TIDMREC
RNS Number : 3824C
Record PLC
19 October 2020
19 OCTOBER 2020
RECORD PLC
SECOND QUARTER TRADING UPDATE
Growth in AUME of 4%, ongoing new business momentum with $8
billion Dynamic Hedging mandate win
Record plc ("Record" or "the Company"), the specialist currency
manager, today announces a trading update for the three months
ended 30(th) September 2020.
Highlights
-- Assets under management equivalents ("AUME") expressed in US
dollars grew by 4% over the quarter to $65.9 billion as at 30(th)
September 2020.
-- A new Dynamic Hedging mandate of approximately $8 billion was
announced during the quarter. The mandate has now started and will
build up in tranches over time.
-- Management fee rates remained broadly unchanged during the quarter.
-- Panmure Gordon (UK) Limited ("Panmure Gordon") were appointed
as the Company's sole Corporate Broker with effect from 14 October
2020.
Chief Executive of Record plc, Leslie Hill, commented:
"During Record's second quarter considerable progress was made
against our growth objectives. In particular, it was pleasing to
announce our Dynamic Hedging mandate win of approximately $8
billion, which will add material scale to our AUME over time.
Notwithstanding the size of the mandate, no further investment in
systems or personnel is required, underlining the scalability of
our operational systems.
"Following updated Government guidance with respect to Covid-19
during the quarter, the majority of our workforce continues to work
remotely with no detriment to the level or quality of service
provided to our clients. Our operational infrastructure gives us
the capability and resilience to continue to work remotely for as
long as is necessary whilst ensuring the safety and wellbeing of
our employees.
"One of my strategic priorities for the current financial year
was that of talent retention and development and planning for
generational change. Progress was made in the quarter through the
launch of Record's Joint Share Ownership Plan ("JSOP") in
September, a new share-based incentive plan which seeks to retain
and incentivise key staff below Board level, and to further align
their interests with shareholders.
"Our focus on innovation and the diversification of our product
range continues, with tangible progress having been made in the
development of our market-first Impact/ESG bond offering, upon
which we expect to provide further information in due course.
"As we approach the end of the calendar year, we continue to
monitor the ongoing Brexit negotiations closely. We will ensure the
continuity of service to our current EU-27 based clients, and our
plans are in hand to retain the ability to market to potential new
EU-27 clients, irrespective of the final outcome of
negotiations."
Further Trading Analysis
1. AUME composition
The Group's AUME expressed in US dollars as at 30(th) September
2020 totalled $65.9 billion (30(th) June 2020 totalled $63.3
billion), and expressed in sterling totalled GBP51.0 billion
(30(th) June 2020: GBP51.2 billion). AUME expressed in US dollars
increased by 4% between 30(th) June 2020 and 30(th) September 2020
and remained broadly flat when expressed in sterling. The
composition of AUME by product was as follows:
AUME $ billion
30(th) September 30(th) June 2020
2020
----------------- -----------------
Dynamic Hedging 3.2 2.9
Passive Hedging 55.6 53.9
Currency for Return 3.4 3.1
Multi-Product 3.5 3.2
----------------- -----------------
Cash & Futures 0.2 0.2
----------------- -----------------
Total 65.9 63.3
----------------- -----------------
2. AUME Movement
Net client AUME flows in the three months to 30(th) September
2020 by product were as follows:
Net client AUME flows - $ billion
3 months to 30(th) 3 months to 30(th)
September 2020 June 2020
------------------- -------------------
Dynamic Hedging 0.4 0.1
Passive Hedging (0.2) (0.6)
Currency for Return 0.0 0.0
Multi-Product 0.0 0.0
------------------- -------------------
Cash & Futures 0.0 0.0
------------------- -------------------
Total 0.2 (0.5)
------------------- -------------------
Record had 74 clients at 30(th) September 2020 (30(th) June
2020: 72 clients).
Other than client flows, the factors which have had an aggregate
impact on AUME during the quarter of +$2.4 billion were as
follows:
(i) Exchange rate movements and mandate volatility targeting: +$1.9 bn
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: +$0.5bn
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
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.
Record's Dynamic Macro Currency strategy which uses a mix of
both discretionary and systematic investment allocations saw
negative performance in the quarter, with investment performance
for the three months to 30(th) September 2020 of -0.41% (30(th)
June 2020: -3.39%).
Record's return-seeking strategies using more systematic
investment allocations also saw negative performance in the
quarter.
Investment performance of the FTSE Currency FRB10 index (excess
return in sterling) during the three months to 30(th) September
2020 was -0.87% (30(th) June 2020: +2.13%).
Record's Emerging Market product investment performance was
negative during the quarter and for an un-geared portfolio equated
to a quarterly return of -2.12% (30(th) June 2020: +3.67%).
Annualised performance since inception (30(th) November 2009) for
an un-geared portfolio was +1.28% 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 -2.20% (30(th) June
2020: +0.35%). Annualised performance since inception (31(st) July
2012) for the portfolio was +0.33% p.a.
4. AVERAGE FEE RATES AND PERFORMANCE FEES
During the quarter to 30(th) September 2020, fee rates remained
broadly unchanged from the previous quarter. No performance fees
were earned in the quarter.
During the quarter, a small number of Passive Hedging clients
elected to change from a management fee only to a combined lower
management fee and a performance-related fee, effective from 1(st)
October 2020. The impact will be a small decrease in the overall
average management fee rate achieved across Record's Passive
Hedging clients, although the change creates the opportunity for
Record to earn performance fees which over time may match or exceed
foregone management fees, dependent on market conditions.
Performance fees earned under this change will be disclosed in
quarterly Trading Updates in the ordinary course.
Record will announce its half year results on 24(th) November
2020 and its third quarter trading update on 22(nd) January
2021.
For further information, please contact:
Record plc Tel: +44 (0) 1753 852 222
Leslie Hill, Chief Executive Officer
Steve Cullen, Chief Finance Officer
Buchanan Tel: +44 (0) 20 7466 5000
Giles Stewart record@buchanan.uk.com
Henry Wilson
George Beale
Notes to Editors
Record plc
Founded in 1983, Record is an independent, specialist currency
manager and has established a market 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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTEASEKFEPEFFA
(END) Dow Jones Newswires
October 19, 2020 02:00 ET (06:00 GMT)
Record (LSE:REC)
Historical Stock Chart
From Apr 2024 to May 2024
Record (LSE:REC)
Historical Stock Chart
From May 2023 to May 2024