Nucleus pulls back on IPO plans

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Nucleus has delayed plans to explore flotation after advisers reacted negatively to the proposal.

Chief executive David Ferguson told Money Marketing in February that the terms of its ownership required the adviser-owned firm to explore a float this year.

However, chief financial officer Doug Heron now says the plans have been shelved.

He says: “Our shareholders’ agreement required us to evaluate the merits of a float. But what we got back from our shareholders is they want to see us do more in terms of growth and innovation and efficiency before we get to do something on that front.

“But they’re behind us in what we want to do, and they want us to keep an open mind. So it definitely won’t be next year, but we will look at it again periodically.”

The news comes as Nucleus reports profits have increased 92 per cent, from £2.5m in 2014 to £4.8m last year.

Of that increase, £1.2m came from contributions made by tech providers towards migration costs relating to Nucleus move to Bravura’s Sonata system in 2014, and its 2015 move of some systems to Genpac.

Excluding these contributions, profits rose £1.1m, or 44 per cent.

Assets under administration reached £9.3bn, up 16 per cent from £8bn in 2014.

Heron says Nucleus will make further investments with the aim of boosting AUA to £20bn  before 2021.

He says: “The platform is good enough to support £9bn, but it would be creaking if we went to £15bn, so we want to start making investments in the platform to get that to £20bn.

“We are being really selective in what we take on and we probably turn away more than half of the business we take, so whether we end up accepting more business or turning away even more will affect our progress.

“But I’m confident that we’ll hit £10bn next year and £20bn within a five-year time frame.”