Third Quarter Trading Update

RNS Number : 8362V

Record PLC

18 January 2013

 



18 JANUARY 2013

RECORD PLC

THIRD QUARTER TRADING UPDATE

Record plc ("Record" or the "Company"), the specialist currency manager, announces today that as at 31^st December 2012 the Group's assets under management equivalents ("AuME") totalled $34.0 billion (30^th September 2012: $32.5 billion).

AuME expressed in Sterling as at 31^st December 2012 totalled £20.9 billion (30^th September 2012: £20.1 billion).

1.         AuME composition

Record saw an overall increase in AuME when expressed in both US Dollars and Sterling during the period between 30^th September and 31^st December 2012.  The composition of AuME at 31^st December 2012 was as follows:

AuME $ bn
	31st December 2012	30th September 2012
Dynamic Hedging	10.3	9.9
Passive Hedging	22.1	21.0
Currency for Return (Note 1)	1.5	1.5
Cash & Futures	0.1	0.1
Total	34.0	32.5

Note 1: This includes $0.8 billion of Emerging Market strategies (30^th September 2012 $0.8 billion).

2.         AUME Movement

Net client AuME flows in the three months to 31^st December 2012 by product were as follows:

Net client AuME flows - $ bn
	3 months to 31st December 2012	3 months to 30th September 2012
Dynamic Hedging	0.1	-
Passive Hedging	0.5	1.1
Currency for Return	-	0.2
Cash & Futures	-	(0.1)
Total	0.6	1.2

Record had 45 clients at 31^st December 2012, compared with 43 at 30^th September 2012.

The factors other than client flows which have impacted AuME during the quarter, totalling $0.9 billion, were:

(i)         Movements in global stock and other markets:                          $0.4bn                 

            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;

(ii)       Exchange rate movements:                                                            $0.5bn     

           Exchange rate movements during the period affect the conversion of non-US Dollar mandate sizes into US Dollar AuME.

Our Dynamic Hedging programmes performed as expected for US clients during the quarter.  The US Dollar performed strongly during the quarter especially against the Japanese Yen and as a result the quarterly performance was positive.

For UK-based Dynamic Hedging clients the programmes also performed as expected.  Sterling strengthened during the quarter and the Dynamic Hedging programmes delivered overall outperformance with the most notable contribution from hedging the Japanese Yen exposure.

Investment performance in Record's established Active Forward Rate Bias (FRB) product was positive during the quarter ending 31^st December 2012 and for an ungeared portfolio equated to a positive return of 1.20% over the quarter (3 months to 30^th September 2012: positive return of 0.31%).  This compares to a positive return in the quarter of 1.02% for the FTSE Currency FRB10 index (excess return in Sterling).

Investment performance in Record's systematic Emerging Market product was positive during the quarter ending 31^st December 2012 and for an un-geared portfolio equated to a positive return of 3.57% over the quarter (3 months to 30^th September 2012: positive return of 1.20%).  This product reached the third anniversary of its live track record in November 2012.

3.         AVERAGE FEE RATES

During the quarter to 30^th December 2012, fee rates for all products remained broadly unchanged from the previous quarter. 

4.         CHIEF EXECUTIVE'S COMMENT

Chief Executive James Wood-Collins, commenting on trading, said "Overall AuME increased once again during the period mainly due to increases in existing mandates.

"As we have previously stated, we are participating in a number of formal procurement processes, particularly for Passive Hedging in Switzerland.  Whilst none of these were finalised in the quarter, we are hopeful that we will be successful in securing additional mandates before the end of the financial year.

"Similarly in North America we have continued to see encouraging engagement with prospective clients and investment consultants.  Whilst the timing of any formal procurement processes is uncertain we are hopeful that further progress can be made in 2013."

Record will announce its fourth quarter trading update on 19^th April 2013.

Ends

For further information, please contact:

Record plc                                                                             Tel: [phone]

James Wood-Collins

Paul Sheriff

MHP                                                                                        Tel: [phone]

Nick Denton

John Olsen

Vicky Watkins

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:

-    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;

-    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; and

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

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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