TIDMREC
RNS Number : 7406O
Record PLC
16 October 2012
16 OCTOBER 2012
RECORD PLC
SECOND QUARTER TRADING UPDATE
Record plc ("Record" or the "Company"), the specialist currency
manager, announces today that as at 30(th) September 2012 the
Group's assets under management equivalents ("AuME") totalled $32.5
billion (30(th) June 2012: $29.9 billion).
AuME expressed in Sterling as at 30(th) September 2012 totalled
GBP20.1 billion (30(th) June 2012: GBP19.1 billion).
1. AuME composition
Record saw an overall increase in AuME when expressed in both US
Dollars and Sterling during the period between 30(th) June and
30(th) September 2012. The composition of AuME at 30(th) September
2012 was as follows:
AuME $ bn
-----------------------------------------------------------
30(th) September 30(th) June 2012
2012
--------------------- ----------------- -----------------
Dynamic Hedging 9.9 9.4
Passive Hedging 21.0 19.1
Currency for Return
(Note 1) 1.5 1.3
--------------------- ----------------- -----------------
Cash & Futures 0.1 0.1
--------------------- ----------------- -----------------
Total 32.5 29.9
--------------------- ----------------- -----------------
Note 1: This includes $0.8 billion of Emerging Market strategies
(30(th) June 2012 $0.8 billion).
2. AUME Movement
Net client AuME flows in the three months to 30(th) September
2012 by product were as follows:
Net client AuME flows - $ bn
-------------------------------------------------------------
3 months to 3 months to
30(th) September 30(th) June 2012
2012
--------------------- ------------------ ------------------
Dynamic Hedging - -
Passive Hedging 1.1 0.5
Currency for Return 0.2 (0.4)
--------------------- ------------------ ------------------
Cash & Futures (0.1) (0.1)
--------------------- ------------------ ------------------
Total 1.2 -
--------------------- ------------------ ------------------
Record had 43 clients at 30(th) September 2012, compared with 40
at 30(th) June 2012.
The net flow into Currency for Return in the quarter includes
Record's first multi-strategy currency mandate, which represents an
important strategic step for the Group. The quarter also saw the
closure of the Euro Stress Fund, due to our recognising that
Eurozone stress has been more evident in markets other than
currency and we believe this may continue. Record will continue to
explore tactical and non-systematic investment strategies to
complement our longer-standing more systematic approaches.
The factors other than client flows which have impacted AuME
during the quarter, totalling $1.4 billion, were:
(i) Movements in global stock and other markets: $1.0bn
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: $0.4bn 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 performed strongly at the
beginning of the quarter and then declined in August and September.
As the US Dollar strengthened, the Dynamic Hedging programmes
protected clients against the decline in the value of foreign
currencies. As the path of the Dollar changed direction, the
programmes only partially offset clients' underlying gains.
For UK-based Dynamic Hedging clients the programmes also
performed as expected. Sterling strengthened during the quarter and
the Dynamic Hedging programmes delivered outperformance.
Investment performance in Record's established Active Forward
Rate Bias (FRB) product was positive during the quarter ending 30th
September 2012 and for an un-geared portfolio equated to a positive
return of 0.31% over the quarter (3 months to 30th June 2012:
negative return of 1.02%). This compares to a positive return in
the quarter of 1.02% for the FTSE Currency FRB10 index (excess
return in Sterling).
Investment performance in Record's systematic Emerging Market
product was positive during the quarter ending 30th September 2012
and for an un-geared portfolio equated to a positive return of
1.20% over the quarter (3 months to 30th June 2012: negative return
of 2.95%). 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) September 2012, fee rates for all
products remained broadly unchanged from the previous quarter.
4. CHIEF EXECUTIVE'S COMMENT
Chief Executive James Wood-Collins, commenting on trading, said
"Overall AuME increased during the period due to the commencement
of new passive hedging mandates. AuME has also increased over the
first six months of the financial year, with Passive Hedging having
grown by 11%.
"As we had anticipated, we have seen a notable increase in the
level of Requests for Proposals towards the end of the quarter,
particularly for Passive Hedging in Switzerland. We are hopeful
that we will be successful in securing additional mandates from
these proposals.
"Whilst the UK continues to be a competitive market with lower
levels of activity, we continue to see encouraging engagement with
prospective clients and investment consultants in North
America.
"We remain confident that further progress can be made in
acquiring new business during the second half of the financial
year."
Record will announce its half year results on 16(th) November
2012 and its third quarter trading update on 18(th) January
2013.
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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