FOURTH QUARTER TRADING UPDATE
20 April 2010 - 8:00AM
UK Regulatory
TIDMREC
RNS Number : 4242K
Record PLC
20 April 2010
RECORD PLC
FOURTH QUARTER TRADING UPDATE
Record plc ("Record" or the "Company"), the specialist currency investment
manager, announces today that as at 31st March 2010 the Group's assets under
management equivalents ("AuME") totalled $34.0 billion (31st December 2009:
$35.7 billion).
AuME expressed in Sterling as at 31st March 2010 totalled GBP22.4 billion (31st
December 2009: GBP22.1 billion).
The Board anticipates that pre tax profits will be in line with market
expectations for the financial year ended 31st March 2010.
1 AuME composition
Although AuME expressed in US Dollars declined during the period between 31st
December 2009 and 31st March 2010, Record saw a marginal increase to AuME when
expressed in Sterling. The composition of AuME at 31st March 2010 was as
follows:
+--------------------+---------+--------+--------+--------+
| AuME $ bn |
+---------------------------------------------------------+
| | 31st March 2010 | 31st December |
| | | 2009 |
+--------------------+------------------+-----------------+
| Absolute Return | | | | |
+--------------------+---------+--------+--------+--------+
| | 3.6 | | 4.0 | |
| Segregated | | | | |
+--------------------+---------+--------+--------+--------+
| Pooled | 4.0 | | 5.3 | |
+--------------------+---------+--------+--------+--------+
| Absolute Return | | 7.6 | | 9.3 |
| Sub Total | | | | |
+--------------------+---------+--------+--------+--------+
| Active Hedging | | 12.0 | | 11.6 |
+--------------------+---------+--------+--------+--------+
| Passive Hedging | | 13.5 | | 13.5 |
+--------------------+---------+--------+--------+--------+
| Cash & Futures | | 0.9 | | 1.2 |
+--------------------+---------+--------+--------+--------+
| Total | | 34.0 | | 35.7 |
+--------------------+---------+--------+--------+--------+
2 AuME MOVEMENT
Net client AuME flows in the three months to 31st March 2010 by product were as
follows:
+--------------------+---------+--------+---------+--------+
| Net client AuME flows - $ bn |
+----------------------------------------------------------+
| | 3 mths to 31st | 3 mths to 31st |
| | March 2010 | December 2009 |
+--------------------+------------------+------------------+
| Absolute Return | | | | |
+--------------------+---------+--------+---------+--------+
| | (0.3) | | (0.3) | |
| Segregated | | | | |
+--------------------+---------+--------+---------+--------+
| Pooled | (0.7) | | (0.6) | |
+--------------------+---------+--------+---------+--------+
| Absolute Return | | (1.0) | | (0.9) |
| Sub Total | | | | |
+--------------------+---------+--------+---------+--------+
| Active Hedging | | - | | 0.4 |
+--------------------+---------+--------+---------+--------+
| Passive Hedging | | (0.1) | | - |
+--------------------+---------+--------+---------+--------+
| Cash & Futures | |(0.2) | | (0.1) |
+--------------------+---------+--------+---------+--------+
| Total | | (1.3) | | (0.6) |
+--------------------+---------+--------+---------+--------+
Record had 93 clients at 31st March 2010, compared to 102 at 31st December 2009.
The factors other than client flows which impacted AuME during the quarter,
totalling -$0.4 billion, were:
(i) Exchange rate movements:-$1.1bn
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 markets:
+$1.0bn
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 positive impact in the
quarter;
(iii) Pooled fund investment performance:
-$0.3bn
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 negative during
the quarter ending 31st March 2010 and for an un-geared portfolio equated to a
decrease of 1.18% over the quarter as a whole (year to 31st March 2010: decrease
of 0.73%).
3 AVERAGE FEE RATES
During the quarter to 31st March 2010, average management fee rates were
maintained across all products.
4 CHAIRMAN'S COMMENT
Chairman and CEO, Neil Record, commenting on trading, said "The active hedging
business has continued to grow in importance and now represents 35% of our AuME,
compared with 13% at 31st March 2009. This product, being systematic in nature,
continues to perform in line with client expectations and in particular has
generated significant value for our US clients over the quarter. We continue to
see interest in the active hedging product and anticipate seeing further client
additions within the next twelve months.
For the absolute return product, investment performance in the quarter was
negative, leading to negative performance for the financial year of our Alpha
Composite of -0.73%. This compares to a negative return of -3.49% for
the whole of the financial year ended 31st March 2009. Whilst the performance
to 31st March 2010 compares favourably to the FTSE Currency FRB 5 index that
returned -4.78% (in Sterling) over the same period, there remains a risk that
there may be further withdrawals over the coming months. We remain confident in
the long-term performance and committed to the long-term investment strategy for
this product.
Our internally seeded Emerging Markets currency product (which is two times
geared) has had a strong performance since inception on 5th November 2009,
returning 12.1% to 31st March 2010."
Record will announce its financial results for the year ended 31st March 2010 on
15th June 2010.
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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