TIDMREC
RNS Number : 8023Q
Record PLC
18 October 2013
18 OCTOBER 2013
RECORD PLC
SECOND QUARTER TRADING UPDATE
Record plc ("Record" or the "Company"), the specialist currency
manager, announces today that as at 30(th) September 2013 the
Group's assets under management equivalents ("AUME") totalled $37.7
billion (30(th) June 2013: $36.3 billion).
AUME expressed in Sterling as at 30(th) September 2013 totalled
GBP23.3 billion (30(th) June 2013: GBP23.9 billion).
1. AUME composition
Record saw an overall increase in AUME when expressed in US
Dollars whilst AUME expressed in Sterling decreased during the
period between 30(th) June 2013 and 30(th) September 2013. The
composition of AUME at 30(th) September 2013 was as follows:
AUME $ billion
-----------------------------------------------------------
30(th) September 30(th) June 2013
2013
--------------------- ----------------- -----------------
Dynamic Hedging 13.0 12.5
Passive Hedging 22.9 22.0
Currency for Return
(Note 1) 1.6 1.6
--------------------- ----------------- -----------------
Cash & Futures 0.2 0.2
--------------------- ----------------- -----------------
Total 37.7 36.3
--------------------- ----------------- -----------------
Note 1: This includes $0.8 billion of Emerging Market strategies
(30(th) June 2013: $0.8 billion).
2. AUME Movement
Net client AUME flows in the three months to 30(th) September
2013 by product were as follows:
Net client AUME flows - $ bn
-------------------------------------------------------------
3 months to 3 months to
30(th) September 30(th) June 2013
2013
--------------------- ------------------ ------------------
Dynamic Hedging 0.1 1.3
Passive Hedging - 0.3
Currency for Return (0.1) -
--------------------- ------------------ ------------------
Cash & Futures 0.1 0.1
--------------------- ------------------ ------------------
Total 0.1 1.7
--------------------- ------------------ ------------------
Record had 46 clients at 30(th) September 2013, compared with 45
at 30(th) June 2013.
The factors other than client flows which have impacted AUME
during the quarter, totalling $1.3 billion, were:
(i) Exchange rate movements: $1.5bn
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: -$0.2bn 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.
Our Dynamic Hedging programmes performed as expected for US
clients during the quarter. The US Dollar weakened against the
basket of currencies over the quarter, and as a result the returns
of the hedging programmes were negative. However, the extent of the
underperformance was limited by the systematic lowering of hedge
ratios across the portfolio.
For UK-based Dynamic Hedging clients the programmes also
performed as expected. Sterling strengthened towards the quarter
end, and as a result the programmes generated outperformance in
August and September. Hedge ratios systematically increased towards
the quarter end, allowing more of the Sterling strengthening to be
captured as positive hedging performance.
Investment performance in Record's established Active Forward
Rate Bias (FRB) product was negative during the quarter ending
30(th) September 2013 and for an ungeared portfolio equated to a
negative return of 0.59% over the quarter (3 months to 30(th) June
2013: negative return of 1.18%). This compares to a positive return
in the quarter of 0.67% for the FTSE Currency FRB10 index (excess
return in Sterling). This difference is due to the strong
performance of the Australian Dollar and New Zealand Dollar, which
have a heavier weighting in the FTSE Currency FRB10 index than in
Record's Active FRB product.
Investment performance in Record's Emerging Market product was
negative during the quarter ending 30(th) September 2013 and for an
un-geared portfolio equated to a negative return of 1.86% over the
quarter (3 months to 30(th) June 2013: negative return of
2.04%).
Investment performance in Record's Multi-Strategy product, which
reached its 12 month live track record in July 2013, was negative
during the quarter ending 30(th) September 2013 and for an
un-geared portfolio equated to a negative return of 0.47% over the
quarter (3 months to 30(th) June 2013: negative return of 0.15%).
Cumulative performance since inception (31(st) July 2012) is a
positive return of 2.90% for the fourteen months to 30(th)
September 2013.
3. AVERAGE FEE RATES
During the quarter to 30(th) September 2013, 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 once again during the quarter, with the
largest component being a $1.5 billion increase due to the impact
of the weakening US Dollar on the conversion of non-US Dollar
mandate sizes into US Dollar AUME. The Passive Hedging mandate of
approximately $8 billion to $10 billion remains on-track to start
during the current quarter, as previously announced.
"We continue to engage with prospective clients and investment
consultants in North America and Europe, receiving interest across
our product range, and participating in procurement processes. We
are hopeful that continued progress in securing new mandates can be
made in the current financial year."
Record will announce its half year results on 15(th) November
2013 and its third quarter trading update on 17(th) January
2014.
For further information, please contact:
Record plc Tel: +44 (0) 1753 852 222
James Wood-Collins
Steve Cullen
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, 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, 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
END
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