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LONDON (ShareCast) - (ShareCast News) - Record posted double-digit growth in full-year revenues and earnings, which led management to boost its full-year dividend payout alongside a special payment for the full-year. Company chairman Neil Record said: "This year, Record has reported its highest-ever assets under management equivalent, increased revenues and earnings, and further growth in revenue diversification, with revenues from Passive Hedging now covering all overheads excluding variable remuneration[.....] The Board has decided that conditions are now right for a change in our capital policy and is considering a return of approximately £10m of excess capital to shareholders, more details of which will be provided to the market shortly." The final dividend was set at 1.175p, for a full-year payout of 2.0p, up from 1.65p in 2016. On top of that, Record declared a special dividend of 0.91p. "For the current and future financial years, the Board intends to pursue a progressive dividend policy and to consider the return of excess earnings over ordinary dividends to shareholders, potentially in the form of special dividends."
Borgy.. Think yesterday it went ex div for Special and Final Div
Any vested person understand what may have caused a 5% drop. This was on the verge of a breakout but ended up being a false break out and nearly caught me out as i wanted to enter at 48p.
Gross profit margin at Record, must be a ..er... record, at 98.7%. Very good recent figures and every chance of a breakout above the 47p resistance first established in 2014.
Includes great dividend news: § AUME[1] $58.2bn at 31 March 2017 (up 10%) § AUME £46.6bn at 31 March 2017 (up 26%) § Revenue of £23.9m (up 13%) § Profit Before Tax (PBT) of £8.7m (up 26%) and underlying PBT of £7.9m (up 13%) § Operating profit margin of 36% (2016: 32%) and underlying margin of 34% (2016: 33%) § Robust financial position with net assets of £41.6m at 31 March 2017 (2016: £37.7m) § Basic EPS of 2.91p per share (2016: 2.55p) § Proposed final ordinary dividend for the year is 1.175p per share, giving a total ordinary dividend in respect of the year of 2.00p per share (2016: 1.65p) § Special dividend declared for the year of 0.91p per share (2016: nil) Neil says: "Since the financial crisis of 2008 and 2009, the Board's focus has been on building a robust business by continuing to develop its diverse suite of currency-related products and strategies, by investing in our people and infrastructure, and by building a strong and liquid balance sheet and regulatory capital buffer. "This year, Record has reported its highest-ever AUME, increased revenues and earnings, and further growth in revenue diversification, with revenues from Passive Hedging now covering all overheads excluding variable remuneration. Our balance sheet is strong, with consolidated net assets of £41.6m, underpinned by own cash[2] of £29.2 million, and comfortably in excess of our regulatory capital requirements. "The Board has decided that conditions are now right for a change in our capital policy and is considering a return of approximately £10 million of excess capital to shareholders, more details of which will be provided to the market shortly. "Furthermore, the Board is recommending an increase in the ordinary dividend for the year of 21%, whilst also confirming its previous intention of returning excess earnings over ordinary dividends for the financial year to shareholders, by declaring a special dividend equal to the excess of basic earnings over ordinary dividends, equivalent to 0.91 pence per share to be paid simultaneously with the final ordinary dividend. "The current environment of uncertainty and change is seemingly set to continue and will provide opportunities to engage with clients, to understand their objectives, and to develop tailored solutions. Record has the strategies, track records, operational systems and most importantly the people to do so."
Thank you Wexboy. I would like to say that I now understand what Record actually does. I get as far as the pairing of currencies, and deciding the various probability weightings, and give up. On the whole I think I will continue with my steady investment in the company because of the consistent results, and because Neil seems to know what he is doing. It just goes a bit against the grain to not really understand what one of my investments does!
New Investment Thesis A sub-10 P/E (ex-cash) for a business which boasts underlying long-term 30% pa revenue growth: Record plc (REC:LN) is the world’s largest independent currency manager. Based in Windsor, it was founded in 1983 by Neil Record, winning the world’s first stand-alone currency overlay mandate two years later. Record is still majority-owned by its directors/employees, with no proprietary business of its own – it focuses solely on being a ‘trusted advisor’ to an institutional client base (pension funds & foundations), providing (bespoke) passive & dynamic currency hedging and currency for return strategies, with AUME now at $58.2 billion (£46.6 billion). [Record only manages currency risk, so AUM is notional – i.e. it doesn’t manage underlying client assets – therefore, it uses the term Assets Under Management Equivalents]. This (old) video is still worth your time watching: But unfortunately, after listing at 160p a share (a £354 million market cap) in Nov-2007, its long-term chart is none too pretty... See the blog for full investment thesis/video/charts/data tables & analysis/links/etc: https://wexboy.wordpress.com/2017/04/28/love-that-record-give-it-a-spin/ Cheers, Wexboy
Assets under management equivalents - AUME totalled GBP46.6 billion, up 1.7% from GBP45.8 billion since March. Record said it had 59 clients as at the end of March, down from 64 at the end of December. It said that,for US Dynamic Hedging clients, hedging returns were negative as the US dollar weakened against the weighted basked of hedging currencies. Losses primarily came from hedging the Japanese yen and the euro. For UK based Dynamic Hedging clients, hedging returns were also negative, as whilst sterling strengthened overall against a basket of hedged currencies, it "followed a volatile path in doing so, which led to elevated costs associated with varying the hedge ratios". I do not know how good or bad this information is for Record.
Record PLC announces a record $58.2bn but mentioned there was a mandated termination of $1.2bn. Something to know about Record PLC; - 1. Management take home pay is equivalent 12% of total sales; 2. They also hold 50% of the company’s stock. 3. Cash balance accounts for 50% of total assets, that comes to £21m. 4. Business hasn’t grown due to financial regulation. 5. The share price was below 10 pence, now is 42 pence. 6.Despite managing more currency hedges for clients, revenue is only £20m. Compared that in 2011, it generates £28m in revenue, but manages $30bn. It is possible that lower interest rate and bond rates are causing this. The stock looks overvalued, as current valuation is close to six-year highs. Price to cash flow is at 18 times. And Earnings Yield of 5.8% means fundamentals have not caught up with market valuation. http://bit.ly/2ot2Mz1
In three months REC has risen from about 37p to about 47p, that is 27%. So much for my prediction of dips after highs... Can the company break 50p? Easy this share picking!
The share price is an all time high but the charts show a history of dips after such highs. We will see but I hope my plan of drip feed monthly investment will iron out the worst of the hills and valleys.
I don't know about takeover possibilities but after holding a small number of REC shares for a few years I have decided to add REC to my small group of regular monthly investments. Hopefully this drip feed effect will even out any strange price changes but at the expense of having to wait a few years before I see any real profit. I have held them long enough to feel comfortable with my investment. My main reason for increasing my holding is the absolute reliability of their performance
A value investors dream, would not be surprised if Berkshire Hathaway took Record out. Fits Buffett's rules for investing to a tee. Great increases in the divi too. Nice safe yielder with a proven track record.
Did anyone notice yield of 6% and the one liner in the final results stating extra profits above normal dividends will be returned to share holders in due course. No we got the results out the Directors are piling in. Also Record will have hedged the dollar and played on a non Brexit so got a feeling this is going to go really well if Brexit does not happen - Great solid little company this....... As a value investor this is golden
phew
By Graeme Davies, 24 November 2015 With uncertainty over monetary policy divergence continuing to reign over markets, demand for Record’s (REC) currency strategies remains high. This didn’t translate into profit growth in the company’s interim results, however, thanks to a decision to increase staff salaries in the period. We remain buyers.
for dividned - could be 2p final div here
Still static
- P/E of ~14 isn't cheap - EV/EBIT of 10 - 10.5 isn't particularly cheap - EPS growth of 25% is good and makes the P/E look better - Dividend of 4.5% is great - Balance sheet is superb so dividend is well covered - Investor's Chronicle ST picked this for 2014 at about 33p - The level of director buys is very encouraging! Summary: This looks a little cheap in my eyes but nothing to get excited about (even factoring in the high yield) BUT, considering ST is such a fan and considering all the director buys, I reckon REC may be worth investing in on the basis something good must be round the corner.
£55k + £10.5k + £2.3k + £2.3k= over £70k worth of director buying. And that's just today. 18th June - £13.85k bought 20th June - almost £26k + the same + the same again + £4.9k = £82.8k bought 23rd June - £70k bought Total over last 5 days: around £166,000 worth of director buys! That's huge. Something is definitely afoot. Perhaps stellar 2014 Q1 figures (out in 3 weeks) or perhaps it's a major contract etc. Either way I'm getting excited by this!
Directors are buying chunks, so something must be afoot
the SP is now greater than the 12 month forecast, so most deaf due a rerating at this price, but which way will the SP go.
Interesting read.
Simon Thompson recommends ...stock up 20 %.... but no posters here since last July !
Nice rise, are their cracks in that glass ceiling? Next stop 50p please.