TIDMREC
RNS Number : 4348K
Record PLC
15 July 2011
RECORD PLC
FIRST QUARTER TRADING UPDATE
Record plc ("Record" or the "Company"), the specialist currency
manager, announces today that as at 30(th) June 2011 the Group's
assets under management equivalents ("AuME") totalled $31.4 billion
(31(st) March 2011: $31.4 billion).
AuME expressed in Sterling as at 30(th) June 2011 totalled
GBP19.5 billion (31(st) March 2011: GBP19.6 billion).
1. AuME composition
Record saw no change in overall AuME when expressed in US
Dollars and a marginal fall when expressed in Sterling during the
period between 31(st) March 2011 and 30(th) June 2011. The
composition of AuME at 30(th) June 2011 was as follows:
AuME $ bn
----------------------------------------------------------------
30(th) June 2011 31(st) March 2011
--------------------- ------------------- --------------------
Currency for Return
Segregated (Note 1) 2.2 2.2
Pooled 1.2 1.2
-------- --------
Currency for Return
Sub Total 3.4 3.4
Dynamic Hedging 12.1 11.9
Passive Hedging 15.5 15.7
Cash & Futures 0.4 0.4
--------------------- -------- --------- -------- ----------
Total 31.4 31.4
--------------------- -------- --------- -------- ----------
Note 1: This includes $1.1bn of Emerging Market strategies
(31(st) March 2011 $1.1bn).
2. AuME MOVEMENT
Net client AuME flows in the three months to 30(th) June 2011 by
product were as follows:
Net client AuME flows - $ bn
---------------------------------------------------------------
3 mths to 30(th) 3 mths to 31(st)
June 2011 March 2011
--------------------- ------------------- -------------------
Currency for Return
Segregated (0.1) (0.6)
Pooled - (0.1)
--------- ---------
Currency for Return
Sub Total (0.1) (0.7)
Dynamic Hedging 0.2 (0.1)
Passive Hedging (0.5) (0.2)
Cash & Futures - -
--------------------- --------- -------- --------- --------
Total (0.4) (1.0)
--------------------- --------- -------- --------- --------
Record had 44 clients at 30(th) June 2011, compared to 46 at
31(st) March 2011.
The factors other than client flows which impacted AuME during
the quarter, totalling $0.4 billion, were:
(i) Exchange rate movements: +$1.0bn 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: $-bn Investment
returns are compounded on a geared basis into the AuME of the
pooled funds and so impact AuME.
Our Dynamic Hedging product performed as expected during the
quarter and for our US clients allowed them to capture most of the
overseas currencies' strength at the beginning of the quarter as
the US dollar weakened. This was partially reversed towards the end
of the quarter.
For the UK based Dynamic Hedging clients, Sterling depreciated
towards the end of the quarter relative to other developed world
currencies which resulted in our Dynamic Hedging product capturing
a portion of the overseas currencies strength.
Investment performance in Record's established active Forward
Rate Bias (FRB) product was negative during the quarter ending
30(th) June 2011 and for an un-geared portfolio equated to a
negative return of -0.32% over the quarter (12 months to 31(st)
March 2011: negative return of -3.39%). This compares to a positive
return in the quarter of 0.50% for the FTSE Currency FRB10 index
(excess return in Sterling). The FRB10 index has outperformed the
active FRB product principally because of the index's greater
exposure to less liquid currencies and absence of risk management
costs.
3. AVERAGE FEE RATES
During the quarter to 30(th) June 2011, fee rates for both
Passive Hedging and Currency for Return were maintained. As
announced on 17(th) March, we have re-negotiated the fees on our
largest Dynamic Hedging mandate to a tiered management fee,
resulting in a net fee reduction from this client of GBP2.9 million
on an annualised basis. This reduced the average fee rate on
Dynamic Hedging from 1(st) April 2011.
4. CHIEF EXECUTIVE'S COMMENT
Chief Executive James Wood-Collins, commenting on trading, said
"The level of AuME has been stable during the first quarter of the
financial year across all products.
We continue to market Dynamic Hedging in both the UK and US.
Whilst we are not aware of imminent significant additions, we are
hopeful of building on the previously-announced but not yet
commenced GBP0.5 billion UK-based Dynamic Hedging mandate from the
second half of the financial year. In Passive Hedging, we have seen
a number of enquiries and RFPs and believe we will secure further
mandates in the current financial year.
In June we launched the Euro Stress Fund and seeded this product
with a GBP1 million investment from the Group. The addition of the
Euro Stress Fund means that Record now has four strategies in
Currency for Return (active Forward Rate Bias (FRB), passive FRB,
Emerging Markets and Euro Stress) to complement the two hedging
products (Passive Hedging and Dynamic Hedging)."
Record will announce its second quarter trading update on 14(th)
October 2011.
For further information, please contact:
Record plc Tel: +44 (0) 1753 852 222
James Wood-Collins
Paul Sheriff
MHP Tel: +44 (0) 20 3128 8100
Nick Denton
John Olsen
Vicky Watkins
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 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 company news service from the London Stock Exchange
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