Interim Management Statement

RNS Number : 4386P

Record PLC

16 July 2010

 



RECORD PLC

FIRST QUARTER TRADING UPDATE

Record plc ("Record" or the "Company"), the specialist currency manager, announces today that as at 30^th June 2010 the Group's assets under management equivalents ("AuME") totalled $29.5 billion (31^st March 2010: $34.0 billion). 

AuME expressed in Sterling as at 30^th June 2010 totalled £19.7 billion (31^st March 2010: £22.4 billion).

1      AuME composition

Record saw a decline in AuME during the period between 31^st March 2010 and 30^th June 2010.  The composition of AuME at 30^th June 2010 was as follows:

AuME $ bn
	30th June 2010		31st March 2010
Currency for Return
Segregated	2.7		3.6
Pooled	2.5		4.0
Currency for Return Sub Total		5.2		7.6
Dynamic Hedging		10.6		12.0
Passive Hedging		13.1		13.5
Cash & Futures		0.6		0.9
Total		29.5		34.0

2      AuME MOVEMENT

Net client AuME flows in the three months to 30^th June 2010 by product were as follows:

Net client AuME flows  - $ bn
	3 mths to 30th June 2010		3 mths to 31st March 2010
Currency for Return
Segregated	(0.8)		(0.3)
Pooled	(0.9)		(0.7)
Currency for Return Sub Total		(1.7)		(1.0)
Dynamic Hedging		-		-
Passive Hedging		0.2		(0.1)
Cash & Futures		(0.2)		(0.2)
Total		(1.7)		(1.3)

Record had 76 clients at 30^th June 2010, compared to 93 at 31^st March 2010. 

The factors other than client flows which impacted AuME during the quarter, totalling -$2.8 billion, were:

(i)	Exchange rate movements:	-$0.6bn
	Exchange rate movements during the period affect the conversion of non-US Dollar mandate sizes into US Dollar AuME;
(ii)	Movements in global stock and other markets:	-$1.7bn
	Substantially all the Passive and Dynamic Hedging, and some of the Currency for Return mandates are linked to stock and other market levels. Consequently AuME is affected by movements in these markets;
(iii)	Pooled fund investment performance:	-$0.5bn
	Investment returns are compounded on a geared basis into the AuME of the pooled funds and so impact AuME.

Investment performance in Record's established Currency for Return product was negative during the quarter ending 30^th June 2010 and for an un-geared portfolio equated to a negative return of -2.22% over the quarter (year to 31^st March 2010: decrease  of 0.73%).  This compares to a negative return in the quarter of -1.35% for the FTSE Currency FRB 5 index (in Sterling).  The divergence of the un-geared portfolio and the index is principally due to the weak performance of the Australian Dollar and New Zealand Dollar in the quarter.  These two currencies are included in the un-geared portfolio currency universe but are not included in the five currencies that comprise the index.

3          AVERAGE FEE RATES

During the quarter to 30^th June 2010, average management fee rates were maintained across all products.  

4          CHAIRMAN'S COMMENT

Chairman and CEO, Neil Record, commenting on trading, said "Our Dynamic Hedging product continues to perform as expected and has continued to generate value for our US clients over the quarter.  In the short term, we are focussing our marketing and sales effort on promoting this product in the US and UK.  We are continuing to generate interest in the Dynamic Hedging product and believe that there should be further client additions in the current financial year.

For the Currency for Return product, investment performance in the quarter was negative, particularly in May, leading to an overall return of our Alpha Composite of   -2.22%.  As a result of the cumulative performance over the last three years, combined with the performance in May, we are as previously stated experiencing a high level of redemptions in the Currency for Return product.  In the short term we anticipate that this will continue.  We remain confident in the long-term performance and committed to the long-term investment strategy for this product.

We have commenced marketing our internally seeded Emerging Markets product and our first index tracking product."

Record will announce its second quarter trading update for the quarter ending 30^th September 2010 on 15^th October 2010.

For further information, please contact:

Record plc                                                                             Tel: [phone]

Neil Record

Paul Sheriff

Hogarth                                                                                   Tel: [phone]

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, formerly known as Absolute Return, in which Record enters into currency contracts for clients with the objective of generating positive returns;

-    Dynamic Hedging, formerly known as Active 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 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. 

 

END

 

 

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