Trading Statement

RNS Number : 4375U

Record PLC

15 October 2010

 



RECORD PLC

SECOND QUARTER TRADING UPDATE

Record plc ("Record" or the "Company"), the specialist currency manager, announces today that as at 30^th September 2010 the Group's assets under management equivalents ("AuME") totalled $30.8 billion (30^th June 2010: $29.5 billion). 

AuME expressed in Sterling as at 30^th September 2010 totalled £19.5 billion (30^th June 2010: £19.7 billion).

1      AuME composition

Record saw an increase in AuME when expressed in US Dollars and a marginal decrease in AuME when expressed in Sterling during the period between 30^th June 2010 and 30^th September 2010.  The composition of AuME at 30^th September 2010 was as follows:

AuME $ bn
	30th September 2010		30th June 2010
Currency for Return
Segregated	2.1		2.7
Pooled	1.9		2.5
Currency for Return Sub Total		4.0		5.2
Dynamic Hedging		11.5		10.6
Passive Hedging		14.8		13.1
Cash & Futures		0.5		0.6
Total		30.8		29.5

2      AuME MOVEMENT

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

Net client AuME flows  - $ bn
	3 mths to 30th September 2010		3 mths to 30th June 2010
Currency for Return
Segregated	(0.6)		(0.8)
Pooled	(0.7)		(0.9)
Currency for Return Sub Total		(1.3)		(1.7)
Dynamic Hedging		-		-
Passive Hedging		0.6		0.2
Cash & Futures		(0.2)		(0.2)
Total		(0.9)		(1.7)

Record had 57 clients at 30^th September 2010, compared to 76 at 30^th June 2010.

The factors other than client flows which impacted AuME during the quarter, totalling $2.2 billion, were:

(i)	Exchange rate movements:	$1.6bn
	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:	$0.6bn
	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:	$0.0bn
	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 September 2010 and for an un-geared portfolio equated to a negative return of -0.27% over the quarter (3 months to 30^th June 2010: decrease  of 2.22%).  This compares to a negative return in the quarter of -2.11% for the FTSE Currency FRB5 index (in Sterling). 

3          AVERAGE FEE RATES

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

4          CHAIRMAN'S COMMENT

Chairman Neil Record, commenting on trading, said "Our Dynamic Hedging product continues to perform as expected by allowing our clients to benefit from foreign currency strength as was the case over the last quarter from the US perspective, and protecting them from foreign currency weakness as was the case from the UK perspective.  In the short term, we are focussing our marketing and sales effort on promoting this product in the US and UK.  Whilst it is clearly disappointing not to have won any new mandates in the first six months, we continue to generate interest in Dynamic Hedging and are hopeful that there should be further client additions before the end of the current financial year.

For the Currency for Return product, investment performance in the first half was negative leading to an overall return of our Alpha Composite of -2.49%.  As a result of the continuing short term poor performance and the overall three year negative performance, we anticipate further redemptions in the Currency for Return product in the coming months.  We remain confident in the long-term performance and committed to the long-term investment strategy for this product.  During this challenging period we have continued to communicate the investment philosophy and long term track record with investment consultants and with our clients.   

We continue to market our internally seeded Emerging Markets product and our first index tracking product.  We are hopeful that we can generate a number of mandate wins in the second half of the year.

As announced on 10^th September, I have relinquished the combined role of Chairman and Chief Executive.  We appointed James Wood-Collins as Chief Executive and James commenced this role on 1^st October."

Record will announce its half year results on 16^th November 2010.

For further information, please contact:

Record plc                                                                             Tel: [phone]

Neil Record

James Wood-Collins

Paul Sheriff

MHP                                                                                         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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