Record Share Discussion Threads

[boadicea] 05/7/2017 19:00

[Erroneous comment deleted].

[greasynut] 24/6/2017 08:21

I was hoping that Maynard Patton would do a write-up:

hxxp://maynardpaton.com/2017/06/23/record-2017-results-herald-welcome-larger-dividends-and-10m-tender-offer-to-help-company-founders-retirement-planning/


It is well worth reading Maynards blog. You have to follow him on Twitter.
(Maynard - Can't you add an email subscription function?)

[cestnous] 23/6/2017 15:39

From Shares Magazine yesterday;

Make hay from currency
fluctuations with Record
Would you like to own
shares in a company
that is sitting on piles
of cash, is prepared to return it
you at regular intervals and has
also been growing at a fair lick?
We give you Windsor-based
Record (REC). The company
helps large institutional investors
such as pension funds reduce
the risk of losing money due
to changes in the values
of currencies.
The largest part
of the business,
passive hedging,
seeks to eliminate
the impact of
currency movements
when a firm’s revenue is
dominated in foreign currencies.
MODEL GAINING CURRENCY
Record’s multi-product strategy
combines currency hedging with
forex trades in an attempt to
generate returns for the client.
It also offers dynamic hedging,
or active currency management,
where the firm decides if a
currency movement is going
to result in a loss for its client
or not.
The company’s chief executive
James Wood-Collins says ‘the
business thrives on turbulence,
uncertainty and political change
which all impact the currency
markets’.
But you don’t need to know
the intricacies of how currency
BROKER SAYS:
markets work to realise that
Record is good investment; it’s
clear in the numbers.
Record’s results for year
ending March 31 2017 show
a business on the up and up.
Its assets under management
equivalent hit a record high
£46.6bn. ‘Equivalent217; because
unlike other asset managers,
it doesn’t hold any physical
securities for its clients like
stocks and bonds.
RECORD IS A CASH COW
It’s a problem we’d all like to
have, what do I do with all my
excess money? There’s no point
leaving it in a bank with very
low interest rates so Record has
various options, all potentially
good ones for investors.
The company is sitting on cash
of £29.2m of which all it needs to
satisfy regulatory requirements is
around £9m.
Record is paying out a £2m
special dividend for its last
financial year, or 0.9p a share.
The 2p ordinary share is up 20%
from 2016 and the company says
this is not a one off.
It is aiming to return to
shareholders any excess of
earnings over the sum of
ordinary dividends in the form of
special dividends.
So you have an income which
could reach a yield near to 6%
if Cenkos analyst Rae Maile is
correct in his projections and
a company with a not too racy
12.9 times forecast earnings
ratio for the year ending March

[p49b] 23/6/2017 09:33

Thank you for replies, my holding is to small at the moment to consider taking part,
in fact i was looking to add, if as you say there are less shares then that should
in the end result in a higher share price
Thanks again.

[dlm2602] 23/6/2017 09:17

I think the tender is an excellent idea. The only criticism is that it should have been done earlier. If you tender the exact amount allocated to you (c 10%) you will end up with 10% less shares but the same percentage of the company as you held before. The shares purchased by the company will be cancelled. If profits remain the same as last year the impact of cancelling these shares by the company means that the EPS will increase by 10%. Cash held generally has little effect on the valuation. So I believe that this scheme will likely lead to a rise in the share price all things being equal. If you can sell your (10%) shares in the market at a higher price than the tender offer then that is a better choice. Neil has offered to sell additional shares at the tender price if there are a lack of shares offered for tender. Given the poor liquidity in the shares, the tender is a rare opportunity to sell a large number without hitting the share price. I suspect the MM's will keep the price in check so that there is not much difference between the price XD and the tender offer.
As an aside, REC looks at long last to have turned the corner. Its business should do well in these volatile markets and if it pays out all its Earnings in dividends we will be getting a dividend around 7% and still the prospect for further share repurchases.

[greasynut] 22/6/2017 16:47

Well, I was anticipating a special dividend. I would guess that is not tax efficient for the big holders, so they have opted for a tender offer instead.

Other tender offers I have seen have been at a premium to the current share price to 'reward' shareholders & encourage then to tender. In that case the leavers benefit at the expanse of the remainers, but if every body gets the same offer, that's ok.

We might get a better idea of their motivations when we see what the big holders are doing (Presumably they will reveal their intentions in the full documentation).

2 possibilities I can think of:

1. They want to reduce their participation & sell shares for cash. They couldn't manage this in the market.

2. They want to increase their participation as others sell shares for cash. Vote of confidence in the business.

I've been holding shares here for years. I would have been glad to get a special dividend, but I'm not tendering at these levels.
As the share price is now above the tender price it would be pointless anyway.
So I guess the big holders will be tendering otherwise the whole thing is pointless.
Looks like the only benefit here for small holders will be a slightly higher EPS going forward. woo-hoo.

[p49b] 22/6/2017 14:17

Have a small holding here and am not sure what to do re the share repurchase.
Is it different to a share buyback? why do investors want to sell there shares back
when they are being offered less than the market price? can any holder shed some light
on the boards reasoning and the purpose of the proposal.
Many Thanks

[robsy2] 16/6/2017 12:10

Indeed, a partial teturn to former glories.
Best
R2

[welsheagle] 16/6/2017 11:47

Special dividend aswell

[robsy2] 16/6/2017 09:33

That was a satisfying read.Progress on all fronts and at 50p ish we have a 6% yield based on the new capital policy.
Excellent.
R2

[its the oxman] 15/5/2017 16:22

Can anyone who has a better understanding say whether it makes sense for AFX to buy record or merge possibly since both businesses are based in Windsor I believe. Presumably there would be synergies and not much loss of personnel.

[shaunstar] 02/5/2017 22:13

About time someone posted wexboys Record write up....

[walbrock82] 24/4/2017 13:00

WJCCGHCC,

On cash flow, I used the net cash flow numbers after working capital and taxes, which comes to £5.5m.

[topvest] 21/4/2017 10:50

Trading update was fine. As has been for a few years, progress on new mandates is lumpy and there is always the risk of the odd loss as announced today and in the quarter. They do still have record AUM. Currency for return and dynamic hedging are the higher margin areas. If these took off then revenue growth would be very strong. With inflation taking off, one gets the feeling that forex markets could get more interesting. I'm happy to hold. Its a quality business.

As to the share price - 25p was a bargain. 50p and the price had probably got ahead of itself. Looks about right now.

[wjccghcc] 21/4/2017 10:17

Not sure where you get the price to cashflow? Last year's cashflow 7.5mm, Mkt cap 90mm, net cash 36mm. Gives an enterprise value to cashflow multiple of 7.

[walbrock82] 21/4/2017 10:02

Record PLC announces a record $58.2bn but mentioned there was a mandated termination of $1.2bn.
Something to know about Record PLC; -
1. Management take home pay is equivalent 12% of total sales;
2. They also hold 50% of the company’s stock.
3. Cash balance accounts for 50% of total assets, that comes to £21m.
4. Business hasn’t grown due to financial regulation.
5. The share price was below 10 pence, now is 42 pence.
6.Despite managing more currency hedges for clients, revenue is only £20m. Compared that in 2011, it generates £28m in revenue, but manages $30bn.
It is possible that lower interest rate and bond rates are causing this.

The stock looks overvalued, as current valuation is close to six-year highs. Price to cash flow is at 18 times. And Earnings Yield of 5.8% means fundamentals have not caught up with market valuation.

[robsy2] 10/3/2017 18:08

trending well , 2 year high, lots of volume.
R2

[muji1983] 20/1/2017 23:48

To be margin is still good and everything seems on track. Dont see too much affect here.

[topvest] 20/1/2017 20:13

Update was OK in my view. True there were some losses, but net flows exceeded that. The 6 clients were connected, so only really 1 mandate.

Profitability must be very strong given the US$ income effect.

As I have said before, its only a matter of time before Currency for Return products become attractive again. This will rocket when that happens.

[trident5] 20/1/2017 18:24

"With forex fluctuations over the past year being quite dramatic, REC's service should be thriving"

Crazycoops - it's worth remembering that UK clients with passive hedges will have lost heavily on their hedges since Brexit, and might have preferred the currency volatility.

[boonkoh] 20/1/2017 11:01

They never seem to be deliver over performance for their clients. Every trading update states that performance fees have been zero.

[crazycoops] 20/1/2017 10:30

This bit was a red flag for me:

"Record had 64 clients at 31(st) December 2016 (30(th) September 2016: 61 clients). Since the end of the quarter, notice has been served to terminate mandates in respect of six associated Passive Hedging clients representing $0.7 billion AUME with effect from 30(th) January 2017, and also in respect of one Dynamic Hedging client representing $0.3 billion AUME, with timing to be determined."

With forex fluctuations over the past year being quite dramatic, REC's service should be thriving whereas they seem to be losing more clients than they are winning. Alas, I sold my small entry position first thing - good luck to those who continue to hold.

[trident5] 20/1/2017 08:18

They've never struck me as being a dynamic bunch, this from the update sums it up:

"Such volatility and uncertainty in markets continues to provide opportunities for Record to discuss both its return-seeking and risk-reducing products with current and potential clients".

How about "sell" instead of "discuss".

[robsy2] 20/1/2017 07:15

All seems to be running smoothly.
R2

[mrthomas] 29/11/2016 18:14

It was a few months ago and my brother uses the card which is good