TIDMREC
RNS Number : 2281V
Record PLC
20 July 2018
RECORD PLC
FIRST QUARTER TRADING UPDATE
Record plc ("Record" or "the Company"), the specialist currency
manager, announces today that the Group's assets under management
equivalents ("AUME") as at 30(th) June 2018 totalled $61.9 billion
(31(st) March 2018: $62.2 billion).
AUME expressed in sterling as at 30(th) June 2018 totalled
GBP46.9 billion (31(st) March 2018: GBP44.3 billion).
1. AUME composition
AUME expressed in US dollars decreased by 0.5% between 31(st)
March 2018 and 30(th) June 2018 and increased by 5.9% when
expressed in sterling. The composition of AUME by product was as
follows:
AUME $ billion
30(th) June 2018 31(st) March 2018
----------------- ------------------
Dynamic Hedging 4.3 4.3
Passive Hedging 52.0 53.0
Currency for Return 2.3 1.6
Multi-Product 3.0 3.0
----------------- ------------------
Cash & Futures 0.3 0.3
----------------- ------------------
Total 61.9 62.2
----------------- ------------------
2. AUME Movement
Net client AUME flows in the three months to 30(th) June 2018 by
product were as follows:
Net client AUME flows - $ billion
3 months to 30(th) 3 months to 31(st)
June 2018 March 2018
------------------- -------------------
Dynamic Hedging 0.4 (0.1)
Passive Hedging (0.4) (1.5)
Currency for Return 0.6 -
Multi-Product - -
------------------- -------------------
Cash & Futures - -
------------------- -------------------
Total 0.6 (1.6)
------------------- -------------------
Record had 64 clients at 30(th) June 2018 (31(st) March 2018: 60
clients).
The inflow of $0.6 billion in Currency for Return represents the
previously-announced new mandate of $0.3 billion scaled in
accordance with its volatility target. Fees for this mandate will
be charged on a management plus performance fee basis.
Other than client flows, the factors which have had an aggregate
impact on AUME during the quarter of -$0.9 billion were as
follows:
(i) Movements in global stock and other markets: +$1.2bn
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.
(ii) Exchange rate movements and mandate volatility targeting: -$2.1bn
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.
3. Investment performance
For US Dynamic Hedging clients during the quarter, hedging
returns in the programmes were positive, where initially low hedge
ratios rose in line with US dollar strength, helping to protect
against currency losses in the underlying assets.
Investment performance of the FTSE Currency FRB10 index (excess
return in sterling) during the three months to 30(th) June 2018 was
1.18% (three months to 31(st) March 2018 was -0.65%). The FTSE
FRB10 Index Fund continued to track the index closely, on a 1.8x
geared basis.
Record's Emerging Market product investment performance was
negative during the quarter and for an un-geared portfolio equated
to a quarterly return of -2.41% (three months to 31st March 2018:
return of -0.73%). Annualised performance since inception (30th
November 2009) for an un-geared portfolio was +1.73% p.a.
Investment performance in the Multi-Strategy product that
comprises the FTSE Currency FRB10, Emerging Market, Value and
Momentum strategies was negative during the quarter. For an
un-geared portfolio, the return was -1.09% over the quarter (three
months to 31(st) March 2018: return of -0.68%). Annualised
performance since inception (31(st) July 2012) for Record's
longest-standing Multi-Strategy mandate on an un-geared portfolio
basis is +1.06% p.a.
4. AVERAGE FEE RATES AND PERFORMANCE FEES
During the quarter to 30(th) June 2018, fee rates for most
products remained broadly unchanged from the previous quarter,
taking into account the changes to management plus performance fees
already disclosed in respect of some products. Record earned
performance fees of GBP1.0 million during the quarter, all of which
related to performance over the six month period ended 30(th) June
2018.
5. CHIEF EXECUTIVE'S COMMENT
Chief Executive James Wood-Collins, commenting on business
development, said:
"The Group continues to focus on enhancing its products and on
building a more diverse portfolio both in terms of clients and in
the mix of revenue streams.
"The announcement of Record's first performance fees since March
2016 reinforces the progress made in product enhancement and
diversification, and upon which we hope to build going forward.
"With our diversified product suite and our ability to offer
tailored solutions to clients and potential clients, we are
confident that further progress can be made in the current
financial year."
Record will announce its second quarter trading update on 19(th)
October 2018.
For further information, please contact:
Record plc Tel: +44 (0) 1753 852 222
James Wood-Collins, Chief Executive Officer
Steve Cullen, Chief Finance Officer
MHP Tel: +44 (0) 20 3128 8100
Nick Denton record@mhpc.com
Ollie Hoare
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 3rd 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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