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Ascentric reports £650k ‘exceptional’ cost for replatforming project

Platform’s assets at the end of the year were £12.3bn, an increase on the 2015 result of £10.1bn

Royal London-owned platform Ascentric has reported an “exceptional” cost of £652,000 related to its replatforming project in the year ending 31 December 2016 as it announces a loss of £41.2m.

The platform’s 2016 results statement says the £652,000 cost represents “the recharge from Investment Funds Direct Holdings in respect of the redesign and rebuild of the platform’s underlying IT system”.

In 2015 Ascentric, the trading name for Investment Funds Direct, reported an exceptional cost of £1.8m. In 2014, this cost was £2.3m.

The results statement explains that before 2014, costs related to the replatforming project were expensed within Investment Funds Direct Holdings, a subsidiary of Investment Funds Direct Group, which is Ascentric’s parent.

An “administrative recharge” was then made to Ascentric.

The statement says the recharges stopped in 2016 with post-2014 project costs capitalised as an “intangible asset” within Ascentric so there are no further “exceptional” costs expected.

The financial loss of £41.2m follows a loss of £1.3m in 2015.

The statement explains that the 2016 loss includes a £43.5m impairment, which Royal London announced in its annual results in March.

The platform took on new net assets under administration of £1bn in 2016, down from £1.1bn in 2015. Platform assets at the end of the year were £12.3bn, which was an increase on the 2015 result of £10.1bn.

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  1. Could a predatory bid be in the offing? Smaller platforms have made money. Can Royal London be happy with these results?

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