TIDMREC
RNS Number : 1872L
Record PLC
24 April 2015
24 April 2015
RECORD PLC
FOURTH 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 31(st) March 2015 totalled $55.4 billion
(31(st) December 2014: $52.7 billion).
AUME expressed in Sterling as at 31(st) March 2015 totalled
GBP37.3 billion (31(st) December 2014: GBP33.8 billion).
1. AUME composition
Record saw an increase in AUME between 31(st) December 2014 and
31(st) March 2015 when expressed in US Dollars and a larger
increase when expressed in Sterling. The composition of AUME by
product was as follows:
AUME $ billion
------------------------------------------------------
31(st) March 31(st) December
2015 2014
--------------------- ------------- ----------------
Dynamic Hedging 9.2 9.7
Passive Hedging 41.2 40.0
Currency for Return
(Note 1) 4.8 2.8
--------------------- ------------- ----------------
Cash & Futures 0.2 0.2
--------------------- ------------- ----------------
Total 55.4 52.7
--------------------- ------------- ----------------
Note 1: This includes $0.4 billion of Emerging Market strategies
(31(st) December 2014: $0.3 billion).
2. AUME Movement
Net client AUME flows in the three months to 31(st) March 2015
by product were as follows:
Net client AUME flows - $ billion
--------------------------------------------------------
3 months to 3 months to
31(st) March 31(st) December
2015 2014
--------------------- -------------- -----------------
Dynamic Hedging (1.0) (0.6)
Passive Hedging 1.7 0.5
Currency for Return 1.9 0.3
--------------------- -------------- -----------------
Cash & Futures - (0.1)
--------------------- -------------- -----------------
Total 2.6 0.1
--------------------- -------------- -----------------
Record had 55 clients at 31(st) March 2015 (31(st) December
2014: 51 clients).
The factors other than client flows, which have had an aggregate
impact on AUME during the quarter of +$0.1 billion, were as
follows:
(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: +$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.
3. Investment performance
Our Dynamic Hedging programmes performed as expected for US
clients during the quarter. The US Dollar strengthened against
almost all of the 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, Canadian Dollar and Pound, as
hedge ratios, for these currencies, remained high over most of the
period.
For UK-based Dynamic Hedging clients the programmes also
performed as expected, generating positive returns as Sterling
strengthened against the weighted basket of currencies in the
programmes. Gains came mainly from hedging the Euro, where hedge
ratios were high. At the same time, the losses in the US Dollar,
which continued to strengthen against Sterling, were contained as
hedge ratios remained low during the quarter.
Investment performance in Record's Active Forward Rate Bias
(FRB) product was negative during the quarter ending 31(st) March
2015, and for an ungeared portfolio equated to a return of -4.22%
over the quarter (3 months to 31(st) December 2014: return of
+1.22%). This compares to a -1.35% return in the quarter for the
FTSE Currency FRB10 index (excess return in Sterling). This
variance was mainly the result of differences in allocations to the
Swiss Franc which appreciated sharply in January following the
Swiss National Bank's decision to abandon its cap on the value of
the Franc. The FTSE FRB10 Index Fund continued to track the index
closely, on a 1.8x-geared basis.
Record's Emerging Market product investment performance was
positive during the quarter ending 31(st) March 2015 and for an
un-geared portfolio equated to a quarterly return of +1.19% (3
months to 31(st) December 2014: return of -1.53%). This positive
performance was mainly attributable to gains from the Russian
Rouble, Chinese Renminbi and Indian Rupee. Annualised performance
since inception (30(th) November 2009) for an un-geared portfolio
was +1.70% p.a.
Investment performance in Record's live Multi-Strategy product
was negative during the quarter ending 31(st) March 2015 as gains
from the Emerging Market and Value strategy were overcome by
negative returns from the Active FRB and Momentum strategies. For
an un-geared portfolio, the return was -1.15% over the quarter
ending 31(st) March 2015 (3 months to 31(st) December 2014: return
of +1.00%). Annualised performance since inception (31(st) July
2012) for an un-geared portfolio is +1.83% p.a.
Two new Multi-Strategy mandates were established during the
quarter. These mandates are based on a standard version of the
Multi-Strategy product which uses a FTSE Currency FRB10 index
replicating strategy instead of the Active FRB product.
4. AVERAGE FEE RATES AND PERFORMANCE FEES
During the quarter to 31(st) March 2015, fee rates for all
products remained broadly unchanged from the previous quarter.
Performance fees of GBP0.5m were earned from a Dynamic Hedging
mandate, based on performance over the 12 month period ended 31(st)
March 2015.
5. CHIEF EXECUTIVE'S COMMENT
Chief Executive James Wood-Collins, commenting on business
development, said:
"During a busy quarter we have seen net inflows of $2.6 billion,
made up of the anticipated inflows into Currency for Return, net
outflows in Dynamic Hedging, and the majority of the anticipated
inflows into Passive Hedging. Currency for Return inflows include
our second segregated Multi-Strategy mandate and the launch of a
new pooled fund implementing the Multi-Strategy programme, which
together with other new business further advance the
diversification of business across clients and product types.
"It's also pleasing to have earned a performance fee of GBP0.5m
for the year to 31(st) March 2015 from one of our Dynamic Hedging
mandates - Record's first performance fee for five years.
"During the quarter, currency markets have seen continued
divergent monetary policy, contributing in broad terms to
appreciation of the US Dollar and depreciation of the Euro. Routine
day-to-day volatility has increased from previously-depressed
levels, and in addition unanticipated events, most obviously the
policy change announced by the Swiss National Bank on 15(th)
January 2015, have had significant market repercussions.
"The diversity of Record's client base by objectives and by
geography, the continued predominance of hedging revenues, and
diversification of strategies and currency pairs within strategies
in return-seeking programmes, have all served well to protect
Record from the effects of any single market event over the
quarter.
"Furthermore, these market factors continue to contribute to
growing interest in currency issues for clients, potential clients
and investment consultants, and to create the opportunity for a
more supportive environment for both hedging and return-seeking
strategies. Our diversified product suite means Record is well
placed to take advantage of opportunities as they arise.
"We continue to engage with potential clients across a broad
range of currency issues and geographies and are hopeful that
further progress can be made in the new financial year, although
procurement processes are still expected to be competitive and
lengthy with the outcome necessarily uncertain."
Record will announce its financial results for the year ended
31(st) March 2015 on 16(th) June 2015 and the first quarter trading
update on 17(th) July 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
Jack Holden
Jennifer Iveson
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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