Embark swings to profit amid digitisation drive

Embark swings to profit amid digitisation drive

The Embark group's Embark Services has reversed its post-tax loss of £1.9m in 2016 to a trading surplus (after tax) of £0.9m.

Embark Services, which provides Sipps and Ssas under the Embark and Hornbuckle brands, said 2017 profit was bolstered by a reduction in operating costs and access to central support services coming from its parent company.

The business has been under a period of transition from its origin as a full self-invested pensions provider (Sipp) and small self administered scheme (Ssas) administrator, to providing digitally executed retirement services.

During 2017, the business saw a 13 per cent increase in its client numbers and expects trading during 2018 to continue to show similar progress. It is currently in partnerships with robo-advisers Moneyfarm and Wealthsimple.

Embark's growth in digital business was offset by declines in complex pension products which led to a net increase in scheme numbers, the group said.

Paul Downing, managing director of Embark Services, said: "2017 was a solid year for the business in a market full of change.

"Our diversification into the bionic investment market continues to be a primary driver of our performance, and we see this accelerating greatly in 2018."

Phil Smith, CEO of the Embark Group, said: "We are very pleased with the progressive performance improvements and underlying growth at Embark Services Limited.

"It remains a cornerstone of the Embark strategy and is proving itself as a leading provider of digital pension administration in the UK."

The results come after EBS Pensions Limited, another subsidiary of Embark, reported that its Sipp and Ssas schemes reached a record high of 16,600 during 2017 due to a growth in its net client base.

Alan Chan, director and financial planner at IFS Wealth and Pensions, said: "It goes to show that the Sipp market can be a tough market to be in and it’s a fine line between losing money one year and making a profit in the next.

"Profit is almost seen as a dirty word in the financial services, but it is important for any business to make a profit as it will provide financial stability and funds to reinvest in the business to ensure it is still competitive. It’s good to see that they’re turning things around and heading in the right direction."