PensionBee Group plc

Incorporated in England and Wales

Registration Number: 13172844

LEI: 2138008663P5FHPGZV74

ISIN: GB00BNDRLN84

13 March 2024

PensionBee Group plc

Full Year Results for the year ended 31 December 2023

Successful strategy drives strong performance for 2023 

Adjusted EBITDA Profitability in Q4 2023 underpins expected UK profitability for FY 2024

Proposed US expansion marks next phase of corporate journey

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 2023. 

Highlights 

Romi Savova, Chief Executive Officer of PensionBee, commented: 

"We are pleased to report strong full year results for 2023, having reached £4.4 billion of Assets under Administration. PensionBee has firmly established itself as a household brand name across the UK, synonymous with easy and effective pensions management for consumers, helping approximately 230,000 customers across the UK to become Pension Confident.

Having met our longstanding and ambitious goal of achieving Adjusted EBITDA profitability across the fourth quarter of 2023, we are confident in our continued growth, underpinned by profitability. Our trusted brand, award-winning customer proposition and distinctive combination of smart technology and dedicated customer service will see us continue to become the provider of choice for our customers and grow our market share in the UK.

As we fast approach our 10 year anniversary, we have announced our proposed expansion into the US, the world's largest Defined Contribution pension market, where we see an enormous opportunity to assist many consumers in the US who also struggle to prepare adequately for retirement as they navigate a complex and confusing pensions landscape. We believe that the simplicity we bring through our customer proposition will resonate well with the US consumer, and see this as an exciting next step in our journey to help everyone save for a happy retirement." 

For definitions, see Managing our Performance section.

ppt - A ppt is a percentage point. A percentage point is the unit for the arithmetic difference of two percentages.

* PensionBee's Key Performance Indicators include an alternative performance measure ('APM') which is Adjusted EBITDA. APMs are not defined by International financial Reporting Standards ('IFRS') and should be considered together with the Group's IFRS measurements of performance. PensionBee believes this APM assists in providing greater insight into the underlying performance of PensionBee and enhances comparability of information between reporting periods.

Guidance and Outlook

The Board remains confident in PensionBee's potential for continued growth and profitability, due to a combination of the strength and stability of its existing customer base, together with its ability to attract new customers that generate growth in recurring Revenue through its scalable technology platform.

The Company is pleased to reiterate the guidance for the UK, confirming that it will aim to deliver sustained, high Revenue growth. While the Company has demonstrated significant growth to date, the Board remains of the view that the focus on the mass market of pension savers will enable it to deliver substantial further growth as the Company aims to pursue a c.2% market share of the £1.2 trillion transferable pensions market over the next 5-10 years. The Company is aiming to onboard 1 million Invested Customers with pension pots of £20,000-£25,000, creating a Revenue ambition of c.£150m in the long term. 

At the same time, given that the Company has invested in its brand and technology over many years, and achieved ongoing Adjusted EBITDA profitability in the final quarter of 2023, it is poised to continue delivering increasingly profitable growth over the medium to long term. The Company's primary financial goal is to deliver Adjusted EBITDA profitability for the full year 2024, measuring this across the year as opposed to over individual quarters. Looking ahead to the next few years after 2024, the Company expects to grow its marketing investment and invest in growth, whilst maintaining its focus on profitability as an underpin with an ambition to achieve long-term Adjusted EBITDA Margins of over 50%.

The recently announced proposed US expansion in partnership with a large, US-based global financial institution will see the US-based partner providing its expertise and substantial marketing funding to the US business. Correspondingly, PensionBee's financial contribution will be financed from the existing resources of PensionBee Group plc, and as a result the US business does not change the existing guidance in the UK.

Current Trading

Trading in 2024 to date has seen positive momentum, with the Company tracking well against its objectives, which are to increase Net Inflows in absolute terms and Net Inflows per £ of marketing spend as compared to 2023.

Analyst, Investor and Press Presentation 

A copy of the 2023 Full Year Results announcement and presentation will be made available post-market close on 13 March 2024 for download at: pensionbee.com/investor-relations/results-and-reports. A recording of the presentation will follow.

There will be a webcast presentation hosted by Romi Savova (CEO) and Christoph J. Martin (CFO) for analysts, investors and press on Wednesday 13 March at 5:00pm UK (GMT) / 1:00pm US (EST). 

Please contact [email protected] if you would like to attend. 

Alternatively you can register and access the webcast with the following links: 

Webcast Link: Webcast for video presentation

Conference Call Link: Conference call for Q&A

Investor Meet Company Presentation 

Romi Savova and Christoph J. Martin will also provide a live presentation relating to the Full Year Results via Investor Meet Company on 15 March 2024 at 2:00pm UK (GMT) / 10.00am US (EST).

The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 2:00pm UK (GMT) / 10.00am US (EST) on 14 March 2024, or at any time during the live presentation.

Investors can sign up to the Investor Meet Company for free and add to meet PensionBee via:

investormeetcompany.com/pensionbee-group-plc/register.

Investors who already follow the Company on the Investor Meet Company platform will automatically be invited.

Enquiries 

PensionBee

Becky O'Connor

Laura Dunn-Sims

Steven Kennedy

[email protected]

  +44 20 3557 8444

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 UK Defined Contribution market, which exceeds £1 trillion of 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 £4.4bn in Assets Under Administration and 229,000 Invested Customers as at 31 December 2023. PensionBee has consistently maintained a Customer Retention Rate in excess of 95% and an Excellent Trustpilot rating (from more than 10,000 customers), reflecting its commitment to outstanding customer service. 

PensionBee is admitted to trading on the Premium Segment of the London Stock Exchange's Main Market (LON:PBEE).

Forward Looking Statements

Statements that are not historical facts, including statements about PensionBee's or management's beliefs and expectations, are forward-looking statements. The 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 

"2023 was not only a year of transition, but also a year of transformation… PensionBee had a longstanding and ambitious goal of reaching ongoing monthly Adjusted EBITDA profitability by the end of 2023, which we met. 

We focused on the key elements of our strategy that together make us the pension provider of choice for our customers: our brand and marketing capability, our innovative product offering, our leading customer service, our scalable technology platform and our purpose-built investment range."

Dear fellow shareholder, 

2023 was not only a year of transition, but also a year of transformation. We began the year with an uncertain economic backdrop. Interest rates were hitting highs not seen in decades and consumer sentiment was shaken. The war in Ukraine, simmering geopolitical tensions and the cost of living crisis were taking their toll. 

Nevertheless, PensionBee had a longstanding and ambitious goal of reaching ongoing monthly Adjusted EBITDA profitability by the end of 2023, which we met.¹ We focused on the key elements of our strategy that together make us the pension provider of choice for our customers: our brand and marketing capability, our innovative product offering, our leading customer service, our scalable technology platform and our purpose-built investment range. As a result, we are proud to have ended the year with Assets under Administration of £4.4bn representing annual growth of 44% (2022: £3.0bn), Revenue of £23.8m representing annual growth of 35% (2022: £17.7m) and having achieved Adjusted EBITDA profitability across the fourth quarter of 2023.¹ 

Our strategy and £55m of investment in marketing since inception has seen us firmly established as a household brand name, enabling us to start 2023 with a majority of UK consumers having already heard of PensionBee. Historic investments in high profile advertising campaigns in train stations, on tube panels and on taxis has embedded PensionBee into the consciousness of the consumer. In 2023, we centred our brand awareness activities on the most economical impressions, achieved through radio, television and sports sponsorship. Having done the hard work of teaching consumers about PensionBee and often about pension consolidation and the general importance of saving for a happy retirement, we aspired to keep PensionBee top of mind. We complemented our refined brand strategy with performance marketing led by our data insights, with strong results: our brand awareness was stable at 50%² and our 2023 cumulative Cost Per Invested Customer ('CPIC') was £241 (2022: £248), continuing a downward trajectory through the achievement of an in-period CPIC of £213 for 2023 (2022: £251) - both well within our publicly communicated CPIC threshold of £200-250.¹  

While acquiring new customers is crucial to our growth, serving them for decades to come and maintaining our Customer Retention Rate of over 95% is crucial to our business. With this in mind, we continued to invest in our product experience. We released in-product content for our customers, enabling them to enjoy customised articles based on their profiles and access to our award-winning Pension Confident Podcast, packed with helpful financial tips. We invested in tooling to help our customers plan for the future, including a tax relief calculator, a state pension calculator and an inflation calculator. For our at-retirement customers, we introduced functionality for regular in-app withdrawals and the functionality for customers to take a salary through retirement. We also launched our life insurance partnership with LifeSearch, taking a broader view of our customers' needs for retirement planning and helping them to protect themselves and their loved ones should the worst happen. As a result, we maintained an impressive average app store rating at 4.7 out of 5 (4.8 App Store rating and 4.5 Google Play rating) (2022: 4.6) and a Customer Retention Rate of over 95% (2022: >95%).³ 

Key to managing in any economic environment, but especially in the volatile one we have found ourselves in for the last few years, is the provision of excellent customer support. At PensionBee we celebrated the arrival of the Financial Conduct Authority's Consumer Duty, in the hope that it would raise standards across the board in the pensions sector, improving consumer trust and confidence in retirement savings. Our customer duty is firmly embedded in everything we do and especially in our customer service, where we strive to be available to our customers and to offer them the information they need, when they need it. We continued to maintain industry-leading call queue times of 23 seconds (2022: 115 seconds) and a Trustpilot rating of 4.6★ based on approximately 10,000 reviews (2022: 4.6★).⁴ In 2023, we even took PensionBee on the road around the UK, visiting customers in London, Brighton, Birmingham, Manchester and Glasgow. 

In a year where achieving Adjusted EBITDA profitability was a primary goal, a focus on cost efficiency was of paramount importance. In technology, the best way to maintain cost efficiency is to ensure scalability by design and to invest in automation. Having built our technology on cloud native platforms since inception, we have further automated pension transfers and transactions in an often paper-based industry. This year we continue to invest in the straight-through-processing of pension transfers and seamless contributions through Easy Bank Transfer (our capability of initiating a pension top up in under 60 seconds directly from a customer's bank). We maintained the security of our technology platform, becoming recertified to ISO 27001, a global information security standard.

Finally, we prioritised our investing solution range and with a significant proportion of our customers desiring investments that make a difference in the world, we introduced our Impact Plan in February 2023. Investing exclusively in companies with a proven and measurable impact, the plan enables our customers to solve the world's great social and environmental problems while growing their pensions for the long term. We secured Voting Choice and began voting on 85% of our asset base (Tailored, Tracker and 4Plus) through the ISS SRI Policy, reflecting the views of our customers in key decisions at the companies they own through their pensions.⁵ We were pleased to receive another Excellent Value for Money score for our at-retirement product range from our Governance Advisory Arrangement. 

While these have been the key pillars of our success to date, it is clear that a new strategic pillar has gained importance in our internal dialogue: Resilience. Having achieved Adjusted EBITDA profitability in the fourth quarter of this year, we are well positioned to continue to grow our market share from a position of trust.¹ Key to that growth is the ability to maintain the security and operational resilience of our infrastructure for the benefit of our customers. We will continue to deploy extensive resources in this area with a particular focus on cyber security. 

Proposed US Expansion

We have also recently announced our plans to expand into the United States of America ('US'), having taken an important step by entering into an exclusive, non-binding term sheet with a large, US-based global financial institution. 

The US has the world's largest Defined Contribution pension market, representing approximately 80% of the global total and $22.5 trillion in assets.⁶ However, many consumers still struggle to prepare adequately for retirement amidst an array of confusing and difficult to use investment options. Given the context of the enormous US market opportunity, we see the potential for our US business to grow rapidly, becoming at least the size of its UK business over the next decade.

Under the proposed strategic relationship, PensionBee will deliver the US service through PensionBee Inc, a yet to be established wholly-owned subsidiary of PensionBee Group plc. PensionBee Inc will be established in Delaware, with operational headquarters in New York. We will manage the operations of the US business, including the hiring of a local team, making available our award-winning online retirement proposition and UK-based proprietary technology to consumers in the US Defined Contribution market. We will enable US consumers to easily consolidate and roll over their 401(k) plans into a new Individual Retirement Account ('IRA').⁷

Our US-based partner will provide its expertise and substantial marketing funding. Correspondingly, our financial contribution will be financed from the Company's existing resources. Entry into a final binding agreement between the parties is subject to confirmatory due diligence, legal documentation and regulatory approvals, with launch expected in late 2024.

Looking Forward

As we look forward to 2024, we continue to be inspired by the size and opportunity within the UK Defined Contribution pension market. Our latest analysis indicates the UK Transferable Pension Market now exceeds £1 trillion of assets and that more and more consumers are consolidating their pensions than before. As a result of our relentless focus on the consumer and their needs, we will continue to grow our market share in the UK. 

We are also excited to progress our plans for the US, the world's largest Defined Contribution pension market, with $22.5 trillion of assets. This transformative step for the Company will help millions of US consumers look forward to a happy retirement. 

With our established brand and proven scalable technology platform, we remain committed to serving consumers and growing PensionBee for the success of all our stakeholders. As we approach our 10 year anniversary since PensionBee was founded, we look forward to 2024 being another exciting year for us.

Romi Savova

Chief Executive Officer

13 March 2024

Operating and Financial Review¹ 

The achievement of Adjusted EBITDA profitability across the fourth quarter of 2023 was owing to a combination of continued significant growth, the scalability of our technology platform and cost discipline

Trading for the financial year 2023 has been strong and in line with guidance, with high levels of growth achieved across our key performance indicators ('KPI's) along with the achievement of Adjusted EBITDA profitability across the fourth quarter of the year, fulfilling one of our core financial objectives. We achieved this objective by virtue of our continued growth in terms of new customers and strong net inflows from both new and existing customers, through the inherent scalability of our technology platform and with continued cost discipline. We have continued to demonstrate particular strength in customer growth, with the number of Invested Customers ('IC') increasing by 25% to 229,000 (2022: 183,000) and Assets under Administration ('AUA') increasing by 44% to £4.4bn (2022: £3.0bn). This was underpinned by strong Net Flows of £857m (2022: £863m) from new and existing customers together with positive market performance.² Revenue for 2023 increased by 35% to £23.8m (2022: £17.7m). Profit/(Loss) before Tax for 2023 was £(10.7)m (2022: £(22.4)m). 

This year we continued to realise the benefits of our prior investment, fulfilling our growth strategy, driving strong customer acquisition with less spend than the previous year. Marketing spend in 2023 was £9.7m (2022: £16.6m), bringing our cumulative marketing expenditure to more than £55m, highlighting our commitment to investing in brand awareness while reducing our overall Cost per Invested Customer ('CPIC'). Our investment in the brand to date has helped to cement PensionBee as a household name, with brand awareness of 50%.4 Our customer acquisition strategy continues to be led by our in-house Data Platform which provides extensive and invaluable insights, guiding decision-making and the optimisation of our performance marketing channels. Our focus has been on driving customer acquisition supported by insights from our data capability. With this approach, we are able to more effectively and accurately target customers who are likely to convert - a key reason why we were able to grow our Invested Customer base by 25% to 229,000 (2022: 183,000).

Our data-led, multi-channel approach to marketing focuses on trusted and cost-effective channels. Through YouTube and Tik Tok, we have successfully reached millions of customers. We brought educational initiatives to customers in ways that increase appeal and brand recognition, for example, through in-person roadshows and our Lovie award nominated Pension Confident Podcast. In addition, we maintained our brand name recognition through the renewal of our partnership with Brentford Football Club ('Brentford FC'). We have remained the official pension partner sponsor, and have become the left sleeve sponsor for the Men's first team and the 'front of shirt' sponsor for the B team, Academy and Women's team. Partnering with a Premier League team has helped the PensionBee brand to reach millions of football spectators across the UK, building customer trust in the process. 

As guided, the Cost per Invested Customer ('CPIC') has extended its downward trajectory this year. This can be attributed to our increased brand awareness as a result of prior investment in marketing as well as our data-driven acquisition capabilities, which have enabled us  to acquire customers efficiently. In 2023, we grew our Invested Customer base by 25%, with CPIC declining to £241 (2022: £248). Continuing on this downward trajectory will be instrumental in driving ongoing sustainable long-term Adjusted EBITDA profitability.1 

In 2023, we delivered 44% year-on-year growth in our AUA base from £3,025m to £4,350m. This demonstrated our ability to continue to execute on our growth strategy, whilst simultaneously meeting our profitability targets. We drove AUA growth primarily through acquiring new customers, building trust and aiming to be the main pension provider of choice for our customers. Our product, which includes various tools, features and capabilities, helps our customers feel more 'Pension Confident' as they plan for a happy retirement. This is supported by our high Retention Rate of existing customers, which continues to be more than 95%. We recorded £1.2bn of Gross Inflows this year (2022: £1.1bn). 

Across the year we acquired 46,000 Invested Customers (2022: 66,000), from which we generated £729m of Net Flows (2022: £685m Net Flows from New Customers). Leveraging our strong brand awareness, coupled with our data-driven customer acquisition capability, we were able to generate a 7% year-on-year increase in Net Flows from New Customers, even though we reduced marketing expenditure by 41% over the same period. Additionally, the customers we acquired in 2023 had a higher average age, and by extension, a higher incoming pension pot size. 

We translated strong year-on-year AUA growth of 44% for 2023 (2022: 17%) into Revenue growth of 35%, reaching £23.8m (2022: £17.7m), by virtue of our resilient Realised Revenue Margin (the annual management fee after discounts) of 0.64% (2022: 0.63%). 

Since the vast majority of our Revenue is derived from annual management fees charged as a percentage of AUA, the high retention of Invested Customers and AUA makes the overwhelming majority of our Revenue recurring in nature. Revenue is also inclusive of revenue generated from other activities, including our partnership with intermediaries such as LifeSearch, as well as ad-hoc income, although this currently represents an immaterial portion of our overall Revenue.

Our Technology Platform

During 2023, we continued to make further investments into enhancing the capabilities of our modern, scalable and secure proprietary technology, to help position PensionBee for future growth. Our cloud-based, API-driven platform allows for a granular level of optimisation, enabling us to deliver new innovative features, refinements and increased automation at pace. The scalability of our technology platform is highlighted by the achievement of a year-on-year decrease in Technology Platform Costs & Other Operating Expenses as a percentage of Revenue from (101)% in 2022 to (80)% in 2023 driven in part by a reduction in Other Operating Expenses to £(6.8)m (2022: £(8.2)m). Continuing on this trajectory of improving cost efficiency is central to driving long-term operating leverage.  

The Company has continued to invest in the scalability of its technology platform through a focus on internal automation, efficiency, security and pension transfer improvements to support productivity. There has been further integration with the Company's proprietary data platform and its product development processes to facilitate best practice decision-making. We have emphasised the improvement of our internal automation to support productivity, including the streamlining of our provider processes. One of the ways we measure productivity is through the Invested Customers per Staff Member metric, which saw an improvement of 15% from 970 in 2022 to 1,112 in 2023.⁵ Benefits from investment in automation were instrumental in achieving Adjusted EBITDA profitability across the fourth quarter of 2023. 

We have continued to explore and adopt artificial intelligence tooling within our departments to leverage its many benefits. For instance, we have begun to use it for initial content generation, project research and coding problem resolution, to name a few areas. We are also progressively integrating our data platform within our daily product management operations, linking core KPIs to projects to ensure our multidisciplinary development teams remain productive and impactful. To facilitate company-wide data-led decision making, we have also trained employees of varying disciplines in utilising the platform. 

Given our focus on security, we continued to implement cyber security tools and best practices. We reinforced a culture of security awareness through increasing standardisation, monitoring and automation of information security operations and compliance.

Our Product 

PensionBee has developed an excellent record of delivering industry leading customer service, which is demonstrated by our continued Excellent Trustpilot rating of 4.6★ (2022: 4.6★), as well as our consistently high Customer Retention Rate of >95%. This is a result of our emphasis on customer satisfaction and continuous product innovation. 

Our data supports our conclusion that engaged customers are more likely to grow their pension savings with us and are therefore more likely to enjoy the type of retirement they deserve. That is why this year, our multidisciplinary  'empowered teams' continued to develop our product offering for the benefit of our customers, incrementally rolling out new features aimed at increasing engagement with our customers. Our searchable FAQs and enhanced help functionalities were developed to guide our customers to more easily find our helpful content. Improving our educational content was a key focus for us. Our customers can now read our content in-app and are served with personalised content features based on our predictions of their interests, to help them make the most of their money. This includes educating them on helpful complements to their pension, such as life insurance. 

We continuously explore ways in which we can help our customers manage their pensions more easily. Our new Regular Withdrawals feature enables our customers to take a regular income from their PensionBee pension by setting up automatic monthly payments, via our desktop or app, directly to their bank account, effectively saving our customers time and improving convenience. Listening to our customers is important to us and their feedback helps us to design products that make managing their pensions easier.

To help our customers with their long-term financial planning we launched our State Pension Age Calculator, designed to help savers evaluate if they can retire before they're eligible to receive the State Pension. We also launched a new online tax relief calculator which encourages our customers to make the most of their pension contributions ahead of the tax year-end. 

Given that the safety and security of our customers' data is of paramount importance to us, we also implemented mandatory two-factor authentication for all our customers. 

Our customers' overall financial wellbeing is important to us. This is why we recently launched a partnership with LifeSearch to help our customers obtain a range of insurance products including life and critical illness cover, to enable them to continue to save for a happy retirement with the confidence that they have a source of financial support even if the worst does occur. Initial customer demand has been positive and we look forward to seeing this progress. 

Our People

We continued to invest in automation and therefore our overall headcount remained relatively stable at approximately 206 average full-time employees in 2023 (2022: 189), while the associated Employee Benefits Expense increased to £(12.5)m for 2023 (2022: £(9.6)m), reflecting the advancement of our team and ensuring we support employees during a high inflation environment. 

Our Money Managers

Money Manager Costs increased to £(3.2)m in 2023 (2022: £(2.8)m), a lower rate than the increase in Revenue, due to the maintenance of competitive pricing with money managers.  

Profitability Metrics 

Adjusted EBITDA Margin improved from (110)% in 2022 to (35)% in 2023. Adjusted EBITDA profitability was achieved in Q4 2023, with a positive Adjusted EBITDA Margin of 11% as compared to (98)%, (50)% and (17)% in Q1, Q2 and Q3 respectively. Adjusted EBITDA captures Advertising and Marketing Expenses but excludes the Share-based Payment costs and Listing Costs.

Profit/(Loss) before Tax narrowed to £(10.7)m for 2023 from £(22.4)m in 2022, reflecting our progress towards profitability and showcasing the operating leverage in our model, whilst we continue to grow.

Share-based Payment costs increased during the period to £(2.2)m (2022: £(1.9)m). 

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 (4.73)p for 2023 (2022: (9.97)p), the improvement reflecting the progress made towards profitability. 

Financial Position

The Group's balance sheet remains strong and the Company is confident in its ability to maintain an appropriate cash balance going forward. The Cash and Cash Equivalents balance was £12.2m at the end of this year (2022: £21.3m) having decreased by £9.1m in the 2023 financial year due to continued investment in marketing as well as our technology platform, to generate future returns (2022: net decrease of £22.2m). As of the end of 2023, the Group had no borrowings. 

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 2023, the capital resources stood at £12.6m (unaudited) as compared to a capital resource requirement of £1.6m (unaudited), resulting in coverage of 7.9x. We have maintained a healthy surplus over our regulatory capital requirement throughout the year and continue to manage our financial resources prudently.

Measuring our Performance

When considering 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

Viability Statement

In accordance with provision 31 of the UK Corporate Governance Code, the Board has assessed the viability of PensionBee Group plc and its subsidiary PensionBee Limited (together the 'Group') for the four-year period to December 2027, 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 Risk, Information Security Risk, Operational Risk, Financial Risk, Reputational Risk, Strategic Risk and Climate Risk, 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 2024 onwards: 

In the event that such modelled scenarios were to manifest, the Board has identified a number of potential mitigating actions that management could take. The primary lever for consideration would be the reduction of discretionary marketing expenditure and the implementation of fixed cost savings. The Board considers this approach to be reasonable, especially given that the Group's financial position has strengthened further over 2023 (in light of it achieving ongoing Adjusted EBITDA profitability in the fourth quarter of 2023) and given the strength of PensionBee's positioning within the UK competitive landscape. The results of the modelling have confirmed that the Group would be able to withstand the adverse financial impact of these aforementioned 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 underwent rigorous review and was approved by the Board in December 2023. The stress test scenarios and associated mitigating actions were reviewed in February 2024 and were subsequently approved in March 2024. 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 2027.

The Strategic Report was approved by the Board on 13 March 2024 and signed on its behalf by:

Romi Savova

Chief Executive Officer

13 March 2024