Record Regulatory News (REC)

20 Oct 2009 07:00



20 October 2009

RECORD PLC

SECOND QUARTER TRADING UPDATE

Record plc ("Record" or the "Company"), the specialist currency investment manager, announces today that as at 30th September 2009 the Group's assets under management equivalents ("AuME") totalled $36.0 billion (30th June 2009: $36.0 billion). The AuME figure includes $7.6 billion from the two recent US active hedging mandates, which are expected to grow to approximately $7.9 billion over the next 3 months.

AuME expressed in Sterling as at 30th September 2009 totalled £22.5 billion (30th June 2009: £21.9 billion). 

1 AuME composition

Record saw no overall movement to AuME during the period between 30th June 2009 and 30th September 2009. The composition of AuME at 30th September 2009 was as follows:

The above active hedging figure includes the addition in the quarter from the US active hedging mandates together with the termination of one European active hedging mandate.

2 AuME MOVEMENT 

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

Record had 118 clients at 30th September 2009, compared to 119 at 30th June 2009.

The factors other than client flows which impacted AuME during the quarter, totalling +$2.0 billion, were: 

(i) Exchange rate movements: +$0.3bn

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: +$2.1bn

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:  -$0.4bn 

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 30th September 2009 and for an un-geared portfolio equated to a decrease of 137 bps over the quarter as a whole (quarter to 30th June 2009: increase of 229 bps).

3 AVERAGE FEE RATES 

During the quarter to 30th September 2009, average management fee rates were maintained across all products.  

Chairman and CEO, Neil Record, commenting on trading, said "We are pleased to have commenced the implementation of the two large US active hedging mandates that should be completed towards the end of the financial year. As a result, the active return business is now slightly larger than the absolute return business. 

Although investment performance in the quarter was slightly negative, investment performance of our Alpha Composite was 0.89% for the first half of the financial year. This compares to a negative return of 3.49% for the whole of the financial year ended 31st March 2009. For our Cash Plus fund, being seven times geared, this equated to a positive return of 5.42% for the first half.

The co-operation agreement with FTSE which we announced on 23rd June 2009 led to the announcement of the launch of the FTSE Currency Forward Rate Bias Index Series 'FRB5' from 21st September 2009. The FRB5 Index is now operational and we intend to launch a tracker fund towards the end of the financial year.

We continue to promote the benefits of active hedging both in the US and UK." 

Record will announce its half year results on 17th November 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.