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RNS Number : 5362E

Record PLC

19 October 2018

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 2018 totalled $61.8 billion (30(th) June 2018: $61.9 billion).

AUME expressed in sterling as at 30(th) September 2018 totalled GBP47.4 billion (30(th) June 2018: GBP46.9 billion).

   1.         AUME composition 

AUME expressed in US dollars decreased by 0.2% between 30(th) June 2018 and 30(th) September 2018 and increased by 1.1% when expressed in sterling. The composition of AUME by product was as follows:

 
                       AUME $ billion 
                        30(th) September   30(th) June 2018 
                              2018 
                       -----------------  ----------------- 
 Dynamic Hedging                     4.4                4.3 
 Passive Hedging                    51.7               52.0 
 Currency for Return                 2.4                2.3 
 Multi-Product                       3.0                3.0 
                       -----------------  ----------------- 
 Cash & Futures                      0.3                0.3 
                       -----------------  ----------------- 
 Total                              61.8               61.9 
                       -----------------  ----------------- 
 
   2.         AUME Movement 

Net client AUME flows in the three months to 30(th) September 2018 by product were as follows:

 
               Net client AUME flows - $ billion 
                        3 months to 30(th)   3 months to 30(th) 
                          September 2018          June 2018 
                       -------------------  ------------------- 
 Dynamic Hedging                         -                  0.4 
 Passive Hedging                     (0.6)                (0.4) 
 Currency for Return                     -                  0.6 
 Multi-Product                           -                    - 
                       -------------------  ------------------- 
 Cash & Futures                          -                    - 
                       -------------------  ------------------- 
 Total                               (0.6)                  0.6 
                       -------------------  ------------------- 
 

Record had 66 clients at 30(th) September 2018 (30(th) June 2018: 64 clients). Record has been notified of the termination of Passive Hedging mandates for two commercial relationships, totalling up to $2.5 billion in AUME at 30(th) September 2018 and representing up to seven clients, expected during the current quarter.

Other than client flows, the factors which have had an aggregate impact on AUME during the quarter of +$0.5 billion were as follows:

   (i)         Movements in global stock and other markets:                         +$0.1bn 

Substantially all the Passive and Dynamic Hedging, and some of the Multi-Product mandates, are linked to stock and other market levels. Consequently AUME may be affected by movements in these markets.

   (ii)        Exchange rate movements and mandate volatility targeting:  +$0.4bn 

Exchange rate movements during the period affect the conversion of non-US dollar mandate sizes into US dollar AUME. In addition certain Currency for Return mandates targeting a specific volatility target may be scaled up or down.

   3.         Investment performance 

For US Dynamic Hedging clients during the quarter, hedging returns in the programmes were positive as the US dollar generally strengthened against the weighted basket of hedged currencies.

Investment performance of the FTSE Currency FRB10 index (excess return in sterling) during the three months to 30(th) September 2018 was -0.40% (three months to 30(th) June 2018 was 1.18%). The FTSE FRB10 Index Fund continued to track the benchmark index closely, on a 1.8x geared basis.

Record's Emerging Market product investment performance was negative during the quarter and for an un-geared portfolio equated to a quarterly return of -1.24% (three months to 30(th) June 2018: return of -2.41%). Annualised performance since inception (30(th) November 2009) for an un-geared portfolio was +1.53% p.a.

Investment performance in the Multi-Strategy product that comprises the FTSE Currency FRB10, Emerging Market, Value and Momentum strategies was negative during the quarter. For an un-geared portfolio, the return was -0.74% over the quarter (three months to 30(th) June 2018: return of -1.09%). Annualised performance since inception (31(st) July 2012) for Record's longest-standing Multi-Strategy mandate on an un-geared portfolio basis is +0.89% p.a.

   4.         AVERAGE FEE RATES AND PERFORMANCE FEES 

During the quarter to 30(th) September 2018, fee rates for most products remained broadly unchanged from the previous quarter, taking into account the mix of management fee-only and management plus performance fee mandates. No performance fees were earned in the quarter.

   5.         CHIEF EXECUTIVE'S COMMENT 

Chief Executive James Wood-Collins, commenting on business development, said:

"We continue to invest in enhancing both our client service levels and product offerings.

"Our commitment to deliver a premium service, including best execution and full price transparency to clients, was strengthened during the period through the engagement of New Change FX, an independent provider of foreign exchange data.

"We extended our licensing relationship with WisdomTree Asset Management, Inc. during the quarter to provide currency signals in connection with a new range of models-based active exchange-traded funds. This includes the development of a new approach to emerging market currency hedging which provides an innovative way to manage this currency risk and which we are confident can be applied in a broad number of contexts.

"We are seeing an encouraging range of new business opportunities across products and geographies, although this has to be balanced against continued competition and fee pressure in passive hedging in particular. With our diversified product suite and our ability to offer tailored solutions to clients and potential clients, we aim to make further progress in the second half of the financial year."

Record will announce its half year results on 23(rd) November 2018 and its third quarter trading update on 18(th) January 2019.

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 four principal reporting 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;

- Currency for Return, in which Record enters into currency contracts for clients with the objective of generating positive returns; and

- Multi-Product, where the client mandate includes combined hedging and return-seeking objectives.

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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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October 19, 2018 02:00 ET (06:00 GMT)