TIDMREC
RNS Number : 7752H
Record PLC
17 July 2012
17 JULY 2012
RECORD PLC
FIRST QUARTER TRADING UPDATE
Record plc ("Record" or the "Company"), the specialist currency
manager, announces today that as at 30(th) June 2012 the Group's
assets under management equivalents ("AuME") totalled $29.9 billion
(31(st) March 2012: $30.9 billion).
AuME expressed in Sterling as at 30(th) June 2012 totalled
GBP19.1 billion (31(st) March 2012: GBP19.3 billion).
1. AuME composition
Record saw a slight overall decrease in AuME when expressed in
both US Dollars and Sterling during the period between 31(st) March
2012 and 30(th) June 2012. The composition of AuME at 30(th) June
2012 was as follows:
AuME $ bn
------------------------------------------------------------
30(th) June 2012 31(st) March 2012
--------------------- ----------------- ------------------
Dynamic Hedging 9.4 9.9
Passive Hedging 19.1 18.9
Currency for Return
(Note 1) 1.3 1.8
--------------------- ----------------- ------------------
Cash & Futures 0.1 0.3
--------------------- ----------------- ------------------
Total 29.9 30.9
--------------------- ----------------- ------------------
Note 1: This includes $0.8 billion of Emerging Market strategies
(31(st) March 2012 $0.8 billion).
As previously announced, in early April, the largest remaining
investor in the Active Forward Rate Bias Pooled Currency for Return
fund (Cash Plus) redeemed its investment. This led to the closure
of the fund as the remaining fund size was unviable, with other
investors either redeeming or switching into other pooled funds.
Record continues to offer pooled funds in Passive Forward Rate
Bias, Emerging Market and Euro Stress strategies, as well as
segregated Active Forward Rate Bias mandates that maintain this
product's live track record.
2. AUME Movement
Net client AuME flows in the three months to 30(th) June 2012 by
product were as follows:
Net client AuME flows - $ bn
--------------------------------------------------------------
3 months to 3 months to
30(th) June 2012 31(st) March 2012
--------------------- ------------------ -------------------
Dynamic Hedging - (0.1)
Passive Hedging 0.5 3.6
Currency for Return (0.4) -
--------------------- ------------------ -------------------
Cash & Futures (0.1) 0.1
--------------------- ------------------ -------------------
Total 0.0 3.6
--------------------- ------------------ -------------------
Record had 40 clients at 30(th) June 2012, compared with 41 at
31(st) March 2012.
The factors other than client flows which have impacted AuME
during the quarter, totalling -$1.0 billion, were:
(i) Movements in global stock and other markets: -$0.1bn
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;
(ii) Exchange rate movements: -$0.9bn
Exchange rate movements during the period affect the conversion
of non-US Dollar
mandate sizes into US Dollar AuME.
Our Dynamic Hedging programmes performed as expected for US
clients during the quarter. The US Dollar followed a volatile path
during the quarter especially against the Euro and the Japanese
Yen. As the US Dollar strengthened the Dynamic hedging programmes
protected clients against the decline in the value of foreign
currencies capturing over a third of the US Dollar strength.
For UK-based Dynamic Hedging clients the programmes also
performed as expected. Sterling declined in value during the
quarter against the background of elevated levels of volatility
especially in the Japanese Yen and the US Dollar. This elevated
volatility resulted in a negative quarterly performance for UK
based Dynamic Hedging clients.
Investment performance in Record's established Active Forward
Rate Bias (FRB) product was negative during the quarter ending
30(th) June 2012 and for an un-geared portfolio equated to a
negative return of 1.02% over the quarter (3 months to 31(st) March
2012: positive return of 1.63%). This compares to a positive return
in the quarter of 0.04% 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 the absence of risk management
costs.
Investment performance in Record's systematic Emerging Market
product was negative during the quarter ending 30(th) June 2012 and
for an un-geared portfolio equated to a negative return of 2.95%
over the quarter (3 months to 31(st) March 2012: positive return of
6.42%). This product will reach the third anniversary of its live
track record in November 2012.
3. AVERAGE FEE RATES
During the quarter to 30(th) June 2012, fee rates for the
Hedging products remained broadly unchanged from the previous
quarter. Average fee rates for Currency for Return products
declined marginally due to changes in the composition of these
mandates.
4. CHIEF EXECUTIVE'S COMMENT
Chief Executive James Wood-Collins, commenting on trading, said
"Overall AuME declined during the period due to the previously
announced closure of the last remaining Active FRB pooled fund and
as a result of declines in equity markets that affected our hedging
mandates. This was partially offset by flows into Passive
Hedging.
"We continue to focus our attention on marketing our products in
our key markets of the UK, North America and Switzerland. The level
of engagement with prospective clients is encouraging, particularly
for Passive Hedging in Switzerland and for Dynamic Hedging and
related strategies in North America. Whilst we have not secured any
significant new mandates during the period, we have responded to a
number of requests for proposals, particularly in Switzerland.
"We are confident that progress can be made in acquiring new
business by the end of the current financial year."
Record will announce its second quarter trading update on 16(th)
October 2012.
Ends
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:
- 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;
- 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; and
- Currency for Return, formerly known as Absolute Return, in
which Record enters into currency contracts for clients with the
objective of generating positive returns.
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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