Record — Investing in service enhancements

Record (LSE: REC)

Last close As at 28/03/2024

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Research: Financials

Record — Investing in service enhancements

Record’s Q4 update showed a modest reduction in AUME, but FX rate moves and an adjustment in fee structure for passive hedging prompt a marked estimate reduction for FY19. Over time, performance fees could mean the apparent shortfall will be at least made good, while the changes should aid client retention and help win new mandates. Neither performance fees nor unannounced net AUME flows are included in our estimates.

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Written by

Financials

Record

Investing in service enhancements

Q418 trading update

Financial services

25 April 2018

Price

42.60p

Market cap

£85m

Net cash and money market instruments at 30 Sept 2017 (£m)

26.3

Shares in issue

199.1m

Free float

32%

Code

REC

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(12.3)

0.4

3.9

Rel (local)

(17.6)

4.4

(0.3)

52-week high/low

52.5p

40.2p

Business description

Record is a specialist independent currency manager that 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.

Next events

FY18 results

15 June 2018

Q119 trading update

20 July 2018

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 Q4 update showed a modest reduction in AUME, but FX rate moves and an adjustment in fee structure for passive hedging prompt a marked estimate reduction for FY19. Over time, performance fees could mean the apparent shortfall will be at least made good, while the changes should aid client retention and help win new mandates. Neither performance fees nor unannounced net AUME flows are included in our estimates.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS**
(p)

P/E
(x)

Yield
(%)

03/16

21.2

7.0

2.54

1.65

16.8

3.9

03/17

23.0

7.9

2.90

2.00

14.7

4.7

03/18e

24.4

8.0

3.07

2.30

13.9

5.4

03/19e

22.5

6.2

2.49

2.42

17.1

5.7

Note: *PBT and EPS for FY16 exclude non-controlling interests related to seed investments which are also excluded from subsequent years following a change in presentation. EPS are diluted and **DPS excludes special dividends.

Q418 update

AUME for end-March 2018 stood at $62.2bn, an increase of 6.9% on the prior year end’s $58.2bn. Signalling the adverse move in exchange rate between the two year-ends, sterling-denominated AUME was 4.9% lower. Record highlights that while most fee rates have been stable, it has offered an alternative structure to passive hedging clients where it would like to make use of techniques to reduce the clients’ hedging costs. Here, Record charges a lower management fee but can earn a performance fee depending on success in managing costs and adding value over a benchmark. The impact on passive hedging management fees is put at 10% for FY19, all else being equal and excluding any performance fees. Record’s continued investment in enhanced service levels to clients is a further, smaller factor behind our estimate reduction following the update. (See overleaf for further discussion of the update.)

Outlook: Focus on client service

The global macro backdrop remains conducive to discussion of hedging strategies with potential clients given the presence of a range of potential tail risks, even though near-term currency volatility has remained more muted and the period of dollar weakness has tended to create a headwind in the US market. Record’s focus on bespoke service and added value in passive hedging (>50% of revenue) should help in retaining and winning new clients.

Valuation

Our earnings estimate for FY18 is little changed but the FY19 forecast is reduced from 3.34p to 2.49p as a result of the move in the £/US$ rate since our last adjustment, together with allowance for a lower passive hedging fee rate and slightly higher costs than previously. Performance fees could reverse the impact of the fee rate assumption, while positive AUME flows could generate estimate upgrades. The balance sheet remains strong and prospective yield attractive at over 5%.

Q418 trading update

The quarterly update to the end of March 2018 showed an overall reduction in AUME of 2.7%. This primarily reflected a net client outflow for the quarter equivalent to 2.5% of opening AUME and was similar to the $1.4bn inflow seen in the prior quarter. Market and foreign exchange movements virtually offset each other. AUME details for Q418 and FY18 are shown in Exhibit 1 and discussed further below.

Exhibit 1: AUME changes

Year-end March

Q417

Q318

Q418

Q418

FY18

$bn

AUME

AUME

AUME

Net flows

Net flows

Dynamic hedging

6.3

4.5

4.3

(0.1)

(1.7)

Passive hedging

48.2

54.3

53

(1.5)

(0.5)

Currency for return

1.0

1.7

1.6

0.6

Multi-product

2.5

3.1

3

0.3

Cash and futures

0.2

0.3

0.3

0.1

Total

58.2

63.9

62.2

(1.6)

(1.2)

Markets

(1.4)

1.3

FX

1.3

3.8

Scaling effect (for mandates with volatility targets)

0.1

Total change

(1.7)

4.0

Source: Record, Edison Investment Research

AUME at the period end was $62.2bn versus $58.2bn (+6.9%) at the end of FY17, while in sterling terms it stood at £44.3bn compared with £46.6bn (-4.9%), highlighting the impact of strength in sterling between the two year ends. The outflows seen during Q4 were mainly in passive hedging and reflected a number of reductions in size of mandate and two terminations offset by two additions, so can reasonably be regarded as within the range of normal fluctuation in business.

Record has been notified of the termination of one passive hedging mandate of $1.7bn. Positively, a new passive hedging mandate of $2.2bn has been awarded, subject to contract and a $0.3bn multi-strategy mandate. These changes are expected to take place during Q119 and are factored into our estimates.

Fee margins were stable for most products, while Record highlights an important exception to this in passive hedging. Here, it has responded to changes in the FX market and new opportunities to add value and reduce costs for clients. Among the market changes is the emergence of a difference between money market interest rates and those implied in foreign exchange forward contracts (basis). This partly reflects capital requirements for banks, which would have previously been more active in arbitraging the differential. The difference creates an opportunity for Record to provide a service exploiting this to manage the cost of passive hedging. Techniques used include active management of the tenor of the contracts employed. This is not suitable for all clients as it can involve more frequent cash payments that do not fit the underlying management mandate, but for others it can provide added value. As returns from this incremental service are episodic, Record offers the option of charging a lower management fee but with the potential to earn a performance fee. Over time, the performance fees are expected to match or exceed the management fee forgone. There is not expected to be a noticeable impact on FY18 but Record guides that the passive hedging management fee level for FY19 would be reduced by c 10% by the change, all else being equal and excluding any performance fees. Information on any performance fees earned will be included in quarterly updates.

While factoring in the guidance acts as a drag on our earnings forecast, there is the potential to generate positive surprises through performance fees, which we have not included in our forecasts. The adjustment to fees is also important as a way of both defending Record’s existing client base and facilitating new mandate wins through further development of a customised service offering, a theme which Record has been consistently pursuing.

On this front the company indicates that it has continued to invest (modestly) in additional resources to support its service levels and, reflecting this, we have allowed for a slightly higher number of employees than previously in our FY19 forecast.

On performance, Record reports that while the value strategy return was positive in the quarter, the emerging market, momentum and FRB10 index all recorded negative returns. As a consequence, the multi-strategy product (ungeared) returned -0.68% during the quarter. Even so, the longest-standing multi-strategy mandate (since inception end July 2012) is still showing a return of 1.30% per annum on an ungeared basis: a marketable proposition for a differentiated strategy.

To this end, the company has seeded a fund based on the strategy and encouragement is provided by the client win noted above in this area. Although the fund is new, the availability of a track record of over five years for the strategy should be helpful in attracting external investors.

Financials

Exhibit 2 shows the changes in key figures from our forecasts following the trading update. Our estimate for FY18 is little changed, while the main drivers of the reduction in forecast for FY19 are the movement in the £/US$ exchange rate (-6%) and the indicated potential impact of the change in fee structure on passive hedging management fees as outlined above. On this point, it is important to note that we have not allowed for any performance fees in our forecasts. Also, we have only allowed for the net business flows signalled in the Q418 statement.

While the FY19 estimate change shown below is substantial, it should be considered in light of the potential upside from this level that performance fees, positive net new business flows or a favourable move in exchange rates could deliver. Flexing just one of these assumptions as an example, if we factor in a stable (c 3.4bp) rather than reduced fee margin for passive hedging, on the basis that performance fees do make up for the reduction in base management fees, then FY19 earnings would be about 2.9p, roughly halving the forecast reduction. As a UK-based exporter of services, movements in exchange rates have a leveraged effect on Record profits only partly softened by movements in the level of variable compensation.  

Exhibit 2: Estimate changes

 

Revenue (£m)

% chg.

PBT (£m)*

% chg.

EPS (p)*

% chg.

DPS (p)**

% chg.

 

Old

New

 

Old

New

 

Old

New

 

Old

New

 

03/18e

24.6

24.4

(1%)

8.1

8.0

(2%)

3.13

3.07

(2%)

2.30

2.30

0%

03/19e

25.2

22.5

(10%)

8.4

6.2

(25%)

3.34

2.49

(25%)

2.42

2.42

0%

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

Valuation

We have updated our comparative table, which shows valuation multiples for UK asset managers and Record. While Record’s role as a specialist currency manager differs from those of the asset managers, there is a similarity in terms of charging structure and exposure to underlying equity and other markets.

Following the reduction in estimates shown above, Record stands on an above-average prospective calendar 2018 PER; although, were it able to earn sufficient performance fees to offset the change in passive hedging management fees, the multiple would fall to 14.6x, still above the average but more centrally placed. The historical EV/EBITDA for Record shown in the table does not capture the FX and fee-rate driven downgrades, and is markedly lower than average. However, even looking at a calendar 2018 multiple, which includes a large element of our FY19 estimate, this would still leave a multiple only modestly above the average at 9.1x versus 8.9x.

Exhibit 3: Earnings and EBITDA multiples for UK fund managers

Price (p)

Market cap (£m)

P/E (x)

EV/EBITDA (x)

Ashmore

418

2,978

18.6

14.1

City of London Inv Group

439

118

10.5

8.7

Impax Asset Management

160

208

14.4

27.2

Janus Henderson

32

4,611

11.3

12.7

Jupiter

455

2,080

13.0

8.8

Liontrust

580

293

13.5

22.0

Man Group

184

2,969

9.8

8.0

Polar Capital

520

486

14.8

21.6

Schroders

3,286

8,752

14.8

8.3

Average

13.4

14.6

Record

43

85

16.3

7.4

Source: Bloomberg, Edison Investment Research. Note: P/E and EV/EBITDA using calendar 2018 estimated earnings and last reported EBITDA, respectively. Priced as at 23 April 2018.

Exhibit 4: Financial summary

£000s

2015

2016

2017

2018e

2019e

March

 

 

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

 

 

 

 

 

 

 

Revenue (underlying)

 

 

20,865

21,246

22,952

24,361

22,529

Revenue

 

 

21,057

21,134

22,952

24,361

22,529

Operating expenses

 

 

(13,521)

(14,344)

(15,365)

(16,500)

(16,398)

Other income/(expense)

 

 

 

 

157

49

0

Operating Profit (before amort. and except.)

 

 

7,536

6,790

7,744

7,910

6,130

Finance income

 

 

146

143

112

64

107

Profit Before Tax

 

 

7,682

6,933

7,856

7,974

6,238

Taxation

(1,708)

(1,523)

(1,540)

(1,595)

(1,248)

Minority interests

 

 

(192)

131

0

0

0

Attributable profit

 

 

5,782

5,541

6,316

6,379

4,990

Normalised revenue (underlying)

 

 

20,865

21,246

22,952

24,361

22,529

Operating expenses (excl. dep'n and amortisation)

 

 

(13,206)

(14,023)

(15,023)

(16,150)

(16,073)

EBITDA

 

 

7,659

7,223

7,929

8,211

6,455

Depreciation and amortisation

 

 

(315)

(321)

(342)

(350)

(325)

Other income/(expense)

 

 

 

 

157

49

0

Normalised Operating profits

 

 

7,344

6,902

7,744

7,910

6,130

Finance income

 

 

146

143

112

64

107

Profit Before Tax (norm)

 

 

7,490

7,045

7,856

7,974

6,238

Normalised revenue/AuME (excl. perf fees) bps

 

 

6.2

6.0

5.2

5.2

4.9

Normalised operating margin (%)

 

 

35.2

32.5

33.7

32.5

27.2

Average Number of Shares Outstanding (m) (FD)

 

 

218.4

217.9

218.0

207.5

200.1

Basic EPS (p)

 

 

2.66

2.55

2.91

3.09

2.51

EPS - normalised fully diluted (p)

 

 

2.65

2.54

2.90

3.07

2.49

Dividend per share (p)

 

 

1.65

1.65

2.00

2.30

2.42

Special dividend per share (p)

 

 

0.00

0.00

0.91

0.79

0.09

Total dividend (p)

 

 

1.65

1.65

2.91

3.09

2.51

BALANCE SHEET

 

 

 

 

 

 

 

Fixed Assets

 

 

3,273

423

1,228

1,212

1,087

Intangible Assets

 

 

504

299

245

145

70

Tangible Assets

 

 

129

81

881

811

761

Investments

 

 

2,567

0

0

0

0

Deferred tax assets

 

 

73

43

102

256

256

Current Assets

 

 

37,053

40,541

44,247

34,705

33,448

Debtors

 

 

6,324

5,695

6,972

6,930

6,464

Cash

 

 

12,010

21,720

19,120

13,942

13,151

Money market instruments

 

 

18,100

13,020

18,102

13,304

13,304

Other

 

 

619

106

53

529

529

Current Liabilities

 

 

(4,522)

(3,256)

(8,644)

(9,253)

(9,031)

Creditors

 

 

(2,949)

(2,372)

(3,013)

(3,292)

(3,070)

Financial liabilities

 

 

 

 

(4,779)

(4,761)

(4,761)

Other

 

 

(1,573)

(884)

(852)

(1,200)

(1,200)

Net Assets

 

 

35,804

37,708

36,831

26,664

25,504

Minority interests

 

 

3,876

4,019

0

0

0

Net assets attributable to ordinary shareholders

 

31,928

33,689

36,831

26,664

25,504

No of shares at year end

 

 

217.5

217.2

221.4

199.1

199.1

NAV per share p

14.7

15.5

16.6

13.4

12.8

CASH FLOW

 

 

 

 

 

 

 

Operating Cash Flow

 

 

6,472

5,509

7,107

7,241

5,453

Capex

 

 

(128)

(29)

(899)

(130)

(150)

Cash flow from investing activities

 

 

0

(39)

(189)

(50)

(50)

Dividends

 

 

(3,266)

(3,750)

(3,592)

(6,839)

(6,151)

Other financing activities

 

 

(2,571)

7,737

(5,163)

(5,374)

107

Other

 

 

0

282

136

(27)

0

Net Cash Flow

 

 

507

9,710

(2,600)

(5,178)

(791)

Opening cash/(net debt)

 

 

11,503

12,010

21,720

19,120

13,942

Other

 

 

0

0

0

0

0

Closing net (debt)/cash

 

 

12,010

21,720

19,120

13,942

13,151

Closing net debt/(cash) inc money market instruments

30,110

34,740

37,222

27,246

26,455

AUME

 

 

 

 

 

 

 

Opening ($'bn)

 

 

51.9

55.4

52.9

58.2

62.2

Net new money flows

 

 

2.9

(1.4)

3.1

(1.2)

0.8

Market/other

 

 

0.6

(1.1)

2.2

5.2

1.1

Closing ($'bn)

 

 

55.4

52.9

58.2

62.2

64.1

Source: Company accounts, Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Record and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Limited (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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.
Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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

295 Madison Avenue, 18th Floor

10017, New York

US

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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Pty Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

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Copyright 2018 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Record and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investment Research Pty Limited (Corporate Authorised Representative (1252501) of Myonlineadvisers Pty Ltd (AFSL: 427484)) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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.
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Frankfurt +49 (0)69 78 8076 960

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Germany

London +44 (0)20 3077 5700

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United Kingdom

New York +1 646 653 7026

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10017, New York

US

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

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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discoverIE Group — Strong finish to FY18

discoverIE saw continued strong trading in Q418 and expects to report revenue growth of 15% for FY18 and earnings in line with management expectations. Design & Manufacturing (D&M) delivered further strong organic growth in the final quarter, and the group has a strong order book entering FY19, bolstered by the recent Stanton acquisition. The company is making good progress in its strategy to build the D&M side of the business and we continue to expect further acquisitions in this space.

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