First Quarter Trading Update
21 Juli 2009 - 8:00AM
UK Regulatory
TIDMREC
RNS Number : 9797V
Record PLC
21 July 2009
21 JULY 2009
RECORD PLC
FIRST QUARTER TRADING UPDATE
Record plc ("Record" or the "Company"), the specialist currency investment
manager, announces today that as at 30th June 2009 the Group's assets under
management equivalents ("AuME") totalled $36.0 billion (31st March 2009: $31.5
billion).In addition, as referred to in the Final Results of 16th June 2009 and
not included in the above figures, contract discussions are expected to conclude
positively in the near future for the second significant US active hedging
mandate.
AuME expressed in Sterling as at 30th June 2009 totalled GBP21.9
billion (31st March 2009: GBP22.0 billion).
1. AuME composition
Record saw an increase in AuME and a decline in client numbers during the period
between 31st March 2009 and 30th June 2009. The composition of AuME at 30th
June 2009 was as follows:
+------------------------+------------+-----------+-----------+-----------+
| AuME $ bn |
+-------------------------------------------------------------------------+
| | 30th June 2009 | 31st March 2009 |
+------------------------+------------------------+-----------------------+
| Absolute Return | | | | |
+------------------------+------------+-----------+-----------+-----------+
| Segregated | 5.1 | | 8.3 | |
+------------------------+------------+-----------+-----------+-----------+
| Pooled | 6.5 | | 5.1 | |
+------------------------+------------+-----------+-----------+-----------+
| Absolute Return Sub | | 11.6 | | 13.4 |
| Total | | | | |
+------------------------+------------+-----------+-----------+-----------+
| Active Hedging | | 8.8 | | 4.0 |
+------------------------+------------+-----------+-----------+-----------+
| Passive Hedging | | 14.5 | | 13.0 |
+------------------------+------------+-----------+-----------+-----------+
| Cash & Futures | | 1.1 | | 1.1 |
+------------------------+------------+-----------+-----------+-----------+
| Total | | 36.0 | | 31.5 |
+------------------------+------------+-----------+-----------+-----------+
2. AuME MOVEMENT
Net client AuME flows in the three months to 30th June 2009 by product were as
follows:
+------------------------+------------+-----------+------------+-----------+
| Net client AuME flows - $ bn |
+--------------------------------------------------------------------------+
| | 3 mths to 30th | 3 mths to 31st March |
| | June 2009 | 2009 |
+------------------------+------------------------+------------------------+
| Absolute Return | | | | |
+------------------------+------------+-----------+------------+-----------+
| Segregated | (3.5) | | 0.2 | |
+------------------------+------------+-----------+------------+-----------+
| Pooled | (0.2) | | (1.0) | |
+------------------------+------------+-----------+------------+-----------+
| Absolute Return Sub | | (3.7) | | (0.8) |
| Total | | | | |
+------------------------+------------+-----------+------------+-----------+
| Active Hedging | | 4.5 | | (0.1) |
+------------------------+------------+-----------+------------+-----------+
| Passive Hedging | | 0.3 | | (0.2) |
+------------------------+------------+-----------+------------+-----------+
| Cash & Futures | | (0.2) | | (0.5) |
+------------------------+------------+-----------+------------+-----------+
| Total | | 0.9 | | (1.6) |
+------------------------+------------+-----------+------------+-----------+
Record had 119 clients at 30th June 2009, compared to 121 at 31st March 2009.
The factors other than client flows which impacted AuME during the quarter,
totalling +$3.6 billion, were:
+-------+----------------------------------------+----------+-----------------------+
| (i) | Exchange rate movements: | +$2.9bn |
+-------+----------------------------------------+----------------------------------+
| | Exchange rate movements during the period affect the conversion of non-US |
| | dollar mandate sizes into US Dollar AuME; |
+-------+---------------------------------------------------------------------------+
| (ii) | Movements in global stock and other | -$0.2bn |
| | markets: | |
+-------+----------------------------------------+----------------------------------+
| | Substantially all the Passive and Active Hedging, and some of the |
| | Absolute Return mandates are linked to stock and other market levels. |
| | Consequently AuME is affected by movements in these markets which had a |
| | negative impact in the quarter; |
+-------+---------------------------------------------------------------------------+
| (iii) | Pooled fund investment performance: | +$0.9bn |
+-------+---------------------------------------------------+-----------------------+
| | Investment returns are compounded on a geared basis into the AuME of the |
| | pooled funds and so impact AuME; |
+-------+----------------------------------------+----------+-----------------------+
Investment performance in Record's Absolute Return product was strongly positive
during the quarter ending 30th June 2009 and for an un-geared portfolio equated
to 229 bps over the quarter as a whole (quarter to 31st March 2009: decline of
44 bps).
3. AVERAGE FEE RATES
During the quarter to 30th June 2009, average management fee rates changed
broadly in line with previous announcements. Average management fee rates firmed
for both active and passive hedging products. Average management fee rates for
segregated absolute return mandates fell as a result of the client loss
announced on 13 May 2009 leading to a reduction in AuME of $1.8bn and a loss of
annualised income of approximately GBP5.1m. Average management fee rates for
pooled absolute return mandates fell following the change to management only fee
clients announced in the fourth quarter trading update of 21st April 2009.
Chairman and CEO, Neil Record, commenting on trading, said 'We are pleased to
report strong investment performance in the quarter with our Alpha Composite
return being 2.29% positive, compared to a negative return of 3.49% for the
whole of the financial year ended 31 March 2009. For our Cash Plus fund, being
seven times geared, this equated to a positive return of 17.8% during the
quarter.
The co-operation agreement with FTSE Group, as announced on 23rd June 2009, to
launch a range of currency indices in association with Record is expected to
lead to more widespread recognition that the currency forward rate bias is an
asset class, and we are well positioned to be a major beneficiary.
We continue to see interest in active hedging both in the US and UK.'
Record will announce its second quarter trading update for the quarter ending
30th September 2009 on 20th October 2009.
+---------------------------------------+--------------------------------+
| For further information, please | |
| contact: | |
+---------------------------------------+--------------------------------+
| | |
+---------------------------------------+--------------------------------+
| Record plc | Tel: +44 (0) 1753 852 222 |
+---------------------------------------+--------------------------------+
| Neil Record | |
+---------------------------------------+--------------------------------+
| Paul Sheriff | |
+---------------------------------------+--------------------------------+
| | |
+---------------------------------------+--------------------------------+
| Hogarth | Tel: +44 (0)20 7357 9477 |
+---------------------------------------+--------------------------------+
| Nick Denton | |
+---------------------------------------+--------------------------------+
| Julian Walker | |
+---------------------------------------+--------------------------------+
Notes to Editors
Record plc
Record is a specialist currency investment manager and provider of currency
hedging services for institutional clients. Founded in 1983, Record has
established a market leading position as a currency asset manager. Specifically,
the Group has a leading position in managing currency for Absolute Return for
institutional clients.
The Group has three principal product lines:
* currency for Absolute Return, in which Record enters into currency contracts for
clients with the objective of generating positive returns;
* active 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; and
* passive hedging, where Record seeks to eliminate fully the economic impact of
currency movements on elements of clients' investment portfolios that are
denominated in foreign currencies.
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 company news service from the London Stock Exchange
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