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Spending spree pushes Embark to £3m loss

Platform and Sipp provider sees its assets boosted to £8.1 billion but its losses are at £2.9 million.

Spending spree pushes Embark to £3m loss

Platform, research and tech spending all proved costly for platform and Sipp provider Embark last year as it posted a a pre-tax loss of £2.9 million.

However the loss recorded by financial statements for holding company Embark Services obscured a 232% rise in assets under administration to £8.1 billion.

Since Embark was launched in 2013 as the new name of Hornbuckle Mitchell it has made a series of purchases including the Avalon platform, Sipp and SSAS provider Rowanmoor, fund researcher The Adviser Centre and pension business EBS Management.

Losses increased year on year from £500,000 in 2014 to £1.7 million in 2015 and £2.9 million last year. The latest loss included one-off expenses from acquisitions and platform development.

Hornbuckle chief executive Phil Smith told New Model Adviser® the company was heading into a period of consolidation where it will make fewer acquisitions which will boost its numbers going forward.

‘We recall for the first few years it was about starting and putting in the foundation stones. With a view we would accelerate organically and inorganically. The numbers are now starting to show that pretty clearly.

‘If interesting, value accretive deals present themselves then we will be opportunistic, however we have the components we were looking for in this phase of our growth.'

In the 12 months to the end of December 2016 Embark generated £17.2 million revenue, up 180% from the previous 12 months.

Client numbers grew 641% to 86,400 in 2016 from 13,500 in 2015.

Smith said the loss for the holding company was not the whole story for the group and many millions of pounds had been invested in growth.

‘The underlying businesses, for a full 12 months, were all profitable,’ he said.

‘The strength of the balance sheet has gone up dramatically as we have injected £8 million for doing the things we have been doing.'

One of the investments has been in moving the Avalon platform from Cofunds to FNZ technology but Smith would not disclose how much of the £8 million had been spent on this.

The firm is also bringing out a new platform with FNZ which will be launched by the end of September, Smith said. Existing Avalon clients will be given the option of moving to the new platform. 

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