Aim float of Nucleus set to value fintech at £140m

Fintech business Nucleus Financial is expected to be valued at £140 million when it floats on the Alternative Investment Market (Aim) next week.

David Ferguson: 'Nucleus has been an exciting journey so far.' Picture: Lisa Ferguson

Documents filed yesterday show that shareholders, including a number of financial advisers, employees and directors, are selling £32.1m worth of shares in the business which is seen as one of the biggest successes of Scotland’s fast-developing fintech sector.

The firm’s main institutional shareholder – South African financial services firm Sanlam UK – will own just over half of the group after the float, with BlackRock Investment Management owning a 3.3 per cent stake as one of a number of new institutional investors coming on board.

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Founder David Ferguson and his wife will together own a 2.4 per cent stake in the company, worth £3.36m based on its expected market capitalisation when it floats on Thursday.

No new money is being raised for Nucleus as part of the float but the firm said the move will help it simplify its ownership structure and provide it with ready access to the capital markets to potentially accelerate its growth.

The company, which Ferguson set up with the backing of a number of financial advice firms in 2006, has developed software platforms which enable financial advisers to provide online access to clients for investments across ISAs, pensions and bond accounts.

The group charges fees to advisers based on the value of the assets that they manage. The firm’s assets under administration have grown to more than £14.3 billion.

At the time the flotation plans were announced, Ferguson said: “Nucleus has been an exciting journey so far and we expect this admission to Aim to mark an important milestone in the business’s maturity and to open up new opportunities for us.

“We remain committed to keeping adviser/client alignment and transparency at the heart of what we do and to continue developing a market-leading platform and best-in-class customer service to deliver on our objectives.”

Angus Samuels, chairman of the firm, added: “This is an exciting moment for the business. We are looking forward to life as a listed company and the opportunities that lie ahead of us.”

Nucleus, which achieved pre-tax profit of £5.1m in 2017, employs more than 200 staff and users of its platform now exceed 90,000 with 15.6 million transactions processed last year.

Last year the firm’s backers received a £4.3m payout after the business delivered its first-ever dividend. It came after a fifth consecutive year of profit and revenue increases. Around 75 members of staff and senior management received cash payouts.