Record (REC)

Business description

Record is a specialist currency manager, providing currency hedging and return-seeking mandates to institutional clients. Services include passive and dynamic hedging and return-seeking currency strategies via funds or segregated accounts.

Stock data

Market cap.£87.1m
Last close43.75p
High / Low (52 weeks)52.5p / 40.2p
Stock market listingLN
Forecast net cash (£m)13.9
Forecast gearing ratio (%)N/A

Price performance

Relative *(17.1)(15.1)2.3

* % Relative to local index

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Company news

Y/E Mar Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 21.2 7.2 7.0 2.54 17.2 17.3
2017A 23.0 7.9 7.9 2.90 15.1 13.4
2018E 24.4 8.2 8.0 3.07 14.3 12.5
2019E 22.5 6.5 6.2 2.49 17.6 16.1

Last updated on 25/04/2018

Investment summary

Record is differentiated from conventional asset managers by its focus on currency markets where it benefits from its independent status and over 35 years of experience. Passive hedging services account for over 50% of revenues and its offering is increasingly bespoke. The Q418 trading update showed AUME up 7% to $62.2bn vs Q417 but -5% in £ terms. There was a net outflow of $1.6bn in the quarter which can be seen as normal business fluctuation. Record flags an alternative fee structure offered in passive hedging recognising its enhanced service offering. This could reduce passive hedging management fees by c. 10% all else equal in FY19, but this excludes any benefit from performance fees that the company expects will more than match the reduction over time.

Last updated on 27/04/2018

Industry outlook

Macro concerns over possible adverse tail events persist, so conditions remain favourable for Record to market its services to potential clients. Work to broaden the product range, increase customisation and the enhanced passive hedging fee structure should be helpful. Reflecting the move in the GBP/USD rate and the fee change noted above, our FY19 EPS estimate is reduced from 3.34p to 2.49p but this excludes any potential performance fees under this new fee structure. FY18 results are due to be announced 15 June.

Last updated on 27/04/2018

Key management

Neil Record, Chairman
James Wood-Collins , CEO
Steve Cullen , CFO
Bob Noyen, Chief Investment Officer

Company address

Morgan House
Madeira Walk
United Kingdom
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