Wrap platform provider Nucleus has decided to postpone its 2019 final dividend despite earnings growth to preserve funds amid the Covid-19 pandemic.
Nucleus founder and CEO David Ferguson said: “In light of the Covid-19 situation, the board has taken the prudent decision not to recommend a dividend until there is more certainty around the term and impact on markets, investor confidence and revenue.
“While this would typically be considered an unusual decision, we are in uncharted waters, and I believe it to be the correct course of action at this stage.”
The firm said that the impact on the pandemic on the business is still uncertain and hence did not offer its 2020 outlook.
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However, Ferguson stressed that the firm entered the current year with a “stronger than ever combination of online product capability and offline service”.
“Despite the current situation, the positive momentum following the general election in December carried into the start of the year and inflows have remained buoyant throughout with a 100.0% increase in net inflows in Q1 2020 against the first quarter of 2019. Inflow momentum has eased off in the last couple of weeks as the Covid-19 situation has developed,” Ferguson added.
In 2019, Nucleus reported a statutory pre-tax profit of £6m. This was an increase of 25% from the prior year’s figure of 4.8m.
Revenue of £51.5m in 2019 was 4% higher than the previous year.
Assets under administration (AUA) as of 31 December 2019 were £16.1bn, up 16% from last year.
The AUA dropped to £14bn at the end of Q1 2020.
However, the number of the firm’s active advisers in Q1 2020 has increased 4% to 1,430 on a year-on-year basis.
The firm’s customer numbers also increased 5% from 94,144 to 98,678 over the same period.