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AUA lifted at half-way

Nucleus tackles profits slide with investment in growth

David Ferguson

David Ferguson: ‘Covid impacted sentiment’

Nucleus Financial has continued to invest and hire staff through the pandemic, with a 3.2% rise in assets under administration in the six months to end June over the same period last year.

The uplift to £15.8bn compared to a FTSE All-Share Index reduction of 15.9%. Net revenue grew by 0.7% in the period.

However, adjusted profits before tax took a hit, down 56.6% to £1.8m (2019: £4.2m).

Adjusted EBITDA, at £2.1m (£4.6m), was adversely impacted by the combined effect of lower than expected average AUA levels during the period and maintenance of expected levels of proposition investment.

Operating expenses were in line with expectations, except for AUA related costs which were also lower than expected on account of the H1 market falls, as planned levels of investment were maintained.

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The Edinburgh-based company declared an interim dividend of 1p per share (H1 2019: 1.5p) equating to a payment of £0.8m.

It said its balance sheet remains strong with £18.7m of cash, no borrowings and £11.2m of capital in excess of the 8% minimum regulatory capital requirement.

David Ferguson, founder and CEO of Nucleus, commented: “Covid-19 has clearly impacted investor sentiment over the first half of the year but despite this, we recovered most of the Q1 market fall in AUA by the end of the period.

“During this time we have focused on those elements within our control and as such we continue to invest in our proposition to ensure we meet the future needs of our users.

“While the impact of Covid-19 remains uncertain and continues to affect investor sentiment, customer numbers exceeded 100,000 after the period end, and trading has been in line with our post-Covid-19 expectations. I believe we are well positioned to win market share, grow our top line and expand our operating margin.”

Speaking later to Daily Business he said he did not expect all staff to work full-time at the office once the pandemic was over.

“I would be astonished if we went back to working as we did before,” he said.

“We have proven through the pandemic that the business carries on,” he said, though being in the office meant people benefited from what he called “accidental learning”.

The company made no use of furlough and has been hiring through lockdown, with eight joining and others due to join.

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