Record

LN: REC

Market Cap£143m

Last Close 71.8p

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

Record’s Q422 trading update showed (March) year-end AUME of $83.1bn up 3.7% over 12 months and down 2.6% in the quarter. Net inflow was $0.8bn in Q422 and $2.4bn for the full year (3.0% of opening AUME). Other moves in Q422 were a 2.7% or $2.3bn negative market move and a $0.7bn reduction as a result of foreign exchange and scaling moves in mandates with a volatility target. We calculate that average AUME in sterling terms increased by 17.4% for FY22. Record earned performance fees of £0.5m in the quarter reflecting increased interest rate differentials in the market, which create better opportunities for enhanced passive hedging mandates to add value.

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	22.0	21.6
2021A	25.4	7.0	6.2	2.73	26.3	20.7
2022E	35.2	12.3	11.0	4.40	16.3	13.6
2023E	39.3	12.4	11.6	4.77	15.1	14.6

Industry outlook

The resilience in Record’s AUME in a period of weakness in some markets reflects the diversity of market exposures of underlying client portfolios. Likewise, the diversity of client types may have contributed to a positive quarter for flows with no indication of a weaker trend since the period end. Indeed, since end March an existing Dynamic Hedging client has allocated a further $1bn to its mandate with a further $1bn expected to follow in H123. Record noted that, because of the scale of this mandate, the marginal fee rate will be below the existing average in this product segment. FY22 results are due 21 June.

Last updated on 01/07/2022