Nucleus eyes break-even despite £1.7m operating loss

Nucleus chief executive David Ferguson says the IFA-owned wrap will break-even this year, after operating losses shrunk to £1.7m in 2010.

The period up to December 31 saw assets under administration surge to £2.2bn and revenue nearly double from £2.4m to £5.6m in a year which saw the Edinburgh-based wrap become debt free following completion of a £15m rights issue.

Operating loss also reduced 15% from £2m to £1.7m as the wrap invested heavily in operational infrastructure whilst taking on key personnel.

Overall, the platform posted a loss of £3.1m which was largely due to debt financing. But Ferguson (pictured) points out "debt is no longer a feature of the business" following completion of its rights issue.

He adds the wrap is now on target to break-even by June or July and is hopeful of making a profit in 2011. 

Last year, the wrap briefly dipped into profitability.

"We flirted with profitability last year and then went for a longer-term relationship with a bigger business plan," adds Ferguson.

The wrap now boasts an AUM of £2.63bn and currently has 80 owner-IFA member firms.

Ferguson went on to hail 2010 as a "pivotal year" for the platform which launched a little over four years ago.

"For the business to be in this position after such a short space of time is an exceptional achievement and one I am extremely proud of," he says.

"It not only demonstrates the financial efficiency of our model but also positions us favourably to achieve break-even on a sustainable basis later this year.

"We are already enjoying the benefits of a much stronger balance sheet following a hugely successful rights issue and will continue to use this improved strength to make the necessary investments that will ensure we fulfil our considerable ambitions over the coming months and years."

The platform had positive cash reserves of £4.4m at the end of 2010 following its rights issue.