Nucleus Financial's first-half profits surge despite soft inflow

11th Sep 2018 11:44

(Sharecast News) - Just a couple of months after its initial public offer, Nucleus Financial reported a drop in net inflows but a doubling of interim profits as a result of an increase in assets under administration.Revenue rose 11% to £21.6 following a 16% jump in assets under administration to £14.3m and average AuA growing 17%, with the revenue margin declining to 31.5bps compared to 33.3bps last year.Nucleus, which was admitted to trading on AIM in July, saw net inflows drop 15% year-on-year to £726m, due to lower inflows and higher outflows. Customer numbers increased 5.9% to 90,650 throughout the year and saw a 7.2% jump in the number of active advisers to 1,357.Adjusted EBITDA rocketed 153% to £4.9m and adjusted profit before tax surged to £4.5m from £1.7m. The board opted to declare an interim dividend of 2.7p per share.David Ferguson, Nucleus' founder and chief executive, said: "In these, our inaugural set of interim results presented as a quoted company, I am very pleased to report strong results for the first half of the year."He said that inflows per firm across the sector were expected to remain "slightly soft in the short-term as post-MiFID II and post-GDPR processes mature and adviser firms rediscover capacity to take on new clients"."However, we also anticipate an acceleration in the number of firms using our platform, partially due to service constraints arising as a result of re-platforming experiences elsewhere, and for those firms to continue to make a growing contribution to overall AUA inflows. In such situations, this trend can also trigger modest incremental improvements in relative outflows due to the balance toward new clients."As of 1140 BST, Nucleus shares had dipped 1.07% to 207.25p.