Edinburgh fintech Nucleus Financial follows up 'incredibly strong' quarter with more growth
Nucleus Financial Group, the Edinburgh-based fintech, has hailed a further strong quarter for new business as it prepares to disappear from the stock market.
The financial technology firm, which received a £145 million takeover offer from James Hay Holdings earlier this year, said it had continued to grow its assets under administration (AUA), which rose to £18.9 billion as of the end of June, up 19.2 per cent year-on-year and 5.1 per cent on the previous quarter.
By comparison, the FTSE All-Share Index increased 17.7 per cent year-on-year and by 4.8 per cent on the last quarter.
Releasing a trading update for the three months to June 30, Nucleus said gross inflows of £578 million were achieved in the period, a 50.5 per cent hike on the second quarter of 2020. Net inflows were £193m, up 17 per cent, year-on-year.
Advisers actively using the company’s platform nudged up 0.5 per cent in the second quarter, compared to the previous three months, and by 2.6 per cent year-on-year. Customer numbers rose 1 per cent compared to the previous quarter and by 2.9 per cent year-on-year.
Following the acquisition of the relevant assets of OpenWealth in December, a new Glasgow office was opened in May.
During the quarter, the James Hay takeover offer received shareholder acceptances in excess of 94 per cent and was declared unconditional as to acceptances. The change in control application is currently pending approval from the Financial Conduct Authority (FCA).
Nucleus, which chief executive David Ferguson set up with the backing of a number of financial advice firms in 2006, has developed software platforms that enable financial advisers to provide online access to clients for investments across ISAs, pensions and bond accounts.
The “wrap platform” provider, which floated in 2018, is seen as one of the biggest successes of Scotland’s burgeoning fintech – financial technology – sector.
The takeover by James Hay valued the capital firm at some £144.6m and creates a financial adviser platform with around £45bn of assets under administration. The takeover move followed last December’s revelation that the Scottish firm had received a number of approaches.
Ferguson said: “The first quarter of 2021 was incredibly strong for new business activity, and it was pleasing to see inflow momentum continue throughout Q2 and to reach £19bn of AUA following the quarter end.
“It was a particularly resilient performance given the ongoing uncertainty of the takeover process and reflects the ongoing achievements and fortitude of our people along with our commitment to continually improving the core platform proposition for our users.”
The group now provides independent wrap platform services to some 1,450 active adviser users and works with more than 850 financial adviser firms.
In March, the firm said it was on track for its best ever quarter for new business activity despite “challenging market conditions”.
It reported a 7.9 per cent increase in assets under administration to £17.4bn. The year-on-year upturn from 2020 came despite the impact of the pandemic on investor sentiment and market volatility throughout the year.