NUC.L Regulatory News (NUC)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, JAPAN, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA, AUSTRALIA OR TRANSMITTED, DISTRIBUTED TO, OR SENT BY, ANY NATIONAL OR RESIDENT OR CITIZEN OF ANY SUCH COUNTRIES OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION MAY CONTRAVENE LOCAL SECURITIES LAWS OR REGULATIONS.

This announcement is not an admission document or a prospectus and does not constitute or form part of, and should not be construed as, an offer of securities for subscription or sale in any jurisdiction nor should it be relied upon in connection with any contract or commitment whatsoever. Investors should not subscribe for or purchase any securities referred to in this announcement except in compliance with applicable securities laws and regulation and on the basis of the information in Nucleus Financial Group Plc's ("Nucleus'" or the "Company's") admission document dated 20 July 2018 (the "Admission Document") and any supplement thereto, intended to be published by the Company, in connection with the proposed placing of existing ordinary shares of 0.1 pence each ("Ordinary Shares") and the proposed admission of all of its Ordinary Shares to trading ("Admission") on the AIM market ("AIM") of London Stock Exchange plc ("London Stock Exchange"). Copies of the Admission Document will be available on the Company's website: www.nucleusfinancial.com.

26 July 2018

Nucleus Financial Group Plc

First Day of Dealings on AIM

Nucleus, a leading independent wrap platform provider, is pleased to announce that Admission will take place and dealings in its Ordinary Shares on AIM will commence at 8:00am today under the TIDM code "NUC". The ISIN of the Ordinary Shares is GB00BG226J60 and the SEDOL is BG226J6.

Shore Capital is acting as Nominated Adviser, Sole Bookrunner and Broker to the Company and Craven Street Capital Limited is acting as Financial Adviser to the Company.

Admission Statistics

The Company's AIM admission document can be viewed at http://www.nucleusfinancial.com/investors

David Ferguson, Chief Executive of Nucleus, commented:

"This is an important milestone as we continue our work to support and promote the strategic alignment of advisers and their customers. It's great to see so many institutional investors believing in the growth potential of this objective and we look forward to collaborating with our users to further promote transparency and improve customer outcomes."

All defined terms used in this announcement have the meanings set out in the Company's admission document dated 20 July 2018 which is available on the Company's website.

Notes to Editors

About Nucleus

Nucleus is a wrap platform founded in 2006 by advisers committed to altering the balance of power in the industry by putting the client centre stage. It provides independent wrap platform services to over 2,200 adviser users across more than 800 financial adviser firms as at 30 June 2018. It is responsible for assets under administration ("AUA") of £14.3 billion on behalf of more than 90,000 customers.

The multi-award winning platform offers a range of custody, trading, payment, reporting, fee-handling, research and integration services across a variety of tax wrappers and more than 5,000 asset choices including cash, OEICs, Unit Trusts, offshore funds, structured products and listed securities, including ETFs and investment trusts.

The Platform currently facilitates over 1.1 million client account transactions on average per month.

Nucleus has won CoreData's 'best medium sized platform' for the last six years, the Schroders 'platform of the year' award for the last two years and recently won 'best platform' at the Money Marketing Awards.

Wealth Management and Wrap Platform Markets

Aggregate UK household wealth has grown considerably in recent years (source: ONS), coinciding with shifts in demographics and working patterns which are resulting in people living longer and spending longer in retirement (source: TISA). On top of this, certain regulatory changes, including pension freedoms and ISA allowance increases, have provided more freedom for customers to manage their investments.

The complex UK wealth management market remains difficult for many individuals to navigate and more investors are seeking professional financial advice in relation to their personal savings and investments. Platforms, particularly those run independently of asset managers and those not vertically integrated, provide financial advisers with easy and transparent access to thousands of different securities, with a variety of current and historic investment data on each.

When combined with the transparency and conflict of interest changes enforced as part of the RDR and MiFID II, wrap platforms have helped to change the way the financial advice market operates, giving more discretion, flexibility and power to clients and make investment managers more accountable for their performance.

Between 2012 and 2017, total AUA across the advised platform market grew at a compound annual growth rate of 23 per cent., to reach £350 billion. AUA is projected to grow by a further 113 per cent. to £745 billion by 31 December 2021 (Source: Fundscape Platform Market Report Q3 2017's 'Realistic Channel Projections').

Strategy

To date, Nucleus' growth has been driven by attracting and developing long-term net inflows from adviser users. The Group aims to continue to grow AUA and revenues from existing and new adviser users, increase operating margins and create new income streams through product development.

The Group aims to increase the number of adviser users and to deepen penetration of existing users. The number of active advisers (defined as advisers that have (i) added new customers or top-ups from existing customers in the last quarter; and (ii) maintained customer numbers above 80 per cent. of their highest ever level) rose by 6 per cent. in 2017 and increased by a further 2 per cent. in Q1 2018 to reach an all-time high of 1,346 at the end of March 2018.

Approximately one third of the Group's annual cost base has been linked to AUA between 2015 and 2017, and the Directors anticipate that the Group will benefit from operational leverage as AUA continues to grow. The Group intends to target improvements in margins by using outsourced services more selectively and focusing more on end-to-end processes automation.

Current trading and prospects

Trading since 31 December 2017 has continued in line with the Board's expectations and the Group has grown AUA from £13.6 billion to £14.3 billion, against a backdrop of more volatile markets than in 2017. In the period to 30 June 2018, the Group had brought 119 new financial advisers onto the Platform and the number of active users has increased from 1,317 to 1,357.

Reasons for the Admission and Placing

The Directors believe that the Admission will:

· Introduce a more mature, simplified capital structure

· Unwind residual obligations from the start-up shareholders agreement

· Offer existing shareholders liquidity

· Improve public profile to boost competitive positioning

· Create the option to raise capital for specific projects to accelerate growth

· Generate the flexibility to pursue complementary M&A opportunities

· Incentivise management and staff by way of share incentive schemes

Dividend policy

The Board intends to pay interim and final dividends representing a pay-out ratio of between 60 per cent. and 70 per cent. of the Group's profit after tax, adjusted for any exceptional items. The Board may, however, revise or adapt the Group's dividend policy from time to time in line with the actual results of the Group and the cash requirements of the Group's activities.

Directors

The Board on Admission will comprise:

Angus Samuels, Independent Non-Executive Chairman, aged 68.

Angus Samuels joined the Board of the Company in July 2006 as a Non-Executive Director and was appointed Chairman in March 2017. He has previously held a number of Chief Executive Officer roles, including at Sanwa Asset Management UK Limited, Credit Suisse Asset Management Limited and Sanlam Investment Management Limited (South Africa).

He currently serves as the chairman of Punter Southall Group Limited and Craven Street Capital Limited and holds a number of other Non-Executive Directorships, including with Sanlam UK Limited and Sanlam Life and Pensions UK Limited.

David Ferguson, Chief Executive Officer, aged 48.

David Ferguson co-founded the Company in 2006 and is currently the Chief Executive Officer. Previously, he was Director of Abacus Financial Marketing Limited. He was a trainee actuary with Life Association of Scotland Limited prior to working at Ivory & Sime Limited and what was then known as Scottish Life International Limited.

He has also been a member of Her Majesty's Treasury Fintech Envoy for Scotland since December 2016 and is the Chairman of FinTech Scotland. He has a BSc (Hons) (Actuarial Mathematics and Statistics) from Heriot-Watt University.

Stuart Geard, Chief Financial Officer, aged 44.

Stuart Geard joined the Company as Managing Director in 2012 and more recently became Chief Financial Officer in August 2017. Mr Geard started his career in 1997 with what is today PwC South Africa before moving to Sanlam Limited as a senior manager in corporate finance. He moved to the UK in 2005 as head of finance and investments for what is now Sanlam Life and Pensions UK limited prior to becoming Finance Director of Sanlam UK Limited.

He also served as Director at Sanlam Private Investments UK Limited and Sanlam Life and Pensions UK Limited. Mr Geard qualified as a Chartered Accountant in South Africa with PwC in 2000 and has passed all three levels of the CFA exams. He graduated from the University of Cape Town with a BBusSc (Finance) and a Post-Graduate Diploma in Accounting.

Margaret Hassall, Independent Non-Executive Director, aged 57.

Margaret Hassall will join the board immediately prior to Admission as an Independent Non-Executive Director. She has held senior positions at Barclaycard PLC, Bank of America Merrill Lynch Corporation and The Royal Bank of Scotland PLC. In addition to her executive roles Mrs Hassall has also worked extensively as a consultant for Deloitte and Touche Limited, Oracle Corporation and Xceed Limited, and led the Financial Services consulting business for Charteris PLC.

Since 2016 she has been an Independent Non-Executive Director at One Savings Bank PLC, where she is a member of the Risk and Audit Committees. She is also a Non-Executive Director at Ascention Trust (Scotland) and a Trustee for Edinburgh Street Pastors. Mrs Hassall holds a BSc (Hons) (Industrial Studies) from Sheffield City Polytechnic. Her earlier career was spent across a range of organisations and industries, typically where major change was taking place, namely Lucas Industries Limited, The British Shoe Corporation and East Midlands Electricity Limited.

Tracy Dunley-Owen, Independent Non-Executive Director, aged 46.

Tracy Dunley-Owen will join the board immediately prior to Admission as an Independent Non-Executive Director. She has held senior executive finance roles up to Chief Financial Officer and Board, Audit and Risk Committee advisory responsibilities at various companies within the Old Mutual PLC group, Guardian Financial Services Group, a division of Swiss Reinsurance Company Limited and Celestial Financial Services Limited.

She is a Non-Executive Director of Lifecheq (Pty) Limited and an Independent Non-Executive Director for the Women's Investment Portfolio Holdings Limited where she serves as a Member of the Audit Committee, Chair of the Nomination & Remuneration Committee, and Chair of the Social and Ethics Committee.

John Levin, Independent Non-Executive Director, aged 54.

John Levin joined the Board in 2017 as a Non-Executive Director. He co-founded and is Chairman of Quanis Limited, Certua Group Limited and Surely Limited. He also co-founded Telecom Plus PLC where he was a Non-Executive Director from 1997 to 2006.

Mr Levin has held senior positions in several companies including, Chairman of Amtrust Europe Limited, Chief Executive Officer and Non-Executive Director of IGI Group Limited. He is presently Chairman of Car Care Plan (Holdings) Limited, Motors Insurance Company Limited and Rocketer Limited and sits on the board of Money Dashboard Limited, Ashton Insurance Services Limited and Integrated Protection Solutions Limited. Mr Levin was also a Non-Executive Director at Pedigree Livestock Insurance Limited and Chairman of Q-Cloud Services Limited.

Jeremy Gibson, Non-Executive Director, aged 45.

Jeremy Gibson joined the Board in 2013 as a Non-Executive Director and has previously fulfilled the role of Chairman of the audit and risk committees. He joined Sanlam UK Limited in September 2012 where he is currently the Chief Financial Officer. He is a qualified chartered accountant, having qualified in South Africa and has worked in a broad range of financial services organisations including stockbroking, investment banking, mortgage lending, advisory services and life and pensions in London and Sydney.

Jonathan Polin, Non-Executive Director, aged 58.

Jonathan Polin joined the Board in 2016 as a Non-Executive Director. He currently serves as the group Chief Executive Officer of Sanlam UK Limited, which he joined in 2015. Previously, he was group Chief Executive of Ashcourt Rowan Limited. Prior to this, he was a Director at Ignis Asset Management Limited. Mr Polin began his financial services career with Prudential PLC in 1992, having spent the previous 12 years in the Army. In 1994, he took up the position of Managing Director UK, European and Middle Eastern sales at what was formerly known as Aberdeen Asset Management PLC.