- Highly-valued market debutant posts solid update
- Client assets more than double in a year to £2bn
PensionBee (PBEE) saw net inflows, client assets and annual run-rate revenues all more than double in the 12 months to June, in a reassuring inaugural trading update from one of this year’s most highly-valued public market debutants.
With assets under administration (AUA) now at £2bn, up from £1.36bn at the start of the calendar year and £1.65bn at the end of March, the pension consolidation platform provider now trades at 29 times’ forward sales.
That compares to around 12 times for established self-directed investment platforms like Hargreaves Lansdown (HL.) and AJ Bell (AJB).
The hope of backers including passive giant State Street and Baillie Gifford’s British Smaller Companies fund, who were tapped for £55m in April’s IPO, is that this explosive growth can be maintained, preventing the need for further support from equity or debt markets.
Rising marketing costs mean the group remains loss-making, though it continues to target “a path to profitability by the end of 2023” and a premium listing on the LSE’s main market in 2022.
“It’s going to plan,” founder and chief executive Romina Savova told Investors’ Chronicle. She added that marketing spending will climb further this year as the group rolls a new national brand campaign.
This will keep up the pressure to win and then convert new customers into investors on the company's platform, a process which currently costs £240 per client win.
But the wind is currently in PensionBee’s wings. The rise in client funds to date, helped by £482m of net inflows and positive market movements of £148m in the six months to June, suggests the company is on course to beat broker Keefe, Bruyette & Woods’ forecast for AUA of £2.38bn by the end of 2021.
Shares in the group climbed 5 per cent to 168p following the update and back above a debut price of 165p. This means PensionBee trades on around 20 times KBW’s forecast profits for 2025, which we still view as a toppy valuation. But this remains a high-growth stock to watch.
