TIDMREC
RNS Number : 6578M
Record PLC
18 July 2014
RECORD PLC
FIRST QUARTER TRADING UPDATE
Record plc ("Record" or the "Company"), the specialist currency
manager, announces today that as at 30(th) June 2014 the Group's
assets under management equivalents ("AUME") totalled $54.1 billion
(31(st) March 2014: $51.9 billion).
AUME expressed in Sterling as at 30(th) June 2014 totalled
GBP31.6 billion (31(st) March 2014: GBP31.1 billion).
1. AUME composition
Record saw a small increase in AUME during the period between
31(st) March 2014 and 30(th) June 2014. The composition of AUME by
product was as follows:
AUME $ billion
------------------------------------------------------------------
30(th) June 2014 31(st) March 2014
--------------------------- ----------------- ------------------
Dynamic Hedging 11.0 11.3
Passive Hedging 40.2 37.9
Currency for Return (Note
1) 2.5 2.4
--------------------------- ----------------- ------------------
Cash & Futures 0.4 0.3
--------------------------- ----------------- ------------------
Total 54.1 51.9
--------------------------- ----------------- ------------------
Note 1: This includes $0.8 billion of Emerging Market strategies
(31(st) March 2014: $0.8 billion).
2. AUME Movement
Net client AUME flows in the three months to 30(th) June 2014 by
product were as follows:
Net client AUME flows - $ billion
---------------------------------------------------------------
3 months to 30(th) 3 months to 31(st)
June 2014 March 2014
--------------------- ------------------- -------------------
Dynamic Hedging (0.6) (0.9)
Passive Hedging 0.9 1.3
Currency for Return - -
--------------------- ------------------- -------------------
Cash & Futures 0.1 (0.1)
--------------------- ------------------- -------------------
Total 0.4 0.3
--------------------- ------------------- -------------------
Net client AUME flows in Dynamic Hedging reflect the termination
of a mandate announced on 1(st) April 2014. The net client inflows
in Passive Hedging are attributable principally to new mandates
with existing clients.
Record had 48 clients at 30(th) June 2014 (31(st) March 2014: 48
clients).
The factors other than client flows which have impacted AUME
during the quarter had an aggregate impact of +$1.8 billion,
being:
(i) Exchange rate movements: + $0.1bn
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: +$1.7bn
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 a basket
of exposure currencies, and as a result the returns of the hedging
programmes were negative. Losses came from hedges on the Euro,
which range traded against the US Dollar generating risk-management
costs, and on the Japanese Yen, Canadian Dollar and Australian
Dollar which strengthened against the US Dollar. The systematic
lowering of hedge ratios in these latter currencies helped to limit
the losses.
For UK-based Dynamic Hedging clients the programmes also
performed as expected delivering positive returns as Sterling
strengthened against a basket of hedged currencies over the
quarter. The programmes participated in Sterling gains during April
and June, while costs associated with adjusting hedge ratios
affected performance in May when Sterling weakened marginally. The
main contributors to the positive performance were the US Dollar
and Euro.
Investment performance in Record's established Active Forward
Rate Bias (FRB) product was positive during the quarter ending
30(th) June 2014 and for an ungeared portfolio equated to a return
of +0.07% over the quarter (3 months to 31(st) March 2014: return
of -0.66%). This compares to a +0.50% return in the quarter for the
FTSE Currency FRB10 index (excess return in Sterling). This
variance is the result of differences in the allocations of 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 30(th) June 2014 and for an
un-geared portfolio equated to a return of +1.11% over the quarter
(3 months to 31(st) March 2014: return of +0.35%). Annualised
performance since inception (30(th) November 2009) for an un-geared
portfolio is +2.00% p.a.
Investment performance in Record's Multi-Strategy product was
positive during the quarter ending 30(th) June 2014 and for an
un-geared portfolio equated to a return of +0.58% over the quarter
(3 months to 31(st) March 2014: return of -0.36%). Annualised
performance since inception (31(st) July 2012) for an un-geared
portfolio is +2.29% p.a.
3. AVERAGE FEE RATES
During the quarter to 30(th) June 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 "Growth in our Passive Hedging AUME has continued
since the start of the financial year through net inflows of $0.9
billion, principally into new mandates for existing clients, and we
continued to see further modest inflows into the FTSE FRB10 Index
Fund. As already announced, we also saw the termination of a
Dynamic Hedging mandate at the start of the quarter.
"It remains the case that many US investors have greater
exposure now to foreign currencies than has historically been the
case and, whilst interest in currency hedging observed since last
summer has abated somewhat in the absence of pronounced US Dollar
appreciation, this interest could return quickly. We've also seen
the re-emergence of interest in Currency for Return strategies, and
we hope to build further on the recent flows into the FTSE FRB10
Index Fund.
"Our currency management strategies continue to be of interest
to potential clients and consultants in North America, Switzerland
and the UK. Furthermore, our diversified product range and ability
to provide flexible, bespoke solutions means we are well-placed to
help investors with their varied currency requirements. Whilst
procurement processes are typically competitive, and their timing
uncertain, we are hopeful that further progress will be made in the
current financial year."
Record will announce its second quarter trading update on 17(th)
October 2014.
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
James Moncrieff
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
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