Record Regulatory News (REC)

21 Jul 2009 07:00



21 JULY 2009

RECORD PLC

FIRST QUARTER TRADING UPDATE

Record plc ("Record" or the "Company"), the specialist currency investment manager, announces today that as at 30th June 2009 the Group's assets under management equivalents ("AuME") totalled $36.0 billion (31st March 2009: $31.5 billion). In addition, as referred to in the Final Results of 16th June 2009 and not included in the above figures, contract discussions are expected to conclude positively in the near future for the second significant US active hedging mandate.

AuME expressed in Sterling as at 30th June 2009 totalled £21.9 billion (31st March 2009: £22.0 billion). 

1. AuME composition

Record saw an increase in AuME and a decline in client numbers during the period between 31st March 2009 and 30th June 2009. The composition of AuME at 30th June 2009 was as follows:

2. AuME MOVEMENT 

Net client AuME flows in the three months to 30th June 2009 by product were as follows:

Record had 119 clients at 30th June 2009, compared to 121 at 31st March 2009.

The factors other than client flows which impacted AuME during the quarter, totalling +$3.6 billion, were: 

Investment performance in Record's Absolute Return product was strongly positive during the quarter ending 30th June 2009 and for an un-geared portfolio equated to 229 bps over the quarter as a whole (quarter to 31st March 2009: decline of 44 bps).

3. AVERAGE FEE RATES 

During the quarter to 30th June 2009, average management fee rates changed broadly in line with previous announcements. Average management fee rates firmed for both active and passive hedging products. Average management fee rates for segregated absolute return mandates fell as a result of the client loss announced on 13 May 2009 leading to a reduction in AuME of $1.8bn and a loss of annualised income of approximately £5.1m. Average management fee rates for pooled absolute return mandates fell following the change to management only fee clients announced in the fourth quarter trading update of 21st April 2009. 

Chairman and CEO, Neil Record, commenting on trading, said 'We are pleased to report strong investment performance in the quarter with our Alpha Composite return being 2.29% positive, compared to a negative return of 3.49% for the whole of the financial year ended 31 March 2009. For our Cash Plus fund, being seven times geared, this equated to a positive return of 17.8% during the quarter.

The co-operation agreement with FTSE Group, as announced on 23rd June 2009, to launch a range of currency indices in association with Record is expected to lead to more widespread recognition that the currency forward rate bias is an asset class, and we are well positioned to be a major beneficiary.

We continue to see interest in active hedging both in the US and UK.' 

Record will announce its second quarter trading update for the quarter ending 30th September 2009 on 20th October 2009.

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 3rd 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.