
United Kingdom
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END
FR GPUPUWUPWUUQ
(END) Dow Jones Newswires
March 16, 2023 03:00 ET (07:00 GMT)
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