TIDMREC
RNS Number : 5578U
Record PLC
17 October 2014
RECORD PLC
SECOND QUARTER TRADING UPDATE
Record plc ("Record" or the "Company"), the specialist currency
manager, announces today that the Group's assets under management
equivalents ("AUME") as at 30(th) September 2014 totalled $52.6
billion (30(th) June 2014: $54.1 billion).
AUME expressed in Sterling as at 30(th) September 2014 totalled
GBP32.4 billion (30(th) June 2014: GBP31.6 billion).
1. AUME composition
Record saw a small decrease in AUME between 30(th) June 2014 and
30(th) September 2014 when expressed in US Dollars, and a small
increase when expressed in Sterling. The composition of AUME by
product was as follows:
AUME $ billion
-----------------------------------------------------------------
30(th) September 30(th) June 2014
2014
--------------------------- ----------------- -----------------
Dynamic Hedging 10.6 11.0
Passive Hedging 39.1 40.2
Currency for Return (Note
1) 2.6 2.5
--------------------------- ----------------- -----------------
Cash & Futures 0.3 0.4
--------------------------- ----------------- -----------------
Total 52.6 54.1
--------------------------- ----------------- -----------------
Note 1: This includes $0.4 billion of Emerging Market strategies
(30(th) June 2014: $0.8 billion). The change in the period reflects
a reallocation by an existing client from a bespoke Emerging Market
mandate to a Developed Market mandate.
2. AUME Movement
Net client AUME flows in the three months to 30(th) September
2014 by product were as follows:
Net client AUME flows - $ billion
---------------------------------------------------------------
3 months to 30(th) 3 months to 30(th)
September 2014 June 2014
--------------------- ------------------- -------------------
Dynamic Hedging (0.1) (0.6)
Passive Hedging (0.2) 0.9
Currency for Return 0.1 -
--------------------- ------------------- -------------------
Cash & Futures - 0.1
--------------------- ------------------- -------------------
Total (0.2) 0.4
--------------------- ------------------- -------------------
Net client AUME flows in Hedging and Currency for Return
products principally reflect amendments to mandate sizes for
existing clients.
Record had 49 clients at 30(th) September 2014 (30(th) June
2014: 48 clients).
The factors other than client flows which have impacted AUME
during the quarter had an aggregate impact of -$1.3 billion,
being:
(i) Exchange rate movements: -$3.2bn 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: +1.9bn
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 strengthened against all
G10 currencies, and as a result the returns of the hedging
programmes were positive over the quarter. The largest gains came
from hedges on the Euro, Swiss Franc and Japanese Yen, which
depreciated against the US Dollar resulting in the systematic
increase in hedge ratios for these currencies.
For UK-based Dynamic Hedging clients the programmes also
performed as expected, controlling hedging losses in response to
Sterling weakening against the basket of currencies in the
programmes. The main contributor to the negative performance was
the US Dollar, which strengthened against Sterling. Some offsetting
gains were made from hedging the Euro, which depreciated over the
quarter.
Investment performance in Record's established Active Forward
Rate Bias (FRB) product was positive during the quarter ending
30(th) September 2014 and for an ungeared portfolio equated to a
return of +1.36% over the quarter (3 months to 30(th) June 2014:
return of +0.07%). This compares to a -0.38% 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 (US Dollar, Norwegian Krone and Canadian Dollar). The FTSE
FRB10 Index Fund continues to track the index closely, on a
1.8x-geared basis.
Record's Emerging Market product investment performance was
positive during the quarter ending 30(th) September 2014 and for an
un-geared portfolio equated to a quarterly return of +0.28% (3
months to 30(th) June 2014: return of +1.11%). Annualised
performance since inception (30(th) November 2009) for an un-geared
portfolio is +1.95% p.a.
Investment performance in Record's live Multi-Strategy product
was also positive during the quarter ending 30(th) September 2014,
with positive contributions from three of the four strategies. For
an un-geared portfolio, the return was +0.66% over the quarter
ending 30(th) September 2014 (3 months to 30(th) June 2014: return
of +0.58%). Annualised performance since inception (31(st) July
2012) for an un-geared portfolio is +2.33% p.a.
3. AVERAGE FEE RATES
During the quarter to 30(th) September 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:
"Increasing divergence in central bank policy, and the related
rise in volatility in currency markets, continue to generate
interest in our Currency for Return strategies, after a prolonged
period of little or no new demand. This has been accompanied by
more recent US Dollar appreciation which, if sustained, we would
expect to foster further interest in currency management amongst US
investors, as well as by renewed interest in hedging from UK
investors.
"We continue to see broad interest across our diversified
product range from potential clients and consultants in North
America, Switzerland and the UK. 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 half year results on 14(th) November
2014 and its third quarter trading update on 16(th) January
2015.
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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