By Kristy Dorsey

Nucleus Financial has reported a better-than-expected trading performance after closing a £1.5 million acquisition to take over the OpenWealth operation based in Glasgow.

The Edinburgh-based financial technology firm – which is itself in talks with two potential bidders – said net inflows so far in the fourth quarter had increased to £388m, with assets under administration (AUA) up to £17.3 billion. It has also agreed its first enterprise relationship with a new advisor network.

As a result, Nucleus said both earnings and AUA for the financial year to the end of December are “expected to exceed the board’s expectations”.

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The OpenWealth deal completed on December 10, bringing with it 130 people and taking Nucleus’ total headcount to approximately 380. The acquisition is expected to stabilise the company’s cost base, which will boost profit margins as AUA grows.

Nucleus founder and chief executive David Ferguson said he was “delighted” to complete the deal.

“The acquisition is expected to be earnings enhancing in 2021 and increasingly accretive in future years,” he added. “I very much welcome the OpenWealth team into the Nucleus group and look forward to working with them closely as we continue to grow the business.”

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There was no further news on talks between Nucleus and its two potential bidders, FTSE-250 listed IntegraFin and London private equity house Epiris. Both confirmed their interest in AIM-listed Nucleus at the beginning of this month, sending the Scottish firm’s shares soaring to as high as 192p.

Looking ahead, Mr Ferguson said Nucleus has re-established the positive momentum it had at the start of this year before the fall in inflows at the height of the pandemic. The company is now in the process of rolling out its new portfolio service, Nucleus IMX.

Its shares closed nearly 3 per cent higher yesterday, up 5p to 176p.