TIDMREC
RNS Number : 0941A
Record PLC
17 January 2020
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
17 JANUARY 2020
RECORD PLC
THIRD QUARTER TRADING UPDATE
New business momentum yields growth in AUME and client numbers;
performance fees earned
Record plc ("Record" or "the Company"), the specialist currency
manager, today announces a trading update for the three months
ended 31(st) December 2019.
Highlights:
-- Assets under management equivalents ("AUME") expressed in US
dollars grew by 8% over the period to $64.7 billion as at 31(st)
December 2019.
-- Net inflows of $2.5 billion in the period, of which $1.0
billion relates to a tactical bespoke mandate as previously
announced.
-- Client numbers increased by 3 over the period to 73.
-- Management fee rates remained broadly unchanged, and
performance fees of GBP1.8 million were earned in the third
quarter.
Chief Executive James Wood-Collins commented:
"In the third quarter we have demonstrated momentum in terms of
new business, as illustrated through positive net inflows of $2.5
billion and continued growth in client numbers for the quarter.
Overall, AUME is up 12.9% in dollar terms in the nine months to
31(st) December 2019.
"Performance fees of GBP1.8 million earned in the period
highlight our ability to add value to mandates and underscore our
capabilities.
"Management fee rates held up in spite of continued competition
and fee pressure. Our focus remains on building on current business
opportunities and on enhancement and innovation of our products and
services."
Record will announce its fourth quarter trading update on 17(th)
April 2020 and its financial results for the year ending 31(st)
March 2020 on 19(th) June 2020.
1. AUME composition
The Group's AUME expressed in US dollars as at 31(st) December
2019 totalled $64.7 billion (30(th) September 2019: $59.9 billion),
and expressed in sterling totalled GBP48.8 billion (30(th)
September 2019: GBP48.6 billion). AUME expressed in US dollars
increased by 8% between 30(th) September 2019 and 31(st) December
2019 and remained broadly flat when expressed in sterling. The
composition of AUME by product was as follows:
AUME $ billion
31(st) December 30(th) September
2019 2019
---------------- -----------------
Dynamic Hedging 3.5 3.2
Passive Hedging 53.4 50.4
Currency for Return 3.3 2.9
Multi-Product 4.2 3.1
---------------- -----------------
Cash & Futures 0.3 0.3
---------------- -----------------
Total 64.7 59.9
---------------- -----------------
2. AUME Movement
Net client AUME flows in the three months to 31(st) December
2019 by product were as follows:
Net client AUME flows - $ billion
3 months to 31(st) 3 months to 30(th)
December 2019 September 2019
------------------- -------------------
Dynamic Hedging 0.1 (0.1)
Passive Hedging 1.4 1.5
Currency for Return - 0.3
Multi-Product 1.0 -
------------------- -------------------
Cash & Futures - -
------------------- -------------------
Total 2.5 1.7
------------------- -------------------
Record had 73 clients at 31(st) December 2019 (30(th) September
2019: 70 clients). Three new clients associated with an existing
client relationship started passive hedging mandates with AUME of
$0.7 billion. The Multi-Product net inflows of approximately $1
billion disclosed above were first reported on 23(rd) December 2019
and represent an increase to a tactical bespoke mandate. As such
the increase is expected only to be temporary.
Other than client flows, the factors which have had an aggregate
impact on AUME during the quarter of +$2.3 billion were as
follows:
(i) Exchange rate movements and mandate volatility targeting: +$2.3bn
Exchange rate movements during the period affect the conversion
of non-US dollar mandate sizes into US dollar AUME. In addition
certain Currency for Return mandates targeting a specific
volatility target may be scaled up or down.
(ii) Movements in global stock and other markets: +$0.0bn
Substantially all the Passive and Dynamic Hedging, and some of
the Multi-Product mandates, are linked to stock and other market
levels. Consequently AUME may be affected by movements in these
markets.
3. Investment performance
Investment performance of the FTSE Currency FRB10 index (excess
return in sterling) during the three months to 31(st) December 2019
was +0.19% (three months to 30(th) September 2019 was +0.63%). The
FTSE FRB10 Index Fund continued to track the benchmark index
closely, on a 1.8x geared basis.
Record's Emerging Market product investment performance was
positive during the quarter and for an un-geared portfolio equated
to a quarterly return of +1.04% (three months to 30(th) September
2019 return of +0.61%). Annualised performance since inception
(30(th) November 2009) for an un-geared portfolio was +2.15%
p.a.
Investment performance in the Multi-Strategy product that
comprises the FTSE Currency FRB10, Emerging Market, Value, Momentum
and Range Trading strategies was negative during the quarter. The
performance of Record's Multi-Strategy composite targeting 4%
volatility equated to a quarterly return of -0.46% (three months to
30(th) September 2019: return of +1.47%). Annualised performance
since inception (31(st) July 2012) for the portfolio was +1.41%
p.a.
For US Dynamic Hedging clients during the quarter, hedging
returns in the programmes were negative, as the US dollar
depreciated versus the weighted basket of hedged currencies.
4. AVERAGE FEE RATES AND PERFORMANCE FEES
During the quarter to 31(st) December 2019, fee rates remained
broadly unchanged from the previous quarter. Record earned
performance fees of GBP1.8 million during the quarter, of which
GBP1.3 million related to performance over the six months, and
GBP0.5 million to performance over the twelve months, to 31(st)
December 2019.
For further information, please contact:
Record plc Tel: +44 (0) 1753 852 222
James Wood-Collins, Chief Executive Officer
Steve Cullen, Chief Finance Officer
Buchanan Tel: +44 (0) 20 7466 5000
Giles Stewart record@buchanan.uk.com
Victoria Hayns
Henry Wilson
Notes to Editors
Record plc
Record is a specialist currency manager and provider of currency
hedging services for institutional clients. Founded in 1983, Record
has established a market leading position as a currency manager.
Specifically, the Group has a leading position in managing Currency
Hedging and Currency for Return for institutional clients.
The Group has four principal reporting lines:
- Dynamic Hedging, where Record seeks to eliminate the impact of
currency movements on elements of clients' investment portfolios
that are denominated in foreign currencies when these movements are
expected to result in an economic loss to the client, but not to do
so when they are expected to result in an economic gain;
- Passive Hedging, where Record seeks to eliminate fully or
partially the economic impact of currency movements on elements of
clients' investment portfolios that are denominated in foreign
currencies;
- Currency for Return, in which Record enters into currency
contracts for clients with the objective of generating positive
returns; and
- Multi-Product, where the client mandate includes combined
hedging and return-seeking objectives.
Record (LSE: REC) was admitted to trading on the London Stock
Exchange on 3(rd) December 2007.
This announcement includes information with respect to Record's
financial condition, its results of operations and business,
strategy, plans and objectives. All statements in this document,
other than statements of historical fact, including words such as
"anticipates", "expects", "intends", "plans", "believes", "seeks",
"estimates", "may", "will", "continue", "project" and similar
expressions, are forward-looking statements.
These forward-looking statements are not guarantees of the
Company's future performance and are subject to risks,
uncertainties and assumptions that could cause the actual future
results, performance or achievements of the Company to differ
materially from those expressed in or implied by such
forward-looking statements.
The forward-looking statements contained in this document are
based on numerous assumptions regarding Record's present and future
business and strategy and speak only as at the date of this
announcement.
The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statements contained in this announcement whether as a result of
new information, future events or otherwise.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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