Nucleus has axed its dividend in light of the “exceptional and open-ended uncertainty” caused by the coronavirus crisis, despite reporting a jump in assets and revenue for last year.
In its final results for the year to December 2019, published today (April 7), the wrap platform provider said due to the rapidly changing environment caused by the pandemic the board had decided not to recommend a dividend until there was more certainty in markets, investor confidence and revenue.
It added: “The decision to suspend payment of the 2019 final dividend will allow the group to preserve capital until there is greater clarity on the above.
“The board will continue to assess the situation and the appropriateness of paying a second interim dividend relating to the financial year ended 31 December 2019.”
Nucleus reported a 16.3 per cent year-on-year increase in assets under administration to £16.1bn for the year ending December 31, while revenue also increased to £51.5m — a jump of 4.3 per cent.
Its profit after tax stood at £6m for 2019, up 25 per cent on the previous year, while its earnings per share increased a similar amount to 7.8p.
The platform also reported a 3.3 per cent increase in the number of active advisers using the firm throughout 2019 — from 1,396 to 1,442 — and a 3.4 per cent increase in customer numbers, from 93,700 to 96,850.
It also reported that investment in its platform software, a series of enhancements to improve adviser efficiency and the launch of an online client portal, Nucleus Go, had been successfully carried out.
In an update on Q1 2020, Nucleus reported its assets had slipped from £16bn to £14bn over the three months to March, with market drops of £2.4bn impacting the platform’s funds.
But the platform continued to see positive net inflows, with £268m invested on the platform in Q1, and a 4 per cent boost in adviser numbers.
David Ferguson, founder and CEO of Nucleus, said: “2019 was a challenging year for most UK financial services businesses as a result of the much trailed political and economic headwinds, particularly surrounding Brexit.
“Despite this, we made good progress over the year with growth across most of our key financial metrics, including assets, revenue, profit after tax, customers and advisers.”
Mr Ferguson said the platform faced “a new challenge” this year with the development of coronavirus, adding the outlook was “impossible to predict”.
However he stressed Nucleus remained open for business and cash generative each day and was taking “every possible action” to adapt to the situation and ensure it could deliver its online product as normal.
Mr Ferguson added: “Notwithstanding the impact of external factors, whether related to market sentiment, the political environment or the current coronavirus pandemic, I believe the business is well-positioned to deliver on our plans and capitalise on the structural growth themes relating to our sector.”
imogen.tew@ft.com
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