Record

LN: REC

Market Cap£159.2m

Last Close 80p

Record is a specialist independent currency manager. It provides a number of products and services, including passive and dynamic hedging, and a range of currency for return strategies, including funds and customised segregated accounts.

Investment summary

At end September Record’s AUME was $84.1bn, up 28% y-o-y and the company reported strong H122 figures. Revenue rose 38% to £16.3m benefiting from gains in average AUME (we calculate +20% y-o-y in sterling terms) and a richer product mix. This reflected significant mandate wins in the higher fee-rate dynamic hedging and, more recently, currency for return categories. Even after increased investment in staff costs and IT spending, the operating margin rose from 22% to 32% and pre-tax profit doubled to £5.2m. EPS was 2.08p (1.10p H121) and, reflecting confidence in the outlook and hence a willingness to place greater emphasis on the ordinary dividend, the interim dividend was set at 1.80p versus 1.15p. We will review our estimates following these results.

Y/E Mar	Revenue (£m)	EBITDA (£m)	PBT (£m)	EPS (fd) (p)	P/E (x)	P/CF (x)
2020A	25.6	8.5	7.7	3.26	24.5	24.1
2021A	25.4	7.0	6.2	2.73	29.3	23.1
2022E	34.4	11.9	10.6	4.21	19.0	15.3
2023E	38.2	13.0	12.3	5.05	15.8	15.4

Industry outlook

The group continues to pursue its strategy of seeking growth and diversification through new product introductions and partnerships supported by IT modernisation and staff succession. The Record EM Sustainable Finance Fund has increased its AUM from c $750m to c $1.2bn since its June launch. Record expects to launch another product, a Municipal Loan fund focused on the German institutional market, before the end of FY22 (in partnership with Universal-Investment). Further new products are in the pipeline.

Last updated on 18/01/2022