TIDMREC
RNS Number : 2547F
Record PLC
23 April 2014
RECORD PLC
FOURTH QUARTER TRADING UPDATE
Record plc ("Record" or the "Company"), the specialist currency
manager, announces today that as at 31(st) March 2014 the Group's
assets under management equivalents ("AUME") totalled $51.9 billion
(31(st) December 2013: $51.1 billion).
AUME expressed in Sterling as at 31(st) March 2014 totalled
GBP31.1 billion (31(st) December 2013: GBP30.8 billion).
1. AUME composition
Record saw a small increase in AUME during the period between
31(st) December 2013 and 31(st) March 2014. The composition of AUME
at 31(st) March 2014 was as follows:
AUME $ billion
-----------------------------------------------------------------
31(st) March 2014 31(st) December
2013
--------------------------- ------------------ ----------------
Dynamic Hedging 11.3 12.1
Passive Hedging 37.9 36.1
Currency for Return (Note
1) 2.4 2.5
--------------------------- ------------------ ----------------
Cash & Futures 0.3 0.4
--------------------------- ------------------ ----------------
Total 51.9 51.1
--------------------------- ------------------ ----------------
Note 1: This includes $0.8 billion of Emerging Market strategies
(31(st) December 2013: $0.8 billion).
2. AUME Movement
Net client AUME flows in the three months to 31(st) March 2014
by product were as follows:
Net client AUME flows - $ billion
---------------------------------------------------------------
3 months to 31(st) 3 months to 31(st)
March 2014 December 2013
--------------------- ------------------- -------------------
Dynamic Hedging (0.9) (0.3)
Passive Hedging 1.3 12.2
Currency for Return - -
--------------------- ------------------- -------------------
Cash & Futures (0.1) 0.1
--------------------- ------------------- -------------------
Total 0.3 12.0
--------------------- ------------------- -------------------
Net client AUME flows in dynamic hedging reflect the
commencement of the new dynamic hedging mandate of approximately
$600 million announced on 14(th) January 2014, but not the
termination of a dynamic hedging mandate announced on 1(st) April
2014. The net client outflows are attributable to reductions in
mandate size for some existing clients. Record also saw inflows of
approximately $20 million into the Record FTSE FRB10 Index Fund
during the quarter.
Record had 48 clients at 31(st) March 2014 (31(st) December
2013: 46 clients).
The factors other than client flows which have impacted AUME
during the quarter had an aggregate impact of +$0.5 billion,
being:
(i) Exchange rate movements: +$0.2bn 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: +$0.3bn
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 exposure currencies, and as a result the returns of the
hedging programme were negative. Losses came from hedges on the
Euro, which range-traded against the Dollar and consequently
generated risk-management costs, and on the Japanese Yen and
Australian Dollar, which strengthened against the Dollar. The
systematic lowering of hedge ratios in these latter two currencies
helped to limit these losses.
For UK-based Dynamic Hedging clients the programmes also
performed as expected, as Sterling range-traded over the quarter,
ultimately strengthening marginally. The programmes participated in
some Sterling gains during February, while costs associated with
adjusting hedge ratios affected performance in January and March.
These costs, and the range-bound nature of Sterling moves, meant
that the programmes modestly underperformed over the quarter.
Investment performance in Record's established Active Forward
Rate Bias (FRB) product was negative during the quarter ending
31(st) March 2014 and for an ungeared portfolio equated to a return
of -0.66% over the quarter (3 months to 31(st) December 2013:
positive return of 1.41%). This compares to a positive return in
the quarter of 1.31% for the FTSE Currency FRB10 index (excess
return in Sterling). This variance is the result of differences in
the allocations in these two strategies to some of the
stronger-performing currencies in the quarter. The FTSE FRB10 Index
Fund continues to track the index closely, on a 1.8x-geared
basis.
Investment performance in Record's Emerging Market product was
positive during the quarter ending 31(st) March 2014 and for an
un-geared portfolio equated to a return of 0.35% over the quarter
(3 months to 31(st) December 2013: positive return of 0.60%).
Annualised performance since inception (30(th) November 2009) for
an un-geared portfolio is 1.85% p.a.
Investment performance in Record's Multi-Strategy product was
negative during the quarter ending 31(st) March 2014 and for an
un-geared portfolio equated to a return of -0.36% over the quarter
(3 months to 31(st) December 2013: positive return of 1.28%(1)).
Cumulative performance since inception (31(st) July 2012) for an
un-geared portfolio of 3.83% for the twenty months to 31(st) March
2014 equates to annualised performance of 2.28% p.a.
3. AVERAGE FEE RATES
During the quarter to 31(st) March 2014, fee rates for all
products remained broadly unchanged from the previous quarter.
4. CHIEF EXECUTIVE'S COMMENT
Chief Executive James Wood-Collins, commenting on business
development, said "As already announced, this quarter has seen the
commencement of a new dynamic hedging mandate as well as modest but
welcome inflows into the FTSE FRB10 Index Fund. This news was
tempered somewhat by the termination of a dynamic hedging mandate
just following quarter-end.
"Given the size of Record's hedging mandates and the infrequent
nature of their being awarded, it is no surprise that this
quarter's inflows have been less dramatic than those of last
quarter. Furthermore, some of the interest from US investors in
currency hedging observed since last summer has weakened in the
absence of pronounced US Dollar appreciation, although this
interest could return quickly. Our currency management strategies
continue to be of interest to more potential clients and
consultants than has been the case historically, which we expect to
lead to opportunities in return-seeking mandates as well as in
hedging.
"Our diversified range of strategies and ability to provide
flexible, bespoke solutions means we are well placed to help
investors with their currency requirements. Whilst procurement
processes are typically competitive, and their timing uncertain, we
are hopeful that further progress can be made in 2014."
Record will announce its financial results for the year ended
31(st) March 2014 on 17(th) June 2014 and first quarter trading
update on 18(th) July 2014.
(1)The return on Record's Multi-strategy product for the quarter
ended 31st December 2013 was originally stated as +1.39% in the
quarterly update dated 17(th) January 2014, this has now been
confirmed as +1.28%.
For further information, please contact:
Record plc Tel: +44 (0) 1753 852 222
James Wood-Collins, Chief Executive Officer
Steve Cullen, Chief Finance Officer
MHP Tel: +44 (0) 20 3128 8100
Nick Denton record@mhpc.com
Vicky Watkins
Nick Hayns
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 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
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