FOURTH QUARTER TRADING UPDATE

RNS Number : 4242K

Record PLC

20 April 2010

 



RECORD PLC

FOURTH QUARTER TRADING UPDATE

Record plc ("Record" or the "Company"), the specialist currency investment manager, announces today that as at 31^st March 2010 the Group's assets under management equivalents ("AuME") totalled $34.0 billion (31^st December 2009: $35.7 billion). 

AuME expressed in Sterling as at 31^st March 2010 totalled £22.4 billion (31^st December 2009: £22.1 billion).

The Board anticipates that pre tax profits will be in line with market expectations for the financial year ended 31^st March 2010.

1      AuME composition

Although AuME expressed in US Dollars declined during the period between 31^st December 2009 and 31^st March 2010, Record saw a marginal increase to AuME when expressed in Sterling.  The composition of AuME at 31^st March 2010 was as follows:

AuME $ bn
	31st March 2010		31st December 2009
Absolute Return
Segregated	3.6		4.0
Pooled	4.0		5.3
Absolute Return Sub Total		7.6		9.3
Active Hedging		12.0		11.6
Passive Hedging		13.5		13.5
Cash & Futures		0.9		1.2
Total		34.0		35.7

2      AuME MOVEMENT

Net client AuME flows in the three months to 31^st March 2010 by product were as follows:

Net client AuME flows  - $ bn
	3 mths to 31st March 2010		3 mths to 31st December 2009
Absolute Return
Segregated	(0.3)		(0.3)
Pooled	(0.7)		(0.6)
Absolute Return Sub Total		(1.0)		(0.9)
Active Hedging		-		0.4
Passive Hedging		(0.1)		-
Cash & Futures		(0.2)		(0.1)
Total		(1.3)		(0.6)

Record had 93 clients at 31^st March 2010, compared to 102 at 31^st December 2009. 

The factors other than client flows which impacted AuME during the quarter, totalling -$0.4 billion, were:

(i) Exchange rate movements:                                                                         -$1.1bn

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:                                      +$1.0bn

    Substantially all the Passive and Active Hedging, and some of the Absolute Return mandates are linked to stock and other market levels. Consequently AuME is affected by movements in these markets which had a positive impact in the quarter;

(iii) Pooled fund investment performance:                                                    -$0.3bn 

Investment returns are compounded on a geared basis into the AuME of the pooled funds and so impact AuME.

Investment performance in Record's Absolute Return product was negative during the quarter ending 31st March 2010 and for an un-geared portfolio equated to a decrease of 1.18% over the quarter as a whole (year to 31st March 2010: decrease  of 0.73%). 

3          AVERAGE FEE RATES

During the quarter to 31^st March 2010, average management fee rates were maintained across all products.  

4          CHAIRMAN'S COMMENT

Chairman and CEO, Neil Record, commenting on trading, said "The active hedging business has continued to grow in importance and now represents 35% of our AuME, compared with 13% at 31^st March 2009.  This product, being systematic in nature, continues to perform in line with client expectations and in particular has generated significant value for our US clients over the quarter.  We continue to see interest in the active hedging product and anticipate seeing further client additions within the next twelve months.

For the absolute return product, investment performance in the quarter was negative, leading to negative performance for the financial year of our Alpha Composite of        -0.73%.  This compares to a negative return of -3.49% for the whole of the financial year ended 31^st March 2009.  Whilst the performance to 31^st March 2010 compares favourably to the FTSE Currency FRB 5 index that returned -4.78% (in Sterling) over the same period, there remains a risk that there may be further withdrawals over the coming months.  We remain confident in the long-term performance and committed to the long-term investment strategy for this product.

Our internally seeded Emerging Markets currency product (which is two times geared) has had a strong performance since inception on 5^th November 2009, returning 12.1% to 31^st March 2010."

Record will announce its financial results for the year ended 31^st March 2010 on 15^th June 2010.

For further information, please contact:

Record plc                                                                             Tel: [phone]

Neil Record

Paul Sheriff

Hogarth                                                                                   Tel: [phone]

Nick Denton

Julian Walker

Notes to Editors

Record plc

Record is a specialist currency investment manager and provider of currency hedging services for institutional clients. Founded in 1983, Record has established a market leading position as a currency asset manager. Specifically, the Group has a leading position in managing currency for Absolute Return for institutional clients.

The Group has three principal product lines:

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

-    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 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. 

 

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