Record PLC Fourth Quarter Trading Update (4116W)

TIDMREC

RNS Number : 4116W

Record PLC

17 April 2019

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 2019 totalled $57.3 billion (31(st) December 2018: $57.8 billion).

AUME expressed in sterling as at 31(st) March 2019 totalled GBP44.0 billion (31(st) December 2018: GBP45.4 billion).

   1.         AUME composition 

AUME expressed in US dollars decreased by 0.9% between 31(st) December 2018 and 31(st) March 2019 and decreased by 3.1% when expressed in sterling. The composition of AUME by product was as follows:

 
                       AUME $ billion 
                        31(st) March 2019   31(st) December 
                                                  2018 
                       ------------------  ---------------- 
 Dynamic Hedging                      3.1               3.9 
 Passive Hedging                     48.2              48.4 
 Currency for Return                  2.7               2.4 
 Multi-Product                        3.0               2.9 
                       ------------------  ---------------- 
 Cash & Futures                       0.3               0.2 
                       ------------------  ---------------- 
 Total                               57.3              57.8 
                       ------------------  ---------------- 
 
   2.         AUME Movement 

Net client AUME flows in the three months to 31(st) March 2019 by product were as follows:

 
               Net client AUME flows - $ billion 
                        3 months to 31(st)   3 months to 31(st) 
                            March 2019          December 2018 
                       -------------------  ------------------- 
 Dynamic Hedging                     (1.1)                    - 
 Passive Hedging                     (2.3)                (1.3) 
 Currency for Return                     -                  0.3 
 Multi-Product                           -                    - 
                       -------------------  ------------------- 
 Cash & Futures                          -                (0.1) 
                       -------------------  ------------------- 
 Total                               (3.4)                (1.1) 
                       -------------------  ------------------- 
 

Record had 65 clients at 31(st) March 2019 (31(st) December 2018: 65 clients). The above net outflows include the remainder of the Passive Hedging mandates previously notified as expected to terminate, and the tactical changes recently undertaken to a client's Dynamic Hedging portfolio in order to realise gains.

Other than client flows, the factors which have had an aggregate impact on AUME during the quarter of +$2.9 billion were as follows:

   (i)         Movements in global stock and other markets:                         +$3.0bn 

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:   -$0.1bn 

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 varied as the US dollar showed mixed performance against the respective weighted baskets of hedged currencies.

Investment performance of the FTSE Currency FRB10 index (excess return in sterling) during the three months to 29(th) March 2019 was +1.67% (three months to 31(st) December 2018 was -0.34%). 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 positive during the quarter and for an un-geared portfolio equated to a quarterly return of +0.98% (three months to 31(st) December 2018: return of +2.42%). Annualised performance since inception (30(th) November 2009) for an un-geared portfolio was +1.82% p.a.

Investment performance in the Multi-Strategy product that comprises the FTSE Currency FRB10, Emerging Market, Value and Momentum strategies was positive during the quarter. For an un-geared portfolio, the return was +0.41% over the quarter (three months to 31(st) December 2018: return of +0.77%). Annualised performance since inception (31(st) July 2012) for Record's longest-standing Multi-Strategy mandate on an un-geared portfolio basis is +1.02% p.a.

   4.         AVERAGE FEE RATES AND PERFORMANCE FEES 

During the quarter to 31(st) March 2019, fee rates for most products remained broadly unchanged from the previous quarter. No material performance fees were earned in the quarter.

   5.         CHIEF EXECUTIVE'S COMMENT 

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

"Our ability to add value to client portfolios continues to be demonstrated in different ways, such as the gains generated on a Dynamic Hedging mandate which were realised for the client.

"We continue to engage with existing and potential clients and to enhance our client and service offering. With our diversified product suite and our ability to offer tailored solutions, we aim to make further progress in the current financial year."

Record will announce its financial results for the year ended 31(st) March 2019 on 13(th) June 2019 and its first quarter trading update on 19(th) July 2019.

For further information, please contact:

Record plc Tel: [phone]

James Wood-Collins, Chief Executive Officer

Steve Cullen, Chief Finance Officer

MHP Tel: [phone]

Andrew Fleming [e-mail]

Ollie Hoare

Robert Collett-Creedy

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 [e-mail] or visit www.rns.com.

END

TSTUNVBRKWASAAR

(END) Dow Jones Newswires

April 17, 2019 02:00 ET (06:00 GMT)