stock-1863880

Evidence of new strategy gaining traction

Record 30 November 2021 Update
Download PDF

Record

Evidence of new strategy gaining traction

H122 results

Financial services

30 November 2021

Price

85p

Market cap

£161m

Net cash (£m) at end-September 2021

17.3

Shares in issue net of EBT

189.7m

Free float

53%

Code

REC

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(1.4)

(7.3)

72.6

Rel (local)

0.3

(5.9)

52.9

52-week high/low

102p

45p

Business description

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

Next events

Q322 trading update

January 2022

Analysts

Andrew Mitchell

+44 (0)20 3681 2500

Martyn King

+44 (0)20 3077 5745

Record is a research client of Edison Investment Research Limited

Record’s H122 results showed benefits from its growth and diversification strategy. Its first new product, a sustainable fund, is increasing AUM and there is a pipeline of further opportunities with the potential to add further AUM and produce a richer fee mix. Board confidence in the outlook is evident in the step up in the ordinary dividend.

Year end

Revenue (£m)

PBT
(£m)

EPS*
(p)

DPS**
(p)

P/E
(x)

Yield
(%)

03/20

25.6

7.7

3.26

2.30

26.1

2.7

03/21

25.4

6.2

2.73

2.30

31.1

2.7

03/22e

34.4

10.6

4.21

3.80

20.2

4.5

03/23e

38.2

12.3

5.05

4.60

16.8

5.4

Note: *EPS is diluted. **DPS excludes special dividends.

H122 results show strong progress

At end September Record’s assets under management equivalent (AUME) was $84.1bn (+28% y-o-y) and the company has reported strong first-half figures for the period to end September. Revenue was up 38% to £16.3m benefiting from the rise in average AUME (we calculate +20% yoy 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 almost doubled to £5.2m. Diluted EPS was 2.01p (H121: 1.10p) 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.

Benefits of diversification and growth strategy

The group continues to seek growth and diversification through new product introductions and partnerships supported by IT modernisation and staff succession and retention. The Record EM Sustainable Finance Fund (in partnership with UBS Global Wealth Management) was the first of the new products to be launched in June and has since increased its AUM from c $750m to c $1.2bn. Record expects to launch another product, a municipal loan fund focused on the German institutional market, before the end of FY22. This will be in partnership with Universal-Investment and will include a yield-enhancing component provided by one of Record’s existing currency management clients. Further new products are in the pipeline. The European sales team has been expanded and, in tandem with increased activity including a dynamic hedging mandate win, the German subsidiary is applying for a BaFin licence.

Costs hold back FY22e EPS but strong FY23e growth

Our FY22 revenue estimate has been increased by 4% but our diluted EPS reduced by 17% to reflect increased costs and tax charge. Our newly introduced FY23 estimate captures more of the benefit of new product introductions and the prospective P/E falls from 20.2x (FY22) to 16.8x (FY23). The FY22 prospective yield is 4.8% including an assumed special dividend.

Record in numbers

We have updated our compilation of the information Record provides on AUME, fee income, clients and asset class exposure (Exhibit 1). This also includes our calculations of estimated average fee rates by strategy and hedging fee exposure by underlying asset class.

We highlight a number of points:

Hedging services in total account for 87% of AUME and 66% of management fees, reflecting the lower fees that apply to passive hedging. Based on our estimates, the growth in dynamic hedging and currency for return would reduce the contribution from passive hedging from 46% in FY21 to c 30% in FY23.

Since 2017 the number of clients has risen from 59 to 89 and AUME from $58.2bn to $84.1bn (compound annual growth of 8.5% in AUME).

The longevity of clients: 63%, measured by AUME, have been in place for over six years. However, with the new focus on growth there is a healthier inflow of new clients, which often start with a relatively low AUME level: by number, 28% of clients have been with Record for less than a year.

Geographically, the United States accounts for a third of revenue followed by Europe (ex-Switzerland and UK) and Switzerland.

We estimate 58% of hedging services fees relate to underlying equity assets and 19% to fixed income.

Exhibit 1: Record profile in numbers (H122 except where indicated)

Analysis by strategy

AUME (%)

Management fees (%)*

Est. average fee rate (bp)**

Dynamic hedging

12.2

29.7

13.6

Passive hedging

74.9

36.0

2.6

Currency for return

6.4

12.9

12.5

Multi-product

6.2

21.4

18.2

Cash

0.2

N/A

N/A

Total

100.0

100.0

5.4

Value

$84.1bn

£16.1m

Client analysis

Number (by financial year)

Concentration

% AUME

Concentration

% fees

Longevity (years)

% AUME

2017

59

Top 10

65

Top 10

74

0-1

15

2018

60

Next 10

22

Next 10

19

1-3

4

2019

65

Balance

13

Balance

7

3-6

18

2020

72

6-10

23

2021

89

>10

40

H122

89

100

100

100

Geographical analysis and AUME progression

By country

% revenue

By base currency (FY21)

% AUME

AUME progression

($bn)

US

33

Swiss franc

47

2017

58.2

Europe (rest)

29

Sterling

12

2018

62.2

Switzerland

27

US dollar

20

2019

57.3

UK

7

Euro

15

2020

58.6

Other

4

Other

6

2021

80.1

100

100

H122

84.1

Underlying asset class exposure of dynamic and passive hedging AUME (%)

Dynamic

Passive

Estimated % of hedging fees

Equity

91

30

58

Fixed income

0

34

19

Other

9

36

24

100

100

100

Source: Record, Edison Investment Research. Notes: *Management fee excluding performance fees. **Fee rate is our own calculation and within each strategy there will be a range of mandate types and fee structures/levels. Rounding may mean some columns do not sum.

H122 results analysis

Starting with AUME, Exhibit 2 shows the progression of Record’s AUME levels and net flows from H121 (ending September 2020). During H122 overall AUME in US dollar terms increased by 5% to $84.1bn with net inflows of $1.9bn and positive market and other moves of $2.1bn. The net inflows included the launch of the Record Emerging Market Sustainable Finance Fund on 29 June in an exclusive strategic partnership with UBS Global Wealth Management. This earns a fee rate commensurate with an actively managed fixed income fund (50–60bp) and had a launch size of approximately $750m (included in currency for return AUME). The fund added a further $75m in Q222 with subsequent inflows taking its current AUME to nearly $1.2bn.

The 12-month increase in AUME was 28% or $18.2bn which included the build-up of a substantial dynamic hedging mandate which contributed to a $6.7bn inflow in that segment and total inflows of $11.9bn. Market and other moves added a further $6.3bn.

In sterling terms (not shown), AUME increased from £61.2bn to £62.4bn (2%) in the first half, with the average level increasing by 20% y-o-y and 9% sequentially (based on quarter end AUME figures).

Exhibit 2: AUME changes

$bn

AUME

Net flows

H121

H221

H122

H121

H221

H122

Dynamic hedging

3.2

9.3

10.3

0.5

6.1

0.6

Passive hedging

55.6

61.5

63

(0.8)

2.9

0.3

Currency for return

3.4

3.9

5.4

0.0

0.0

1.0

Multi-product

3.5

5.2

5.2

0.0

1.0

0.0

Cash and futures

0.2

0.2

0.2

0.0

0.0

0.0

Total

65.9

80.1

84.1

(0.3)

10.0

1.9

Markets

4.1

4.3

1.8

FX and scaling for mandate volatility targeting

3.5

(0.1)

0.3

Total change

7.3

14.2

4.0

Source: Record

Key points from the income statement

The profit and loss account for H122 is set out in Exhibit 3. We comment on key areas below, with comparisons with H121 unless stated.

Management fees increased by 43% reflecting the 20% higher average AUME (in sterling terms), and a higher fee-rate mix. Out of the £4.9m total increase the largest absolute change (+£2.9m) was in dynamic hedging fees resulting from the new mandate win mentioned above. Currency for return and multi-strategy each contributed £1.1m increases in fee income with passive hedging slightly lower on increased AUME but a reduced average fee rate.

Fee rates on a like for like basis were reported to be stable, while changes in the mix of AUME meant that the group average increased from 4.5bp H121 and 5.0 bp H221 to 5.4bp. Notable contributors here were the large dynamic hedging mandate (which diluted the fee rate in the category but raised the group average) and the Record EM Sustainable Finance Fund within currency for return.

Total revenue rose 38% with other investment services income reduced by the reclassification of one mandate into the multi-product category (also reflected in management fee and AUME increases in this area). As in H121 there were no performance fees.

Costs increased by nearly 19% (and 8% from H221) within which personnel costs before the group profit share (GPS) were stable at £5m. The GPS more than doubled to £2.8m reflecting the rise in operating profit. As a percentage of pre-GPS operating profit the payment was at the top of the group’s 25–35% target range in recognition of the progress made in implementing strategy and the need to incentivise and retain staff. The resulting increase in total personnel costs was 24%. Non-personnel costs rose 7% to £2.9m including consultancy costs related to the modernisation of IT systems.

This left pre-tax profit at nearly twice the H121 level, while a higher effective tax rate of 22% (capital spending and research allowances together with deferred tax movements lowered the prior year rate to 13%) meant that the increase in diluted EPS was 83%.

The ordinary dividend is increased from 1.15p to 1.80p (+56%) representing a payout of 90% of diluted earnings. The overall dividend policy is unchanged, which is to pay dividends at least covered by earnings taking into account capital requirements (including regulatory requirements and a buffer for operating expenses, working capital and investment expectations). With these results the board’s confidence in the outlook and implementation of the new strategy has resulted in greater emphasis on progress in ordinary dividends. Special dividends will still be considered as a way of returning any annual earnings in excess of ordinary dividends and capital requirements.

Exhibit 3: H122 P&L analysis

£000s

H121

H221

H122

Change versus H121

Change versus H221

Dynamic hedging

1,889

3,734

4,783

153.2%

28.1%

Passive hedging

6,027

5,350

5,802

-3.7%

8.4%

Currency for return

937

1,068

2,077

121.7%

94.5%

Multi-product

2,379

3,494

3,446

44.9%

-1.4%

Management fees

11,232

13,646

16,108

43.4%

18.0%

Performance fees

0

81

0

N/A

N/A

Other investment services income

606

(153)

225

-62.9%

-247.1%

Total revenue

11,838

13,574

16,333

38.0%

20.3%

Cost of sales

(213)

(186)

(206)

-3.3%

10.8%

Gross profit

11,625

13,388

16,127

38.7%

20.5%

Administrative expenses

(9,016)

(9,918)

(10,713)

18.8%

8.0%

Other income/expense

(36)

77

(264)

633.3%

-442.9%

Operating profit

2,573

3,547

5,150

100.2%

45.2%

Net finance income

20

13

4

-80.0%

-69.2%

Profit before tax

2,593

3,560

5,154

98.8%

44.8%

Taxation

(449)

(353)

(1,156)

157.5%

227.5%

Profit after tax

2,144

3,207

3,998

86.5%

24.7%

Minority interests

7

(7)

0

N/A

N/A

Attributable net profit

2,151

3,200

3,998

85.9%

24.9%

Diluted EPS (p)

1.10

1.63

2.01

82.9%

22.9%

DPS (p)

1.15

1.60

1.80

56.5%

Tax rate

13%

10%

22%

Source: Record, Edison Investment Research

On product investment performance, Record reports that the continued provision of central bank liquidity to markets has meant that foreign exchange forward pricing has remained stable and that transaction costs have been low, limiting the opportunities for the enhanced passive hedging product to add value; over H122 a representative account recorded a negative return of 1bp relative to a fixed-tenor benchmark. However, since inception there was a positive return of 8bp per annum and, for comparison, the average fee rate in passive hedging is under 3bp. Fluctuations in exchange rates meant that dynamic hedging produced a marginally negative return reflecting costs generated by varying hedge ratios, but here again the since inception return remains positive at 43bp per annum.

Within currency for return products, the Record EM Sustainable Finance Fund (US dollar share class) had a negative return in H122 (-0.32%) but outperformed relevant indices such as the J.P. Morgan GBI EM Global Diversified Index (-3.56%). Finally, the multi-strategy product generated a positive return of 1.69% and a since inception return of 1.00%, with volatility of 3.13% per annum.

Strategy update and outlook

There is encouraging evidence of progress in the group’s strategy to increase growth, diversify and modernise.

Work on introducing new products in partnership with clients to meet their needs has started to bear fruit. The Record EM Sustainable Finance Fund has begun to make a significant revenue contribution with the full benefit to become evident in FY23. A Luxembourg-based municipal bond fund focused on the German institutional market is due to be launched in Q422 in partnership with Universal-Investment as management company (€710bn assets under administration). Record introduced an existing client, VTeam, to provide yield enhancement through European trade receivables financing. Record’s fixed income and derivatives teams will provide passive bond management. The fee rate is expected to be close to the estimated average fee rate given for dynamic hedging in Exhibit 1 of c 13bp. These products illustrate a move beyond Record being purely a currency manager and deploying its expertise to manage other assets and, in the process, earn higher fee rates. Further products are in the pipeline and other clients have also shown interest in the sustainable finance product (Record is free to address the institutional market). While the municipal bond fund has yet to launch, it and other products incorporating a yield uplift would appear to have a substantial market opportunity.

Talent development and management succession is underway with new appointments and promotions made in the last year. Incentives have also been provided to help motivate and ensure retention (90% in FY21 and an average of 85% in the prior four years). A joint share ownership plan was introduced in 2020 to help the next generation of management to acquire shares, option awards have been made, a commission scheme rewards contributions to new business acquisition and, as noted earlier, the group profit share payments have been set at the top of the target range. As we outline in the next section, increased costs arising from higher average renumeration is likely to increase personnel costs significantly in H222 and FY23: an investment to underpin the growth strategy.

The group continues with its technology modernisation process with projects that have included a new data warehouse and the introduction of third-party systems, on time and on budget. The internal IT team has been enlarged and specialist contractors are engaged to tackle elements of the programme as required. The investment will support new products, increase scalability and efficiency thereby enabling competitive offerings in lower-margin areas.

Other developments include additions to the European sales team in response to increased business and potential client interest. This year an application for a licence to BaFin has been made by the German subsidiary, which was established in November 2020.

Prospectively, Record reports that post-lockdowns clients have returned to considering new projects and that the themes of enhancing yield and sustainability are prominent for them. If crystallised in the form of mandates, this would validate Record’s known product initiatives while other products in development could provide further diversity by both category and geography. Meanwhile the existing core products in hedging remain stable with a generally long-term, large, institutional client base. The group underlines that it remains in transition and that there is still much more potential to deliver through its strategy. In the near term, increased costs (primarily personnel) are likely to moderate profit growth, but if revenue from new initiatives develops in line with or above our expectations (see below) then there is scope for good operational gearing.

Estimate changes and financial position

There are four main drivers of change when looking at our estimates for FY22 and FY23 compared with FY21.

The addition of the large dynamic hedging mandate that began in H221. Because of its size it has a lower fee rate than the previous dynamic hedging average, but nevertheless pushes up the group average fee rate.

The Record EM Sustainable Finance Fund began to contribute from Q222. As noted earlier, its AUM has increased from c $0.75bn to nearly $1.2bn and it now seems reasonable to factor in some further allocations of assets to the fund going forward. We have assumed a further $0.2bn in H222 and $0.4bn for FY23. These numbers are indicative with risks in both directions.

The municipal bond fund is expected to launch in Q422 and in our estimates we assume that it will start to contribute from the beginning of FY23. We assume AUM builds progressively from $0.25bn to $1.5bn by the end of FY23. Again, this is an indicative estimate but at this stage in the fund’s development the fee contribution would remain modest in a group context (c £0.7m) given the level of AUM assumed.

As the group continues to invest in the pursuit of its growth agenda, costs are expected to increase strongly in FY22 and FY23 as highlighted above with total administrative expenses up 22% and 11% respectively. Variable compensation (the GPS) is an important driver here although we have also factored in increases in fixed salaries. Non-personnel costs, including the cost of IT contractors, are assumed to rise by 16% for FY22 and 5% for FY23.

For the remaining elements of AUME we have not assumed any positive or negative net flows in our estimates. We have also assumed there are no performance fees over the forecast period. In practice the background for enhanced passive hedging mandates remains difficult and in the currency for return category the multi-strategy product still has some ground to catch up before earning performance fees.

As shown in Exhibit 4, our estimate for FY22 revenue is increased but higher assumed costs and tax rate result in a reduction in pre-tax profit and EPS estimates. For FY23, where we did not previously have published estimates, there is significant year-on-year growth in revenue, pre-tax profit and earnings (11%, 16% and 20% respectively).

Exhibit 4: Estimate changes

 

Revenue (£m)

PBT (£m)

EPS (p)

DPS (p)*

 

Old

New

Change

Old

New

Change

Old

New

Change

Old

New

Change

03/22e

33.0

34.4

4%

12.2

10.6

-13%

5.05

4.21

-17%

2.30

3.80

65%

03/23e

N/A

38.2

N/A

12.3

5.05

N/A

4.60

Source: Edison Investment Research. Notes: *Dividend excludes any special payment.

Our dividend estimates shown above exclude special dividends. Following the shift in emphasis to ordinary dividends our FY22 estimate is increased by 65%. We pencil in special payments of 0.3p and 0.35p for this year and next, giving total dividends of 4.10p and 4.95p.

The group figure for net cash and money market instruments managed as cash at the half year-end was £17.3m (FY21: a comparable own cash figure of £16.2m after stripping out the non-controlling interest share of cash held by seed funds). The group capital position remains strong. At the end of FY21 Record had regulatory capital resources of £26.4m compared with a regulatory capital requirement of £9.4m. At end H122 tangible equity stood at £24.9m (after the FY21 final dividend and net share buy-backs totalling £5.7m but before payment of the interim dividend of c £3.4m). The introduction of new products is not expected to have a significant impact on Record’s capital requirement, which is calculated under a Pillar 2 risk-based approach (end-March Pillar 1 requirement was £4m).

Valuation comparison

Exhibit 5 shows an updated version of our comparative valuation table, with a selection of quoted UK fund managers. Following the price strength seen after the H122 results, Record shares trade at a premium to the average prospective, calendarised P/E and EV/EBITDA multiples, although the P/E premium narrows for calendar-year 2022 as our estimates begin to show the greater potential benefit of the new product introductions more than offsetting the increase in costs outlined above. On our estimates Record’s prospective yield (including special dividend) would be 4.5% for FY22 and 5.4% for FY23.

Exhibit 5: Comparing valuation with UK fund managers

Price
(p)

Market cap (£m)

P/E
2021e (x)

P/E
2022e (x)

EV/EBITDA 2021e (x)

Dividend yield (%)

Ashmore

301

2,142

12.2

13.1

7.1

5.6

City of London Investment Group

514

260

11.2

10.5

N/A

6.4

Impax Asset Management

1,368

1,814

40.9

30.9

33.1

0.6

Jupiter

239

1,320

8.1

9.3

4.5

7.2

Liontrust

2,035

1,246

19.7

16.2

13.7

2.3

Man Group

219

4,094

8.6

10.6

6.3

3.6

Polar Capital

777

779

13.2

11.4

8.4

5.1

Schroders

3,453

9,101

15.2

14.2

11.6

3.3

Average

16.1

14.5

12.1

4.3

Record

85.0

161

22.1

17.6

14.9

2.8

Source: Refinitiv, Edison Investment Research. Note: P/E and EV/EBITDA on a calendar-year basis. Record’s (FY21) dividend yield excludes the special dividend. Priced at 29 November 2021.

Exhibit 6: Financial summary

£'000s

 

 

2018

2019

2020

2021

2022e

2023e

Year end 31 March

 

 

 

 

 

 

 

 

PROFIT & LOSS

 

 

 

 

 

 

 

 

Revenue

 

 

23,834

24,973

25,563

25,412

34,416

38,218

Operating expenses

 

 

(16,735)

(17,089)

(17,996)

(19,333)

(23,597)

(25,936)

Other income/(expense)

 

 

173

(8)

82

41

(284)

(40)

Operating Profit (before amort. and except.)

 

 

7,272

7,876

7,649

6,120

10,535

12,241

Finance income

 

 

56

113

88

33

17

16

Profit Before Tax

 

 

7,328

7,989

7,737

6,153

10,552

12,257

Taxation

(1,182)

(1,559)

(1,365)

(802)

(2,216)

(2,329)

Minority interests

 

 

0

0

48

0

0

0

Attributable profit

 

 

6,146

6,430

6,420

5,351

8,336

9,928

 

 

 

 

 

 

 

Revenue/AuME (excl. perf fees) bps

 

 

5.1

4.9

4.9

4.8

5.5

5.9

Operating margin (%)

 

 

30.5

31.5

29.9

24.1

30.6

32.0

 

 

 

 

 

 

 

Average Number of Shares Outstanding (m)

 

 

206.5

198.1

197.1

196.2

198.0

196.8

Basic EPS (p)

 

 

3.03

3.27

3.26

2.75

4.37

5.23

EPS - diluted (p)

 

 

2.98

3.25

3.26

2.73

4.21

5.05

Dividend per share (p)

 

 

2.30

2.30

2.30

2.30

3.80

4.60

Special dividend per share (p)

 

 

0.50

0.69

0.41

0.45

0.30

0.35

Total dividend (p)

 

 

2.80

2.99

2.71

2.75

4.10

4.95

 

 

 

 

 

 

 

BALANCE SHEET

 

 

 

 

 

 

Non-current assets

 

 

2,339

2,161

4,868

5,153

4,724

4,274

Intangible Assets

 

 

228

288

470

420

370

320

Tangible Assets

 

 

910

761

751

683

473

268

Investments

 

 

1,115

1,112

2,472

3,046

3,178

3,178

Other

 

 

86

0

1,175

1,004

703

508

Current Assets

 

 

29,737

31,427

31,149

28,045

26,737

27,708

Debtors

 

 

6,775

7,562

8,704

8,006

9,736

10,514

Cash

 

 

12,498

12,966

14,294

6,847

11,126

11,318

Money market instruments

 

 

10,198

10,735

7,958

12,932

5,875

5,875

Other

 

 

266

164

193

260

0

0

Current liabilities

 

 

(5,525)

(6,158)

(6,955)

(5,992)

(5,895)

(6,047)

Creditors

 

 

(2,630)

(2,736)

(3,009)

(3,426)

(4,339)

(4,686)

Financial liabilities

 

 

(2,467)

(2,621)

(2,191)

(1,696)

0

0

Other

 

 

(428)

(801)

(1,755)

(870)

(1,556)

(1,361)

Non-current liabilities

 

 

0

(29)

(901)

(407)

(77)

(77)

 

 

 

 

 

 

 

Net Assets

 

 

26,551

27,401

28,161

26,799

25,489

25,858

Minority interests

 

 

0

60

132

0

0

0

Net assets attributable to ordinary shareholders

 

26,551

27,341

28,029

26,799

26,085

25,489

 

 

 

 

 

 

 

No of shares at year end

 

 

199.1

199.1

199.1

199.1

199.1

199.1

NAV per share p

 

 

13.3

13.7

14.1

13.5

12.8

13.0

 

 

 

 

 

 

 

CASH FLOW

 

 

 

 

 

 

Operating Cash Flow

 

 

2,746

7,026

6,543

6,798

10,357

10,226

Capex

 

 

(236)

(72)

(243)

(230)

(140)

(145)

Cash flow from other investing activities

 

 

7,899

(561)

1,513

(6,210)

5,074

(134)

Dividends

 

 

(6,810)

(5,517)

(5,888)

(5,290)

(6,672)

(8,559)

Other financing activities

 

 

(10,367)

(613)

(943)

(2,368)

(4,378)

(1,195)

Other

 

 

146

205

346

(147)

38

0

Net Cash Flow

 

 

(6,622)

468

1,328

(7,447)

4,279

193

Opening cash/(net debt)

 

 

19,120

12,498

12,966

14,294

6,847

11,126

Closing net (debt)/cash

 

 

12,498

12,966

14,294

6,847

11,126

11,318

Closing net (debt)/cash inc money market instruments

22,696

23,701

22,252

19,779

17,342

18,698

 

 

 

 

 

 

 

AUME ($bn)

 

 

 

 

 

 

Opening

 

 

58.2

62.2

57.3

58.6

80.1

84.7

Net new money flows

 

 

(1.2)

(4.5)

4.6

9.7

2.1

1.9

Market/other

 

 

5.2

(0.4)

(3.3)

11.8

2.5

0.8

Closing

 

 

62.2

57.3

58.6

80.1

84.7

87.5

Source: Record accounts, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Record and prepared and issued by Edison, in consideration of a fee payable by Record. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Record and prepared and issued by Edison, in consideration of a fee payable by Record. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Share this with friends and colleagues