Trading Statement
15 Oktober 2010 - 8:00AM
UK Regulatory
TIDMREC
RNS Number : 4375U
Record PLC
15 October 2010
RECORD PLC
SECOND QUARTER TRADING UPDATE
Record plc ("Record" or the "Company"), the specialist currency manager,
announces today that as at 30th September 2010 the Group's assets under
management equivalents ("AuME") totalled $30.8 billion (30th June 2010: $29.5
billion).
AuME expressed in Sterling as at 30th September 2010 totalled GBP19.5 billion
(30th June 2010: GBP19.7 billion).
1 AuME composition
Record saw an increase in AuME when expressed in US Dollars and a marginal
decrease in AuME when expressed in Sterling during the period between 30th June
2010 and 30th September 2010. The composition of AuME at 30th September 2010
was as follows:
+-----------------------+-------+--------+--------+--------+
| AuME $ bn |
+----------------------------------------------------------+
| |30th September | 30th June 2010 |
| | 2010 | |
+-----------------------+----------------+-----------------+
| Currency for Return | | | | |
+-----------------------+-------+--------+--------+--------+
| | 2.1 | | 2.7 | |
| Segregated | | | | |
+-----------------------+-------+--------+--------+--------+
| Pooled | 1.9 | | 2.5 | |
+-----------------------+-------+--------+--------+--------+
| Currency for Return | | 4.0 | | 5.2 |
| Sub Total | | | | |
+-----------------------+-------+--------+--------+--------+
| Dynamic Hedging | | 11.5 | | 10.6 |
+-----------------------+-------+--------+--------+--------+
| Passive Hedging | | 14.8 | | 13.1 |
+-----------------------+-------+--------+--------+--------+
| Cash & Futures | | 0.5 | | 0.6 |
+-----------------------+-------+--------+--------+--------+
| Total | | 30.8 | | 29.5 |
+-----------------------+-------+--------+--------+--------+
2 AuME MOVEMENT
Net client AuME flows in the three months to 30th September 2010 by product were
as follows:
+-----------------------+-------+--------+--------+--------+
| Net client AuME flows - $ bn |
+----------------------------------------------------------+
| | 3 mths to | 3 mths to 30th |
| | 30th | June 2010 |
| | September | |
| | 2010 | |
+-----------------------+----------------+-----------------+
| Currency for Return | | | | |
+-----------------------+-------+--------+--------+--------+
| |(0.6) | | (0.8) | |
| Segregated | | | | |
+-----------------------+-------+--------+--------+--------+
| Pooled |(0.7) | | (0.9) | |
+-----------------------+-------+--------+--------+--------+
| Currency for Return | | (1.3) | | (1.7) |
| Sub Total | | | | |
+-----------------------+-------+--------+--------+--------+
| Dynamic Hedging | | - | | - |
+-----------------------+-------+--------+--------+--------+
| Passive Hedging | | 0.6 | | 0.2 |
+-----------------------+-------+--------+--------+--------+
| Cash & Futures | |(0.2) | | (0.2) |
+-----------------------+-------+--------+--------+--------+
| Total | | (0.9) | | (1.7) |
+-----------------------+-------+--------+--------+--------+
Record had 57 clients at 30th September 2010, compared to 76 at 30th June 2010.
The factors other than client flows which impacted AuME during the quarter,
totalling $2.2 billion, were:
+-------+-----------------------------------------------+---------+
| (i) | Exchange rate movements: | $1.6bn |
| | | |
+-------+-----------------------------------------------+---------+
| | 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: | $0.6bn |
| | | |
+-------+-----------------------------------------------+---------+
| | Substantially all the Passive and Dynamic Hedging, |
| | and some of the Currency for Return mandates are |
| | linked to stock and other market levels. |
| | Consequently AuME is affected by movements in these |
| | markets; |
+-------+---------------------------------------------------------+
| (iii) | Pooled fund investment performance: | $0.0bn |
| | | |
+-------+-----------------------------------------------+---------+
| | Investment returns are compounded on a geared basis |
| | into the AuME of the pooled funds and so impact |
| | AuME. |
+-------+-----------------------------------------------+---------+
Investment performance in Record's established Currency for Return product was
negative during the quarter ending 30th September 2010 and for an un-geared
portfolio equated to a negative return of -0.27% over the quarter (3 months to
30th June 2010: decrease of 2.22%). This compares to a negative return in the
quarter of -2.11% for the FTSE Currency FRB5 index (in Sterling).
3 AVERAGE FEE RATES
During the quarter to 30th September 2010, average management fee rates were
maintained across all products.
4 CHAIRMAN'S COMMENT
Chairman Neil Record, commenting on trading, said "Our Dynamic Hedging product
continues to perform as expected by allowing our clients to benefit from foreign
currency strength as was the case over the last quarter from the US perspective,
and protecting them from foreign currency weakness as was the case from the UK
perspective. In the short term, we are focussing our marketing and sales effort
on promoting this product in the US and UK. Whilst it is clearly disappointing
not to have won any new mandates in the first six months, we continue to
generate interest in Dynamic Hedging and are hopeful that there should be
further client additions before the end of the current financial year.
For the Currency for Return product, investment performance in the first half
was negative leading to an overall return of our Alpha Composite of -2.49%. As
a result of the continuing short term poor performance and the overall three
year negative performance, we anticipate further redemptions in the Currency for
Return product in the coming months. We remain confident in the long-term
performance and committed to the long-term investment strategy for this product.
During this challenging period we have continued to communicate the investment
philosophy and long term track record with investment consultants and with our
clients.
We continue to market our internally seeded Emerging Markets product and our
first index tracking product. We are hopeful that we can generate a number of
mandate wins in the second half of the year.
As announced on 10th September, I have relinquished the combined role of
Chairman and Chief Executive. We appointed James Wood-Collins as Chief
Executive and James commenced this role on 1st October."
Record will announce its half year results on 16th November 2010.
For further information, please contact:
Record plc
Tel: +44 (0) 1753 852 222
Neil Record
James Wood-Collins
Paul Sheriff
MHP
Tel: +44 (0)20 7357 9477
Nick Denton
John Olsen
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 Dynamic Hedging and Currency for Return for
institutional clients.
The Group has three principal product lines:
- Currency for Return, formerly known as Absolute Return, in which Record
enters into currency contracts for clients with the objective of generating
positive returns;
- Dynamic Hedging, formerly known as 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 or partially 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
END
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