Edinburgh fintech Nucleus continues to invest in future

● Customer numbers now over 100,000 but H1 earnings impacted by investment

Nucleus Financial Group, the Edinburgh-based fintech business, has seen customer numbers top the 100,000 mark after booking resilient first-half results despite investor sentiment being hit by the pandemic.

The firm said it had also pushed the button on its new discretionary portfolio management service, Nucleus IMX,whic hit is expecting “good things from over time”.

Results for the six months to the end of June revealed that assets under administration (AUA) had recovered to just over £15.8 billion, close to preCovid highs and a 3.2 per cent increase on a year earlier. That compares to a FTSE All-share Index fall of 15.9 per cent over the period.

Net revenue grew by 0.7 per cent to £22.2 million while operating expenses were in line with expectations.

Adjusted earnings before interest, taxes, de preciation and amortisation( E bitda) were down 54 percent at £2.1m, after being adversely impacted by the combined effect of lower-than-expected average AUA levels and continued investment during the period.

There was a 4.3 percent increase in customer numbers to 99,797 over the last year, with that figure push - ing through 100,000 since the period end.

David Ferguson, the group’s chief executive, said there were “lots of positives” to latch onto during a tough period for the financial services industry, pointing to a recent “uptick” in adviser activity.

He said: “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 and grew assets by 3.2 per cent year-on-year.

“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. We expect good things from IMX overtime and intend to continue investing in the development of our platform and service proposition for the long-term benefit of our users, their clients and our shareholders.

“While the impact of Cov - id-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 postCovid-19 expectations.”

An interim dividend of 1 pp er share was declared, down from 1.5p a year earlier, and equating to a payout of £800,000. It had suspended its dividend with its 2019 results.

Nucleus, which Ferguson set up with the backing of a numb er 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” pro - vider, which floated in 2018, is seen as one of the biggest successes of Scotland’s burgeoning fintech – financial technology – sector.