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Here are 4 things we learned from PensionBee’s prospectus

Trading dates, profitability, marketing costs and more.

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Yesterday PensionBee dropped its 229-page IPO prospectus ahead of its imminent listing on the London Stock Exchange.

The headline, as we reported yesterday, is that PensionBee is eyeing a valuation of between £346m and £384m, depending on where its shares are priced in the 155p-175p range it has outlined.

But the prospectus has a wealth of information about PensionBee’s operations and sheds light on its performance over the past few years.

Here are the top 4 things we learned from it.

1. Conditional trading starts next Wednesday

We finally have a date!

PensionBee confirmed in its prospectus that conditional trading of its shares will begin on 21 April—likely making this also the day when retail investors will find out the size of their allocations if they’ve applied via PrimaryBid.

Unconditional trading, when retail investors will be able to start trading, is the following Monday 26 April.

2. Profitability is a work-in-progress

Unsurprisingly, the prospectus reveals PensionBee is a heavily loss-making enterprise. 

While that’s always been assumed, the IPO documents layout in detail how the fintech’s revenue and costs have soared in the last three years.

From 2018 to 2020 PensionBee’s revenue lept from £1.4m to £6.2m, over 340 per cent, while its net losses surged from £3.1m to £13.2m, over 325 per cent.

This could be concerning would-be investors, but PensionBee points out that its revenue has grown faster than its costs for the last three years.

At the same time, given it’s operating a long term savings product, PensionBee is benefitting from the ‘compounding lifetime value’ of the pension pots under its administration. 

As well as customer growth, the compounding value has helped its AuA to jump from less than £400m in 2018 to over £1.4bn today.

3. A PensionBee marketing blitz is coming

But clearly, more growth is needed for PensionBee to break even, hence a marketing blitz is coming.

If all goes well and PensionBee raises the expected £55m from its listing (£49m after the costs of the float), the lion’s share of that cash will go into marketing.

PensionBee says £34m from the net proceeds will go towards bolstering its marketing budget for the next three years to between £50m and £60m.

TV ads, paid search and out of home billboard campaigns are expected to be the largest components of this marketing blitz.

From the remaining cash, £10m will go towards developing its technology platform and adding new features, with the remaining £5m for general corporate purposes.

4. BeeKeepers are PensionBee’s 2nd biggest cost

PensionBee puts a huge emphasis on the high-touch customer experience of its BeeKeepers (dedicated customer account managers) which is points to as part of the reason for its industry-leading 76.1 Net Promoter Score.

However, BeeKeepers and staff don’t come cheap, and PensionBee’s staff costs have also grown from £1.4m in 2018 to £4.47m last year, a rise of nearly 220 per cent.

Staff accounted for PensionBee’s second-biggest cost after advertising and marketing (£8.2m) in 2020.

And overall, PensionBee’s headcount has risen during that time from 34 to 110, excluding around 39 contractors it had on the payroll at the end of last year.

There’s probably more to discover in PensionBee’s prospectus, we’ll keep digging through it and if you spot anything interesting let us know.

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