Record — Changes taking effect

Record (LSE: REC)

Currency in GBP

Last close As at 03/02/2023

GBP0.96

−0.10 (−0.10%)

Market capitalisation

GBP191m

Research: Financials

Record — Changes taking effect

Record sees itself at the beginning of a new stage as it develops its capabilities as an asset manager rather than purely a supplier of specialist currency overlay services. The progress so far is good with the FY22 results beginning to show the benefits of diversification and the introduction of new, higher fee-margin products. More of these are in development and investment in systems and staff should underpin operational gearing if the group succeeds in its aim of reaching FY25 revenue of over £60m.

Andrew Mitchell

Written by

Andrew Mitchell

Director, Financials

Financials

Record

Changes taking effect

FY22 results

Financial services

11 July 2022

Price

67p

Market cap

£133m

Net cash and money market instruments (£m) at end-March 2022

17.3

Shares in issue

199.1m

Free float

53%

Code

REC

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(0.9)

(1.5)

(30.2)

Rel (local)

4.9

5.9

(29.2)

52-week high/low

97p

61p

Business description

Record is a specialist independent asset, 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

Q123 trading update

22 July 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 sees itself at the beginning of a new stage as it develops its capabilities as an asset manager rather than purely a supplier of specialist currency overlay services. The progress so far is good with the FY22 results beginning to show the benefits of diversification and the introduction of new, higher fee-margin products. More of these are in development and investment in systems and staff should underpin operational gearing if the group succeeds in its aim of reaching FY25 revenue of over £60m.

Year end

Revenue (£m)

PBT
(£m)

EPS*
(p)

DPS**
(p)

P/E
(x)

Yield
(%)

03/21

25.4

6.2

2.73

2.30

24.6

3.4

03/22

35.1

10.9

4.37

3.60

15.3

5.4

03/23e

41.3

13.1

5.30

4.40

12.7

6.6

03/24e

45.1

14.4

5.39

4.55

12.4

6.8

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

FY22 results: Strong progress in line with expectation

Record’s March year-end assets under management equivalent (AUME) of $83.1bn were up 3.7% during FY22. This mainly reflected net inflows ($2.4bn). We calculate that average AUME in sterling terms increased by 17.4% for FY22 compared with FY21. Reflecting flows into higher fee-margin products and helped modestly by performance fee income of £0.5m, FY22 revenue increased by 38% to £35.1m. Continued investment in new products to diversify further, to modernise IT systems and to develop and retain staff contributed to a 25% increase in operating costs. This still allowed an increase in the operating margin from 24% to 31% and a 76% increase in pre-tax profit to £10.9m. Diluted EPS rose from 2.73p to 4.37p. This in turn supported a rise in the ordinary dividend from 2.3p to 3.6p while a special dividend of 0.92p took the total dividend for the year to 4.52p versus 2.75p.

Background and outlook

Record acknowledges the current difficult macroeconomic and geopolitical background for markets but sees the progress it is making on its strategy to diversify, modernise and move to become a specialist alternative asset manager as creating an exciting outlook for the group. To make this more tangible, it has stated its aspiration to achieve revenue of over £60m in FY25, reflecting the realistic potential it sees in existing products and those in development. Subject to inflation and other developments, the group sees scope to reach an operating margin of 40% in the same year.

Valuation

Our FY23 earnings estimate is increased by 11% mainly as a result of updated sterling/US dollar rate and fee-margin assumptions. We have also introduced an FY24 forecast. P/E and EV/EBITDA multiples are above the UK asset manager peer average (see Exhibit 5), but delivery of revenue of £60m in FY25 would sharply reduce the prospective multiple and in the meantime the yield is attractive at 6.7% including the special dividend.

Record in numbers

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

We highlight several points:

Hedging services in total account for 88% of AUME and 64% of management fees, reflecting the lower fees that apply to passive hedging. The growth in dynamic hedging and currency for return since FY19 has reduced the proportion of management fees accounted for by passive hedging from 52% to 35% in FY22.

Since 2017 AUME has increased from $58.2bn to $83.1bn in FY22 (compound annual growth of 7.4% in AUME). The average fee rate rose slightly over the period, from 5.2bp to 5.6bp.

The longevity of clients: measured by AUME, 60% have been in place for over six years. However, with the renewed focus on growth over the past two years there is a healthy inflow of new clients, which often start with a relatively low AUME level: by number, 40% of clients have joined Record within three years.

Geographically, the United States accounts for 37% of revenue followed by Switzerland (31%).

We estimate 56% of hedging mandate fees relate to underlying equity assets, 17% to fixed income and 27% to other assets.

Exhibit 1: Record profile in numbers (FY22 except where indicated)

Analysis by strategy

AUME (%)

Management fees (%)* FY19

FY22

Est. average fee rate (bp)**

Dynamic hedging

12.8

20.6

29.4

13.2

Passive hedging

75.6

52.0

34.5

2.5

Currency for return

6.0

8.0

16.2

15.5

Multi-product

5.4

19.4

19.9

18.3

Cash

0.2

N/A

N/A

0

Total

100.0

100.0

100.0

5.6

Value

$83.1bn

£22.3m

£34.1m

Client analysis

Concentration

% AUME

% fees

Longevity (years)

% Clients

% AUME

Top 10

52

73

0-1

13

5

Next 10

35

18

1–3

27

15

Balance

12

8

3–6

29

20

6–10

11

18

>10

20

42

100

100

100

100

Geographical analysis and AUME progression

By country

% revenue

By invoice currency

% revenue

AUME progression

($bn)

US

37

US dollar

50

2017

58.2

Switzerland

31

Swiss franc

28

2018

62.2

Europe (rest)

20

Euro

10

2019

57.3

UK

8

Sterling

7

2020

58.6

Other

4

Other

4

2021

80.1

100

100

2022

83.1

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

Dynamic

Passive

Estimated % of hedging fees

Equity

91

30

58

Fixed income

0

34

18

Other

9

37

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.

FY22 results analysis

AUME and management fees

As announced in the April Q422 trading update, Record’s AUME increased by $3bn in FY22 (+3.7% and 8.6% in sterling terms). As shown in Exhibit 2, this mainly reflected net AUME inflows ($2.4bn), with positive underlying market moves since March 2021 and exchange rate and scaling moves adding $0.6bn.

Using reported quarter-end figures we calculate that average AUME for the group increased by 22% and 17% in dollar and sterling terms, respectively. The average level of AUME in FY22 benefited from the full inclusion of a large dynamic hedging mandate announced in September 2020 that was included in the $6.6bn inflow seen in that segment in FY21.

Exhibit 2: AUME movements and management fees

Year end March

AUME movements ($bn)

End period AUME ($bn)

Average AUME (£bn)

Management fees (£000)

FY21

FY22

FY21

FY22

% change

FY21

FY22

% change

FY21

FY22

% change

Net inflow

Dynamic hedging

6.6

1.4

9.3

10.6

14.0

3.8

7.6

99.1

5,623

10,020

78.2

Passive hedging

2.1

1.1

61.5

62.8

2.1

42.7

46.3

8.5

11,377

11,768

3.4

Currency for return

0.0

0.4

3.9

5

28.2

2.6

3.5

38.9

2,005

5,513

175.0

Multi-product

1.0

(0.5)

5.2

4.5

-13.5

3.0

3.7

23.6

5,873

6,782

15.5

Cash and futures

0.0

0.0

0.2

0.2

0.0

0.2

0.1

(4.2)

Total

9.7

2.4

80.1

83.1

3.7

52.2

61.3

17.4

24,878

34,083

37.0

Markets

8.4

0.3

FX and scaling

3.4

0.3

Total change

21.5

3.0

Opening AUME

58.6

80.1

Closing AUME

80.1

83.1

Source: Record, Edison Investment Research

Key points from the income statement

The profit and loss (P&L) account for FY22 is set out in Exhibit 3. We comment on key areas below, with comparisons versus FY21 unless stated.

Management fees increased by 37% reflecting the 17% higher average AUME (in sterling terms), and a higher fee-rate mix. Of the £9.2m absolute increase in management fees, the largest changes were in dynamic hedging and currency for return. The £4.4m increase in dynamic hedging fees resulted from full-year inclusion of the 2020 mandate win mentioned above together with a $1.4bn inflow in FY22. Currency for return fees increased by £3.5m benefiting from the launch of the Record Emerging Market (EM) Sustainable Finance Fund during the year (a $1.2bn inflow and, we estimate, a fee rate similar to comparable actively managed fixed income funds at 50–60bp).

Fee rates, on a like-for-like basis, have been reported to be broadly stable during the year, but changes in the mix of AUME meant the group average increased from 4.8bp to 5.6bp. Notable contributors were the increase in average dynamic hedging AUME (the large mandate taken on in FY21 diluted the fee rate in the category but contributed to the increase in the group average rate) and the Record EM Sustainable Finance Fund within currency for return (where we calculate the average fee rate rose from 7.9bp to 15.5bp).

Total revenue rose 38% with a £0.5m performance fee earned (£0.1m) as increased interest rate differentials in the market created better opportunities for enhanced passive hedging mandates to add value.

Administrative expenses increased by 25%, within which personnel costs before the group profit share (GPS) increased by 5%, with the average number of employees at 82 versus 83. The GPS increased by 78%, reflecting the rise in operating profit. As a percentage of pre-GPS operating profit (34%) the payment was towards 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 23%. Non-personnel costs rose 33% to £7.2m including costs related to the modernisation of IT systems, increased data costs that have accompanied this and the introduction of new products and the cost of office space in London. Ongoing costs related to new systems and continuing investment to support client service and product innovation are expected to remain a feature of the group P&L.

With the full benefit of FY21 inflows and further inflows in FY22, revenue growth outpaced cost increases and pre-tax profit increased by 76%. A higher effective tax rate of 20% (capital spending and research allowances together with deferred tax movements lowered the prior year rate to 13%) meant the increase in diluted EPS was 60%.

The ordinary dividend for FY22 is increased from 2.3p to 3.6p representing a payout of 80% of basic earnings per share. The group now targets an ordinary dividend payout in the range of 70–90% of annual earnings allowing for sustainable growth. Subject to market conditions, the board still intends to pay out earnings in excess of ordinary dividends, taking into account capital requirements (including regulatory requirements and a buffer for operating expenses, working capital and investment expectations). Such payments would usually be in the form of a special dividend and for FY22 the payment is 0.92p (versus 0.45p) giving a total dividend of 4.52p (+64.4%) and a 100% payout of basic earnings per share.

Exhibit 3: FY22 P&L analysis

£000s

FY19

FY20

FY21

FY22

% change vs FY21

Dynamic hedging

4,598

3,995

5,623

10,020

78.2

Passive hedging

11,610

12,026

11,377

11,768

3.4

Currency for return

1,775

1,982

2,005

5,513

175.0

Multi-product

4,325

5,130

5,873

6,782

15.5

Management fees

22,308

23,133

24,878

34,083

37.0

Performance fees

2,333

1,819

81

499

516.0

Other investment services income

332

611

453

570

25.8

Total revenue

24,973

25,563

25,412

35,152

38.3

Cost of sales

(385)

(255)

(399)

(219)

(45.1)

Gross profit

24,588

25,308

25,013

34,933

39.7

Administrative expenses

(16,704)

(17,741)

(18,934)

(23,726)

25.3

Other income/expense

(8)

82

41

(372)

N/A

Operating profit

7,876

7,649

6,120

10,835

77.0

Net finance income

113

88

33

21

(36.4)

Profit before tax

7,989

7,737

6,153

10,856

76.4

Taxation

(1,559)

(1,365)

(802)

(2,225)

177.4

Profit after tax

6,430

6,372

5,351

8,631

61.3

Diluted EPS (p)

3.25

3.26

2.73

4.37

60.4

DPS (p)

2.99

2.71

2.75

4.52

64.4

Tax rate

20%

18%

13%

20%

Source: Record, Edison Investment Research

On product investment performance, Record reports that central bank tightening and increased interest rate volatility has enabled the enhanced passive hedging product to add value; over FY22 a representative account recorded a positive return of 13bp relative to a fixed-tenor benchmark and since inception there was a positive return of 9bp per year. For comparison, the average fee rate in passive hedging is under 3bp. Episodic strength in the US dollar created the conditions for dynamic hedging to add value for US investors. For a representative account the value added in FY22 was 60bp and the since-inception return was +46bp per year.

Within currency for return products, the Record EM Sustainable Finance Fund (US dollar share class) had a negative return since inception (28 June 2021, -0.94%) but significantly outperformed relevant indices such as the JP Morgan GBI-EM Global Diversified Index (-12.07%). Finally, the multi-strategy product generated a positive return of 0.58% and a since-inception return of 0.83%, with volatility of 3.08% per year.

Strategy and three-year plan

Group management make clear it is very pleased with the progress of the strategy adopted following the appointment of Leslie Hill as chief executive two years ago. The three strands – diversification, modernisation and succession – are all advancing and starting to bear fruit as evidenced within the FY22 results and commentary.

On diversification, the launch of the Record EM Sustainable Fund and a new Luxembourg-based municipal bond fund are illustrations of the group’s new emphasis of meeting clients’ needs and working in partnerships (with UBS Global Wealth Management for the former and Universal Investment and VTeam for the latter). This approach helps to gain early traction with investors, reduces launch costs and brings in third-party expertise to broaden Record’s potential reach while still earning higher fee-margins as an asset manager than in its traditional overlay hedging products. Looking ahead, the group has devoted considerable effort to develop its capabilities in sustainable investment and is working on further impact and sustainable investment initiatives. Products involving supply-chain finance, syndicated loans and Sharia compliant finance are in the pipeline. Recent approval of the application for a licence from BaFin for the German subsidiary will facilitate development of a European asset management business, as will creating a suite of Luxembourg funds allowing Record to offer more to its partners and clients.

Modernisation of IT systems is enabling more effective delivery of Record’s established areas of expertise in currency and derivatives and should contribute to scalability and operational gearing as the group moves towards its three-year FY25 targets. As noted earlier, IT development and hence spending are expected to remain a feature at the group.

Succession. Development and retention of younger members of the team to take over management responsibility in due course has been a prominent theme. This has included promotions and hence financial reward, but also changes such as the opening of a London office, continuation of flexible working, mentoring programmes, development of sustainability capabilities and diversity and inclusion policies. Staff retention fell markedly in FY22 at 74% compared with 90% in FY21. However, this was a sign of the evolution taking place in the group with the need to change some management groups in line with the modernisation of systems and client-led approach to product development. This has been carefully managed and some senior staff have now taken alternative or advisory roles, retaining their expertise within the group.

To make clear the board’s confidence in the outlook for the group and the growth potential it sees, a three-year plan with a revenue target of over £60m in FY25 has been set out. While the detail behind this aspiration has not been given, it reflects a bottom-up assessment of potential for growth in each product area with the promising development of new, higher fee-margin products a key element of the expected growth. In addition to the revenue target, Record sees an operating margin of 40% as being achievable in FY25 (subject to the effects of inflation) as higher AUME brings into play the scalability of the modernised systems now in place.

Outlook, estimate changes and financial position

The macroeconomic and geopolitical background for equity and fixed-income markets is challenging and this is likely to have some effect on the progress Record makes over its three-year plan and our forecast period to end-FY24. However, the development of new products and the diversity of clients’ underlying assets provide some mitigation.

Exhibit 4 sets out the headline differences between estimate and outcome for FY22, changes in our FY23 estimate and our newly introduced FY24 estimate. For FY22 the outcome was close to expectation. For FY23, full inclusion of the Record EM Sustainable Finance Fund introduced in Q222 is a contributor to growth. In this case it seems reasonable to allow for further net allocations to the fund and, as previously, we have assumed $0.4bn (and the same for FY24). Similarly, we assume a $1bn inflow into the municipal bond fund in each year although the revenue effects of this are lower given the expected fee rate of c 13bp. These assumptions are indicative with risks in both directions. The changes for FY23 compared with our old forecast arise primarily from updated sterling/US dollar rate and fee-margin assumptions. As usual, our estimates do not include any assumed performance fees so any that are crystallised would represent upside from our figures.

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/a

35.2

35.2

0

11.0

10.9

(2)

4.40

4.37

(1)

3.80

3.60

(5)

03/23e

39.3

41.3

5

11.6

13.1

13

4.77

5.30

11

4.40

4.40

0

03/24e

45.1

14.4

5.39

4.55

Source: Edison Investment Research. Notes: *Dividend excludes any special payment. For FY22 Old = our estimate and New = reported.

Our dividend estimate shown above excludes special dividends. Based on our FY23 and FY24 basic earnings estimates and assuming a near 100% payout, we pencil in special payments of 1.05p and 1.1p respectively, giving total dividends of 5.45p and 5.65p.

The group figure for net cash and money market instruments managed as cash at the year-end was £17.3m (a comparable own cash figure for FY21 was £16.2m after stripping out the non-controlling interest share of cash held by seed funds). Summarising the cash flows, net operating cash generation was £11.4m while dividends absorbed £6.5m and share buybacks £4.5m: investing activities and other movements added £0.7m giving the £1.1m increase in own cash.

The group capital position remains strong. At the end of FY22 Record had regulatory capital resources of £25.3m compared with a regulatory capital requirement of £5.4m (FY21 £9.4m). The introduction of new products may increase the capital requirement, but the capital position is seen as well able to support the growth envisaged in the three-year plan.

Finally, while we have yet to include a forecast for FY25, it is interesting to consider a scenario that could generate the over £60m revenue and 40% operating margin the group seeks. For this illustration we have excluded any contribution from performance fees. Starting with AUME, we envisage most of the growth required falling within the multi-product category but also allow for additional inflows in currency for return and dynamic hedging. Our scenario assumes average AUME of just over $94bn compared with existing estimates of $85.7bn and $88.5bn for FY23 and FY24, respectively. We allow for a marked increase in multi-product fee rate at 28bp (compared with 18.4bp assumed for FY24, for example) and a smaller increase for currency for return both reflecting the effects of new higher margin products, with fee rates potentially ranging between 20bp and 50bp. The overall group average fee rate is assumed to rise to 7.8bp (compared with 5.9bp and 6.2bp respectively in our FY23 and FY24 estimates). This gives revenue just above £60m. On costs we allow for an 18% increase in total operating expenses compared with our FY24 estimate, reflecting mainly an increase in group profit share but still generating considerable operating leverage and matching the target 40% operating margin. This would give pre-tax profit of c £24m and diluted EPS of just over 9p.

Valuation comparison

Exhibit 5 shows an updated version of our comparative valuation table, with a selection of quoted UK fund managers. Year-to-date, the comparator asset managers share prices are down 32% on average, while Record shares are 18% lower, potentially a reflection of its lower sensitivity to equity market volatility and the growth it is demonstrating. It trades at a premium to the average calendarised P/E and EV/EBITDA multiples for the comparators, although delivery of growth in line with the group’s three-year plan would bring the final year multiple down to c 7.5x. On our estimates, Record’s prospective yield (including special dividend) would be 8.1% for FY23 and 8.4% for FY24.

Exhibit 5: Comparing valuation with UK fund managers

Price
(p)

Market cap

(£m)

P/E

2022e (x)

EV/EBITDA 2022e (x)

Dividend yield (%)

Ashmore

212

1,508

10.9

4.3

8.0

City of London Investment Group

425

215

8.8

N/A

7.8

Impax Asset Management

578

766

15.3

10.3

3.6

Jupiter

142

788

9.7

3.4

12.0

Liontrust

922

599

8.4

5.0

7.8

Man Group

250

3,956

8.9

6.1

4.9

Polar Capital

476

480

10.7

4.6

9.7

Schroders

2,730

7,467

13.0

8.4

4.5

Average

10.7

6.0

7.3

Record

67.00

127

13.2

9.3

5.4

Source: Refinitiv, Edison Investment Research. Note: P/E and EV/EBITDA on a calendar-year basis. Record’s (FY22) dividend yield excludes the special dividend. Priced at 8 July 2022.

Exhibit 6: Financial summary

Year end 31 March

£000s 

 

2019

2020

2021

2022

2023e

2024e

PROFIT & LOSS

 

 

 

 

 

 

 

 

Revenue

 

 

24,973

25,563

25,412

35,152

41,268

45,110

Operating expenses

 

 

(17,089)

(17,996)

(19,333)

(23,945)

(28,136)

(30,692)

Other income/(expense)

 

 

(8)

82

41

(372)

(40)

(40)

Operating Profit (before amort. and except.)

 

 

7,876

7,649

6,120

10,835

13,092

14,378

Finance income

 

 

113

88

33

21

34

51

Profit Before Tax

 

 

7,989

7,737

6,153

10,856

13,126

14,429

Taxation

(1,559)

(1,365)

(802)

(2,225)

(2,494)

(3,607)

Minority interests

 

 

0

48

0

0

0

0

Attributable profit

 

 

6,430

6,420

5,351

8,631

10,632

10,821

 

 

 

 

 

 

 

 

 

Revenue/AUME (excl. perf fees) bps

 

 

4.9

4.9

4.8

5.6

5.8

6.2

Operating margin (%)

 

 

31.5

29.9

24.1

30.8

31.7

31.9

 

 

 

 

 

 

 

 

 

Average Number of Shares Outstanding (m)

 

 

198.1

197.1

196.2

197.3

200.8

200.8

Basic EPS (p)

 

 

3.27

3.26

2.75

4.52

5.61

5.71

EPS - diluted (p)

 

 

3.25

3.26

2.73

4.37

5.30

5.39

Dividend per share (p)

 

 

2.30

2.30

2.30

3.60

4.40

4.55

Special dividend per share (p)

 

 

0.69

0.41

0.45

0.92

1.05

1.10

Total dividend (p)

 

 

2.99

2.71

2.75

4.52

5.45

5.65

 

 

 

 

 

 

 

 

 

BALANCE SHEET

 

 

 

 

 

 

 

 

Non-current assets

 

 

2,161

4,868

5,153

6,084

5,366

4,648

Intangible Assets

 

 

288

470

420

562

512

462

Tangible Assets

 

 

761

751

683

401

221

41

Investments

 

 

1,112

2,472

3,046

3,447

3,447

3,447

Other

 

 

0

1,175

1,004

1,674

1,186

698

Current Assets

 

 

31,427

31,149

28,045

27,141

27,847

27,852

Debtors

 

 

7,562

8,704

8,006

9,883

11,217

12,062

Cash

 

 

12,966

14,294

6,847

3,345

2,717

1,877

Money market instruments

 

 

10,735

7,958

12,932

13,913

13,913

13,913

Other

 

 

164

193

260

0

0

0

Current liabilities

 

 

(6,158)

(6,955)

(5,992)

(6,210)

(6,359)

(6,275)

Creditors

 

 

(2,736)

(3,009)

(3,426)

(4,721)

(5,358)

(5,762)

Financial liabilities

 

 

(2,621)

(2,191)

(1,696)

0

0

0

Other

 

 

(801)

(1,755)

(870)

(1,489)

(1,001)

(513)

Non-current liabilities

 

 

(29)

(901)

(407)

(1,085)

(1,085)

(1,085)

 

 

 

 

 

 

 

 

 

Net Assets

 

 

27,401

28,161

26,799

25,930

25,769

25,140

Minority interests

 

 

60

132

0

0

0

0

Net assets attributable to ordinary shareholders

 

 

27,341

28,029

26,799

25,930

25,769

25,140

 

 

 

 

 

 

 

 

 

No of shares at year end

 

 

199.1

199.1

199.1

199.1

199.1

199.1

NAV per share p

 

 

13.7

14.1

13.5

13.0

12.9

12.6

 

 

 

 

 

 

 

 

 

CASH FLOW

 

 

 

 

 

 

 

 

Operating Cash Flow

 

 

7,026

6,543

6,798

11,355

10,939

11,367

Capex

 

 

(72)

(243)

(230)

(75)

(170)

(170)

Cash flow from other investing activities

 

 

(561)

1,513

(6,210)

(3,392)

(116)

(99)

Dividends

 

 

(5,517)

(5,888)

(5,290)

(6,512)

(9,793)

(10,450)

Other financing activities

 

 

(613)

(943)

(2,368)

(5,019)

(1,488)

(1,488)

Other

 

 

205

346

(147)

141

0

0

Net Cash Flow

 

 

468

1,328

(7,447)

(3,502)

(628)

(840)

Opening cash/(net debt)

 

 

12,498

12,966

14,294

6,847

3,345

2,717

Closing net (debt)/cash

 

 

12,966

14,294

6,847

3,345

2,717

1,877

Closing net (debt)/cash inc money market instruments

 

23,701

22,252

19,779

17,258

16,630

15,790

 

 

 

 

 

 

 

 

 

AUME ($bn)

 

 

 

 

 

 

 

 

Opening

 

 

62.2

57.3

58.6

80.1

83.1

87.4

Net new money flows

 

 

(4.5)

4.6

9.7

2.4

3.4

1.4

Market/other

 

 

(0.4)

(3.3)

11.8

0.6

0.9

0.9

Closing

 

 

57.3

58.6

80.1

83.1

87.4

89.7

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.

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Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

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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

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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.

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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 2022 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

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