Business Update
RECORD PLC
BUSINESS UPDATE
Record plc ("Record" or the "Company"), the specialist currency manager, announces today that it has agreed, subject to formal documentation, to amend the terms of its investment management agreement with its largest client, a $6.1 billion AuME US-based dynamic hedging client. As a result of this change, a tiered management fee structure will be introduced shortly that will result in a reduction in management fees going forward of approximately £3.2 million on an annualised basis for this client. The on-going impact on pre-tax profits is estimated to be £2.2 million.
Additionally, the mandate's size is anticipated to be increased so as to cover a greater range of currencies and asset classes. The net effect of both these changes is expected to be a reduction in revenues earned in connection with this mandate of approximately £2.9 million on an annualised basis. The total on-going impact on pre tax profits is estimated to be £2.0 million.
There are no contractual obligations to extend a similar fee structure to any other client.
Record will announce its fourth quarter trading update on 15 April 2011.
For further information, please contact:
Record plc Tel: +44 (0) 1753 852 222
James Wood-Collins
Paul Sheriff
Hogarth Tel: +44 (0) 20 7357 9477
Nick Denton
John Olsen
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 Dynamic Hedging and Currency for Return for institutional clients.
The Group has three principal product lines:
- Currency for Return, in which Record enters into currency contracts for clients with the objective of generating positive returns;
- 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; and
- 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.
Record (LSE: REC) was admitted to trading on the London Stock Exchange on 3rd 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