TIDMREC
RNS Number : 9810V
Record PLC
22 April 2016
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 2016 totalled $53.7 billion
(31(st) December 2015: $53.5 billion).
AUME expressed in sterling as at 31(st) March 2016 totalled
GBP37.4 billion (31(st) December 2015: GBP36.3 billion).
1. AUME composition
AUME expressed in US dollars increased by 0.4% between 31(st)
December 2015 and 31(st) March 2016 and increased by 3% when
expressed in sterling. The composition of AUME by product was as
follows:
AUME $ billion
------------------------------------------------------
31(st) March 31(st) December
2016 2015
--------------------- ------------- ----------------
Dynamic Hedging 7.9 8.2
Passive Hedging 43.8 42.3
Currency for Return 1.8 2.8
--------------------- ------------- ----------------
Cash & Futures 0.2 0.2
--------------------- ------------- ----------------
Total 53.7 53.5
--------------------- ------------- ----------------
2. AUME Movement
Net client AUME flows in the three months to 31(st) March 2016
by product were as follows:
Net client AUME flows - $ billion
--------------------------------------------------------
3 months to 3 months to
31(st) March 31(st) December
2016 2015
--------------------- -------------- -----------------
Dynamic Hedging (0.4) (0.7)
Passive Hedging (0.1) 0.1
Currency for Return (1.0) 0.4
--------------------- -------------- -----------------
Cash & Futures - -
--------------------- -------------- -----------------
Total (1.5) (0.2)
--------------------- -------------- -----------------
Record had 58 clients at 31(st) March 2016 (31(st) December
2015: 58 clients).
Other than client flows, the factors which have had an aggregate
impact on AUME during the quarter of +$1.7 billion, were as
follows:
(i) Exchange rate movements: +$1.4bn 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 may be affected by movements in these markets.
3. Investment performance
For US clients during the quarter, our Dynamic Hedging
programmes controlled hedging losses in response to US dollar
weakness against the basket of foreign currencies. The largest
losses came from hedging the euro and Japanese yen, but losses were
limited as hedge ratios fell throughout the period. Pound sterling
was the only currency to depreciate against the US dollar through
the period, generating some partially offsetting positive
returns.
For UK-based Dynamic Hedging clients the programmes controlled
hedging losses in response to sterling weakness against the
weighted basket of currencies in the programmes. Negative returns
were primarily driven by hedging the euro; however, losses were
limited as the hedge ratio fell close to zero over the quarter.
Investment performance in Record's Active Forward Rate Bias
(FRB) product was negative during the three months to 31(st) March
2016, and for an ungeared portfolio equated to a return of -1.40%
(three months to 31(st) December 2015: return of 0.39%). This
compares to a 0.54% return in the quarter for the FTSE Currency
FRB10 index (excess return in sterling). This variance was mainly
the result of differences in the allocations of these two
strategies to some of the weaker performing currencies in the
quarter (largely US dollar and pound sterling). 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 and for an un-geared portfolio equated
to a quarterly return of 3.46% (three months to 31(st) December
2015: return of 1.32%). This performance was mainly attributable to
gains from the Brazilian real, Indonesian rupiah and Malaysian
ringgit. Annualised performance since inception (30(th) November
2009) for an un-geared portfolio was +0.99% p.a.
Investment performance in the Multi-Strategy product that uses
the Active FRB strategy was positive during the quarter as gains
from the Momentum and Emerging Market components offset negative
returns from the Active FRB and Value strategies. For an un-geared
portfolio, the return was 0.53% over the quarter (three months to
31(st) December 2015: return of 0.26%). Annualised performance
since inception (31(st) July 2012) for an un-geared portfolio is
+1.08% p.a.
A version of the Multi-Strategy product, which uses the FTSE
Currency FRB10 index strategy instead of the Active FRB product,
produced positive returns of 1.04% for an ungeared portfolio during
the three months to 31(st) March 2016 (three months to 31(st)
December 2015: return of 0.46%).
4. AVERAGE FEE RATES AND PERFORMANCE FEES
During the quarter to 31(st) March 2016, fee rates for all
products remained broadly unchanged from the previous quarter.
Performance fees of GBP0.3m were earned from a Dynamic Hedging
mandate, based on performance over the 12 month period ended 31(st)
March 2016.
5. CHIEF EXECUTIVE'S COMMENT
Chief Executive James Wood-Collins, commenting on business
development, said:
"Expectations of divergence in monetary policy, and in
particular of further US interest rate rises, weakened during the
quarter. In addition the effectiveness of monetary policy measures
such as quantitative easing in Japan and the Eurozone on exchange
rates has become less evident. This environment has led to less
clear-cut trends, and consequently we are seeing a wide divergence
of views amongst investors as to their preferences in managing
currency risk and opportunity.
"The referendum on 23(rd) June as to whether the UK should
remain in or leave the EU was announced during the quarter, and has
contributed to the uncertainty attached to the outlook for
sterling. In this respect, our focus will be to anticipate periods
of market turbulence and elevated volatility and to manage the
impact of these on our clients.
"We believe our range of currency management strategies is
well-placed to engage with the diverse interests and objectives of
investors, and we are confident that further progress can be made
in the current financial year."
Record will announce its financial results for the year ended
31(st) March 2016 on 17(th) June 2016 and the first quarter trading
update on 22(nd) July 2016.
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
Ollie Hoare
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 Currency
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.
(MORE TO FOLLOW) Dow Jones Newswires
April 22, 2016 02:00 ET (06:00 GMT)
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
TSTDMGZDKMLGVZM
(END) Dow Jones Newswires
April 22, 2016 02:00 ET (06:00 GMT)
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