Record Share Discussion Threads

[ayiman] 29/6/2012 17:09

A lot of patience required here, not much sign of a recovery
Ayi

[flakyjake40] 29/6/2012 16:50

Directors all acquired around 38,000 shares each today at 17p. Still waiting, expecting an upturn soon to mid 20's whereby I will sell to recover costs. If it falls to around 12p may be tempted to buy more in an effort to cover losses as it trades in the 15p - 20p band.

[topvest] 12/6/2012 10:31

Yes, dividend cut at the next year interim says it all! Some promising signs, but still in decline at present. Watching and waiting. Certainly interested below 10p, if the tide starts turning.

[masurenguy] 12/6/2012 10:18

Still in decline - no current position!

FINAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2012

Financial highlights:

§ AuME¹ $30.9bn at 31 March 2012 (down 2%)

§ AuME £19.3bn at 31 March 2012 (down 2%)

§ Management fee income of £20.4m (down 27%)

§ Pre-tax profit of £6.7m (down 46%)

§ Financial position remains strong with net assets of £28.6m at 31 March 2012 (2011:£30.1m); net cash of £24.6m (2011: £24.7m)

§ Operating profit margin to 31 March 2012 of 32% compared to 44% for the year ended 31 March 2011

§ Basic EPS of 2.23p per share (2011: 4.03p)

§ Proposed final dividend for the year to 31 March 2012 is 0.75p per share giving a total dividend in respect of the period of 1.50p per share (2011: 4.59p).

¹As a currency manager Record manages only the impact of foreign exchange and not the underlying assets, therefore its "assets under management" are notional rather than real. To distinguish this from the AuM of conventional asset managers, Record uses the concept of Assets under Management Equivalents (AuME) and by convention this is quoted in US dollars

Key Points:

§ Passive hedging AuME grew by 20% in the year - including three new clients

§ Client numbers fell to 41 by 31 March 2012 (2011: 46)

§ Dynamic Hedging continued to perform in line with client expectations

§ Positive investment performance in the year from Active FRB¹ and FRB Index strategies

§ Expanded range of eight products including two hedging and six return seeking strategies, plus a currency multi-strategy capability.

¹FRB =Forward Rate Bias is the observed tendency of higher interest rate currencies' total return to outperform that of lower interest rate currencies.

Commenting on the results, Neil Record, Chairman of Record plc, said: "The economic backdrop has continued to be one of general risk aversion in financial markets. Against this backdrop it is not surprising that the business has continued to see hedging represent an increasing share of assets and income. Whilst overall AuME at the year end were broadly unchanged, the mix of business has seen Passive Hedging increase by 20% when compared to a decrease of 47% in Currency for Return. Our largest fee earning product, Dynamic Hedging, had a mixed year with the loss of a large US client partially offset by the addition of a UK fund. Overall AuME for this product declined by 17% during the period.
Management fee income fell to £20.4m and as a result the operating margin fell to 32%. The balance sheet had £24.6m cash and no debt at the year end.

Looking to the current year, we believe we are well positioned to achieve success in hedging, particularly for Passive Hedging in Switzerland. We are encouraged by the progress we have made in the US since we recruited a US sales executive and are hopeful that we will see further progress in the current financial year. Over the medium term we believe that the suite of Currency for Return products we have developed will be attractive to clients once they have established three-year track records. In the 2012/13 financial year our Emerging Market and Forward Rate Bias Index products should reach the three-year milestone."

[wexboy] 23/5/2012 15:17

Hi folks,

Read my latest writeup on (alternative) asset managers, including Record plc, here:



Cheers,

Wexboy

[knigel] 20/4/2012 20:49

Well deserved market correction started today .. could move to mid 20s over next month imo

[yeflux] 20/4/2012 14:27

Looks like it is finally picking up a bit.

[chrisdgb] 20/4/2012 12:46

From Financial News:

Record Currency Management, once one of the loudest advocates for active currency management to institutional investors in the UK, has closed down its main active fund following several years of underperformance.
The firm is pressing ahead with a successful refocus on passive currency hedging instead.

Record, founded in 1983 by former Bank of England economist Neil Record, now non-executive chairman, made the announcement in a first-quarter trading update this morning. It said the last remaining investor in the Record Currency Pooled Cash Plus fund, worth $400m, redeemed its money in April.

Its statement read: "This has led to the closure of the fund as the remaining fund size was unviable, with other investors either redeeming or switching into other pooled funds."

Record's active currency strategy, which attempted to make money out of foreign-exchange trades, was largely based upon the "carry trade", a once-reliable feature of the pre-crisis financial landscape whereby traders consistently borrowed in low-interest currencies – such as the Japanese yen – and bought high-interest currencies – such as the Australian dollar.

This strategy came unstuck, however, during the financial crisis, when the value of low-interest-rate currencies began to appreciate. This increased carry-traders' liabilities and outweighed the regular gains they made on the interest-rate coupons.

Record's active strategy turned from a consistent winner into a consistent loss-maker. James Wood-Collins, chief executive, told Financial News in 2010: "We recognise that the performance of our product has been disappointing. Having spent a great deal of time looking at it, we understand why ... we could not have [changed our strategy]. Our clients have invested with us on the understanding that we will follow our approach."

Over the three years to the end of September that year, the Record Currency Pooled Cash Plus fund had lost an average of 22.95% a year.

The carry trade has periodically failed before, notably between 1985 and 1987 and again from 1992 to 1995 following sterling's exit from the European Exchange-Rate Mechanism.

In the meantime, however, Record has refocused itself on passive currency hedging, that is, insulating institutional investors against foreign-exchange movements without necessarily profiting very much from doing so. This business is going well, it said this morning.

Assets covered by its passive hedging service leaped from $14.4bn to $18.9bn during the three months to March 31, it said, including a large mandate for a Swiss institution, which it did not name. Its related 'dynamic hedging' strategy, which tries to add a little profit from such hedging, went up from $9.1bn to $9.9bn.

Overall, the firm swung from net business losses of $4.3bn in the last quarter of 2011, to net new business gains of $3.6bn in the first three months of 2012.

But the firm also predicted pre-tax profits of £6.5bm for its full financial year, which ends on March 31. This is down by about 50% from £12.5m the previous year. Record will report its full results, including an official profits figure, on June 12.

Wood-Collins said in today's statement: "It is pleasing to see [assets] rise in the quarter and we believe that the business is well positioned to secure further hedging mandates in the coming financial year."

[chrisdgb] 20/4/2012 08:56

Let us hope so, that is a yield of over 11%........staggering value remains....I am awaiting the JP Morgan view...

[topvest] 20/4/2012 08:35

yes - i would have thought it will be maintained at the rate indicated. Next year is now the ?

[knigel] 20/4/2012 08:28

S/b a dividend this year??

[topvest] 20/4/2012 08:10

Yes, slightly more positive..but not sure whether it's a sustained increase or a blip on the way down. They still aren't winning new mandates.

[chrisdgb] 20/4/2012 08:06

Yes this is looking like a fantastic recovery situation....let us hope we get some fresh mandates as well..should be over 20p..

[t1tch] 20/4/2012 08:03

And clients up (by one....), I've been following REC for about 2 years, it's the first increase I remember.

[masurenguy] 20/4/2012 07:10

Record PLC
Trading Statement
RNS Number : 7126B
20 April 2012

FOURTH QUARTER TRADING UPDATE

Record plc, the specialist currency manager, announces today that as at 31st March 2012 the Group's assets under management equivalents ("AuME") totalled $30.9bn (31st December 2011: $25.4bn). AuME expressed in Sterling as at 31st March 2012 totalled £19.3bn (31st December 2011: £16.4bn). The Board anticipates that pre tax profits for the financial year ended 31st March 2012 will be approximately £6.5m.

In early April, the largest remaining investor in the Active Forward Rate Bias Pooled Currency for Return fund (Cash Plus) redeemed its investment. This has led to the closure of the fund as the remaining fund size was unviable, with other investors either redeeming or switching into other pooled funds. Record continues to offer pooled funds in Passive Forward Rate Bias, Emerging Market and Euro Stress strategies, as well as segregated Active Forward Rate Bias mandates that maintain this product's live track record.

Chief Executive James Wood-Collins, commenting on trading, said "It is pleasing to see AuME rise in the quarter and we believe that the business is well positioned to secure further hedging mandates in the coming financial year. "We continue to see heightened interest in Dynamic Hedging in both the UK, albeit in a more competitive environment, and in North America. Whilst it is disappointing not to have yet secured any further mandates, we remain committed to marketing and promoting this product in all these markets. In the US we are optimistic that in the coming financial year we will start to see the benefit of our investment in a local sales executive. We also continue to be confident about the appeal of our Passive Hedging product, in particular to Swiss clients."

[chrisdgb] 19/4/2012 09:14

I really hope we get some positive stuff tomorrow.......

[pictureframe] 18/4/2012 21:40

Chart is looking interesting - another spike at close

[pictureframe] 18/4/2012 13:03

Leaky Leaky me thinks

[chrisdgb] 18/4/2012 09:51

Lots of volume behind the scenes yesterday/day before, WINS printed nearly 4m shares..

[142minty] 17/4/2012 12:02

Trading update is on friday this week - should we read anything in the fact that they have chosen a friday for this ( i hope not)

[chrisdgb] 17/4/2012 10:08

Let us hope the company recognise the investor concerns of recent months and set out a clear statement.....positive would also be good..!!

[orinocor] 16/4/2012 14:11

On the watchlist. I was considering a purchase here until I read that one customer contributes 50% of the revenues. That's a red flag for me.

[chrisdgb] 13/4/2012 10:07

Trading update next week.....

[hugepants] 08/4/2012 18:55

I think revenues can drop by another 50% before REC will actually start losing money. For H1 admin expenses were £7.2M but that includes £1.6M Group Profit Share (GPS). If operating profit goes down to squat then I assume no GPS and admin costs are £5.6M per 6 months. Therefore say £11.2M revenues per annum for breakeven. REC had had that for the first 6 months alone.

Also noticed this from the interims:

"Under the GPS scheme rules, the intention is to purchase shares in the market following the announcement of interim and full year financial results."

Ive not noticed any shares being bought back previously.

[pictureframe] 29/3/2012 13:34

Who knows for sure but I reckon it will break up soon.