REG - Record PLC - Interim Results
15/11/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241115:nRSO3418Ma&default-theme=true
RNS Number : 3418M Record PLC 15 November 2024
RECORD PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
Continued AUM growth and launch of €1bn Infrastructure Equity Fund
Record plc ("Record" or "the Company"), the specialist currency and asset
manager, today announces its unaudited results for the six months ended 30
September 2024 ("H1 FY25").
Financial headlines:
· Continued AUM growth and launch of €1bn Infrastructure Equity
Fund
· 4% growth in Assets Under Management ("AUM") during the period to
a new high of $106.0bn (H1 FY24: $84.5bn, H2 FY24: $102.2bn)
· Revenue down 2% to £21.1m (H1 FY24: £21.5m) in line with
expectations following a restructuring of a large client mandate
· Profit after tax attributable to Record plc shareholders of
£5.0m up 5% (H1 FY24: £4.7m)
· Basic EPS attributable to Record shareholders up 4% to 2.58 pence
(H1 FY24: 2.48 pence)
· Interim dividend maintained at 2.15 pence per share (H1 FY24:
2.15 pence per share)
· Strong financial position with net cash of £14.3m (H1 FY24:
£14.8m) and shareholders' equity of £27.7m (H1 FY24: £28.5m)
Key developments:
· Launch of Infrastructure Equity Fund with over €1.1bn in long
term commitments to be deployed over the next 3 years
· Currency Management resilient with AUM and management fee growth,
and performance fees of £1.6m (H1 FY24: £1.5m)
· Expanded the team at Record Asset Management bringing a track
record of origination and structuring
· Hiring of in-house IT team completed with clear development
roadmap
Commenting on the results, Jan Witte, Chief Executive Officer of Record plc,
said:
During my first 6 months as CEO of Record, the business has again demonstrated
the strength of its unique product offering, growing AUM to a new record of
$106.0bn. We have continued to focus on delivering best-in-class solutions to
clients in our six core product areas, and we are seeing increased demand for
our Hedging for Asset Managers and FX Alpha products in particular. I am
especially delighted to announce the launch of our Infrastructure Equity Fund.
This is an important milestone in the growth of our Asset Management offering,
which will deliver sustainable long-term revenues and where we continue to
develop our pipeline.
We have also made important investments during the period. We have expanded
our Asset Management team with new hires bringing origination and structuring
experience. We have rolled out a new technology roadmap under new IT
leadership; and we have signed the lease on an exciting new office space
providing a fantastic, modern workplace for our people and our clients.
Trading for the full year remains in line with the Board's expectations.
Analyst presentation
There will be a presentation for analysts at 9.30am today held via a Zoom
call. Please contact Elliot Hance at h2Radnor via ehance@h2radnor.com for
further details. A recording of the presentation will be made available on the
Group's website at www.recordfg.com.
For further information, please contact:
Record
plc
+44 (0) 1753 852 222
Jan Witte - Chief Executive Officer
Richard Heading - Chief Financial Officer
h2Radnor
+44 (0) 2038
971 830
Elliot Hance
Panmure Liberum
+44 (0) 2078 862 500
Corporate Broking: David Watkins
Corporate Advisory: Atholl Tweedie
Chief Executive Officer's statement
Strategic progress
I'm pleased to report the results for the first half of FY25, my first full
six months as CEO of Record. Our renewed focus on our core suite of products
has delivered progress towards each of our strategic objectives: organic
growth, quality of earnings, and operational excellence.
Record's market position remains strong, with total AUM reaching a new high of
$106.0 billion at the end of the period. This is a 4% increase from the FY24
year-end, and a 25% increase ($21.5 billion) over the past 12 months. Our
flexibility and expertise in structuring unique solutions allows us to respond
to ever-changing markets and client demands, and creates a solid foundation
for sustained organic growth.
The first half of FY25 brought challenging conditions from the perspective of
an FX manager due to reduced divergence in monetary policy globally.
Additional geopolitical uncertainty, particularly surrounding tensions in the
Middle East and numerous elections worldwide, has provided a headwind in
emerging markets.
Against this backdrop, Currency Management AUM increased by a further 6% since
H2 FY24 to $103.5 billion, and we are seeing increased demand for our Hedging
for Asset Managers and FX Alpha products in particular. We onboarded a large
new FX Alpha relationship during H1 FY25, and there is a solid pipeline of
opportunities we expect to develop over the second half of FY25. Hedging for
Asset Managers continues to see growth from both new client wins as well as
the expansion of existing relationships as clients launch new funds supported
by our services.
We are building a team and track record of delivery that will allow us to
continue to grow our Asset Management business, offering solutions and
products that complement our core Currency Management business. Overall AUM in
Asset Management fell during the period, however the Custom Solutions product
category is now comprised almost entirely of our fund solutions, all of which
are long-term, and where we are better positioned for future growth.
People
During the period we have expanded our Asset Management team, adding expertise
in deal origination and structuring as well as building the operational
support needed to support growth. Under new technology leadership, we have
also completed the hiring of an in-house development team.
We aim to hire exceptional people throughout our business and provide
opportunities for our talented colleagues to maximise their potential, by
providing support in the form of internal and external coaching, and learning
and personal development, such as by studying for professional qualifications.
We have also recently signed the lease for our new London office. This is an
important investment to ensure we continue to attract and retain the best
talent and provide a modern, state of the art working environment to promote
collaboration and operational excellence. It will also be a fantastic space
into which to welcome clients.
Operational excellence
At the end of FY24 we took the important decision to bring our IT
infrastructure and development teams in-house. During the period we have
rolled out our new strategic IT development plan with a clear roadmap that
aligns our technology investment with our operational priorities. That has
been achieved at a cost run rate slightly below the second half of last year.
Private Infrastructure
Following the successful launches of our GP Stakes and Protected Equities
funds last year, I am excited to announce the launch of our much-anticipated
Infrastructure Equity Fund with initial commitments totalling approximately
€1.1 billion. This Luxembourg-based fund offers investors access to stable,
inflation-adjusted returns, while providing diversification across sectors
such as renewable energy, data infrastructure, transport, and network
utilities.
The fund will primarily invest in minority equity stakes of infrastructure
assets worldwide, with a particular emphasis on brownfield assets, which are
existing infrastructure projects that require renovation or improvement. The
fund seeks to identify high-potential opportunities and deliver returns that
outperform traditional bonds over a multi-year horizon.
Outlook
We currently see an elevated degree of political and economic uncertainty
which we expect to persist for some time and to include periods of currency
volatility. These are conditions in which we expect to see increased client
demand for our risk management services and may present good opportunities for
return generating strategies.
The commitments to the Infrastructure Equity Fund will be deployed over the
next 3 years, with the first investments expected towards the end of FY25.
Record will earn management fees on deployed funds at the upper end of the
range of what we have historically earned on Custom Solutions mandates, and
the minimum holding period of each investment is expected to be 15 years.
Our expectations for the full year FY25 are unchanged. We expect the H1 FY25
run rate of management fees and expenses to continue through H2 FY25. We will
provide updated guidance on our medium-term growth plans when we announce our
full year results.
Jan Witte
Chief Executive Officer
14 November 2024
Interim management review
AUM development
AUM composition by product and movement analysis
30 Sep 2023 Net flows Equity & other market impact FX & scaling adj. 31 Mar 2024 Net flows Equity & other market impact FX & scaling adj. 30 Sep 2024
$bn $bn $bn $bn $bn $bn $bn $bn $bn
Currency Management
Passive Hedging 51.2 8.9 5.3 0.6 66.0 (1.5) (0.4) 4.2 68.3
Active Hedging 14.5 - 2.0 - 16.5 (0.7) 1.0 - 16.8
Hedging for Asset Managers 9.3 1.1 (0.1) 0.1 10.4 1.5 - 0.4 12.3
FX Alpha 3.0 0.1 1.4 - 4.5 0.7 0.5 0.3 6.0
Cash 0.1 - - - 0.1 - - - 0.1
Total Currency Management AUM 78.1 10.1 8.6 0.7 97.5 - 1.1 4.9 103.5
Asset Management
Custom Solutions 5.5 (2.3) 0.1 0.4 3.7 (2.3) - - 1.4
EM Debt 0.9 - 0.1 - 1.0 0.1 - - 1.1
Total Asset Management AUM 6.4 (2.3) 0.2 0.4 4.7 (2.2) - - 2.5
Total AUM 84.5 7.8 8.8 1.1 102.2 (2.2) 1.1 4.9 106.0
AUM finished the period at $106.0 billion, up $3.8 billion since the start of
the period, an increase of 4% (FY24: $102.2 billion).
Record's AUM is affected by market movements because substantially all the
Passive and Active Hedging, and some of the mandates within Custom Solutions,
are linked to equity, fixed income and other market levels. Market movements
increased AUM by $1.1 billion in the period ended 30 September 2024.
Approximately 77% of the Group's AUM is non-US dollar denominated. Therefore,
foreign exchange movements have an impact on AUM when expressing non-US dollar
denominated AUM in US dollars. Foreign exchange movements increased AUM by
$4.9 billion in H1 FY25.
As at 30 September 2024, the split of AUM by base currency was 57% in Swiss
francs, 23% in US dollars, 8% in sterling, 8% in euros and 4% in other
currencies. Fees are earned in the base currency of the AUM.
Currency Management
Passive Hedging AUM increased to $68.3 billion driven by weakening of the US
dollar against the Swiss Franc, the underlying currency for many of our
passive hedging mandates. Excluding the impact of FX, Passive Hedging AUM
decreased by $1.9 billion from a combination of outflows and lower asset
values.
AUM movements in other products were driven primarily by flows. Active Hedging
AUM increased to $16.8 billion, a 2% increase with net outflows more than
offset by positive market movements. Hedging for Asset Managers AUM increased
by 18% over the period reflecting strong client wins and increased allocations
from existing clients. FX Alpha products also saw strong client inflows of
$0.7 billion, which, combined with further AUM increases from net FX and
market movements, increased FX Alpha AUM by 33% to $6.0 billion.
Asset Management
The composition of Custom Solutions saw a change after the end of FY24, with
the previously announced switch of one client mandate from Custom Solutions to
a traditional passive allocation. The combination of this change and the
discontinuation of a tactical interest rate swap portfolio during the period
is the predominant driver behind the $2.3 billion AUM outflow from Custom
Solutions in H1 FY25. Following those changes, the Custom Solutions product
category is now comprised almost entirely of our fund solutions, all of which
are long-term allocations.
Interest in the EM Debt space remains strong, resulting in $0.2 billion in AUM
inflows since H1 FY24. Additionally, the recent launch of our Infrastructure
Equity Fund, which has already secured initial commitments exceeding €1
billion, positions us well for the future.
Financial Review
Six months ended Six months ended
30 September 2024 30 September 2023 Change
£m £m %
Revenue 21.1 21.5 (2%)
Cost of sales (0.2) (0.1) 100%
Gross profit 20.9 21.4 (2%)
Administrative expenditure (15.4) (15.0) 2%
Other income/(expense) 0.1 (0.3) N/A
Operating profit 5.6 6.1 (8%)
Headline revenue of £21.1 million, including performance fees, represents a
small decrease of 2% from H1 FY24 (£21.5 million). Excluding performance
fees, underlying management fees decreased by 3% versus H1 FY24, but are
broadly flat compared to H2 FY24.
Administrative expenses were £0.4 million higher than H1 FY24 at £15.4
million. However, they were £0.3 million lower than H2 FY24 as we have
managed our cost base in line with management fees, while still making
important investments in operations, technology and our Asset Management team.
The result is an operating margin of 27% and pre-tax profit of £5.9 million.
Against a challenging backdrop for management fees and having made some
important investments for the future, this is a satisfactory result and leaves
us well positioned for profitable growth.
Revenue Analysis
Management fees from Currency Management products grew by £2.0 million, a 14%
increase on H1 FY24, in line with higher AUM. In addition, we earned
performance fees of £1.6 million, a slight increase on the prior year (H1
FY24: £1.5 million). Management fees from Asset Management products fell by
£2.6 million, reflecting the impact of the previously announced restructure
of a large client mandate from Custom Solutions to Passive Hedging.
Revenue by product
Six months ended Six months ended
30 September 2024 30 September 2023 Change
£m £m %
Management fees
Currency Management
Passive Hedging 5.8 4.3 33%
Active Hedging 7.1 7.0 1%
Hedging for Asset Managers 1.7 1.5 14%
FX Alpha 0.8 0.6 29%
Total Currency Management 15.4 13.4 14%
Asset Management
Custom Solutions 1.1 3.7 (70%)
EM Debt 2.5 2.5 3%
Total Asset Management 3.6 6.2 (41%)
Total management fees 19.0 19.6 (3%)
Performance fees 1.6 1.5 8%
Other services income 0.5 0.4 31%
Total revenue 21.1 21.5 (2%)
We continue to see opportunities for earning performance fees in some of our
Passive Hedging mandates, with £1.6 million earned in the period compared to
£1.5 million earned in H1 FY24. However, the exceptional performance fees of
£4.3 million earned in H2 FY24 are unlikely to be repeated in the second half
of this year.
Passive Hedging management fees for H1 FY25 were £5.8 million. This is £1.5
million higher than the equivalent period last year (H1 FY24: £4.3 million),
reflecting higher AUM.
Active Hedging management fees have increased by 1% compared to the same
period last year, reflecting the increase in the average AUM over the period
being partially offset by unfavourable exchange movements.
New client wins for Hedging for Asset Manager products saw management fees
increase by 14% to £1.7 million compared to the same period last year (H1
FY24: £1.5 million).
FX Alpha products saw good AUM inflows resulting in increased FX Alpha
management fees to £0.8 million. This is a £0.2 million increase compared to
the same period last year (H1 FY24: £0.6 million).
In Asset Management, the client mandate switch, announced last year, from
Custom Solutions to Passive Hedging in H2 FY24 is the predominant driver
behind the £2.6 million decrease in management fees to £1.1 million compared
to the same period last year (H1 FY24: £3.7 million) and a decrease of £1.5
million versus H2 FY24 (H2 FY24: £2.6 million). There will be a further,
reduced impact in H2 FY25.
Interest in the EM Debt space remains strong, resulting in $0.2 billion in AUM
inflows since H1 FY24. Management fees from the Emerging Markets Sustainable
Finance fund have remained constant at £2.5 million compared to the same
period last year (H1 FY24: £2.5 million).
Additionally, the recent launch of our Infrastructure Equity Fund, which has
already secured initial commitments exceeding €1 billion, positions us well
for a promising second half of the year.
Expenditure Analysis
Six months ended Six months ended
30 September 2024 30 September 2023 Change
£m £m %
Administrative expenditure
People costs (excl. Group Bonus) 7.4 7.1 4%
Overheads and other costs 5.6 5.3 6%
Administrative expenditure excl. Group Bonus 13.0 12.4 5%
Group Bonus Scheme 2.4 2.6 (8%)
Total administrative expenditure 15.4 15.0 2%
Other (income)/expense (0.1) 0.3 N/A
Total expenditure 15.3 15.3 -
Total administrative expenditure (excluding the Group Bonus Scheme) for H1
FY25 was £13.0 million, an increase of 5% on the equivalent prior year period
(H1 FY24: £12.4 million). However, this is a decrease of 6% versus the second
half of last year (H2 FY24: £13.9 million), reflecting the actions we have
taken to manage our cost base as we committed to do at the beginning of this
financial year.
People costs of £7.4 million (excluding Group Bonus Scheme) followed a
similar pattern, up 4% versus prior year (H1 FY24: £7.1 million) but 5% lower
compared to the second half of last year (H2 FY24: £7.8 million). We continue
to invest in the business in line with our plans for operational excellence
and in sourcing the right skill sets at the right level.
The increase in overheads and other costs is primarily linked to our overseas
expansion and growth, IT-related support and data costs, and professional
fees, as well as the expected effects of inflation. Total overheads and other
costs of £5.6 million for the period represent an increase of 6% over the
same period last year (H1 FY24: £5.3 million) and a decrease of 8% versus the
second half of FY24 (H2 FY24: £6.1 million), excluding the one-off impact of
the £1.9 million impairment recognised at the end of FY24.
Group Bonus Scheme
During the period, we have accrued £2.4 million for the Group bonus scheme, a
decrease of 8% (H1 FY24: £2.6 million), in line with the reduction in
operating profit.
Cashflow
The Group generated £5.6 million of cash from operating activities before tax
during the period (H1 FY24: £7.3 million). Taxation paid during the period
increased to £3.5 million compared to £1.3 million for the same period last
year, although this increase is primarily due to a change in the timing of the
Group's quarterly instalment payments.
The Group paid dividends totalling £5.9 million in the period (H1 FY24: £6.0
million), more information for which is given in note 6 to the condensed
financial statements.
Dividends and capital
The Board has declared an interim dividend of 2.15 pence per share in respect
of the six-month period to 30 September 2024 (H1 FY24: 2.15 pence). This will
equate to a distribution of approximately £4.2 million (H1 FY24: £4.1
million), following which the business will retain cash and money market
instruments on the balance sheet, which sufficiently cover financial resource
requirements required for operations and regulatory purposes. The Board
remains confident that our redesigned strategic focus on organic growth,
quality of earnings, and operational excellence is the right direction for the
Group and it remains the Board's intention to pay a progressive final
dividend.
The Group has no debt and is cash-generative with capital and dividend
policies aimed at ensuring continued balance sheet strength to support future
growth. Shareholders' funds were £27.7 million at 30 September 2024 (H1 FY24:
£28.5 million).
Principal risks and uncertainties
The principal risks currently facing the Group and those that we anticipate
the Group will be exposed to in the short term remain broadly the same as
those outlined in the 2024 Annual Report.
These risks are:
· Strategic - the top two strategic risks are concentration and
competitive threats, other notable strategic risks are delivery of strategy,
regulatory trends, product innovation, third-party products and exogenous;
· Operational and systems - primarily trade configuration and
execution, as well as cyber and data security risks;
· Investment risk - we naturally embrace the risk that our products
underperform, while market liquidity is a risk we continually review; and
· People - key person and succession, as well as talent acquisition
and retention.
Cautionary statement
This Interim Report contains certain forward-looking statements with respect
to the financial condition, results, operations and business of Record. These
statements involve risk and uncertainty because they relate to events and
depend upon circumstances that will occur in the future. There are a number of
factors that could cause actual results or developments to differ materially
from those expressed or implied in this Interim Report. Nothing in this
Interim Report should be construed as a profit forecast.
Statement of Directors' responsibilities
The interim financial report is the responsibility of the Directors, who
confirm that to the best of their knowledge:
· the condensed set of consolidated financial statements has been
prepared in accordance with UK-adopted IAS 34 - "Interim Financial Reporting";
and
· the Interim management review includes a fair review of the
information required by:
o DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of consolidated financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the year; and
o DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the Annual Report 2024 that could do so.
Related party transactions are disclosed in note 10.
The Directors of Record plc are listed on the Record plc website at:
https://recordfg.com/team-member-groups/record-plc-board/
David Morrison
Chairman
Richard Heading
Chief Financial Officer
14 November 2024
Independent review report to Record plc
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 September 2024 is not prepared,
in all material respects, in accordance with UK adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2024 which comprises the consolidated statement of comprehensive
income, the consolidated statement of financial position, the consolidated
statement of changes in equity, the consolidated statement of cash flows and
the notes to the financial statements, including a summary of significant
accounting policies.
Basis for conclusion
We conducted our review in accordance with Revised International Standard on
Review Engagements (UK) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410
(Revised)"). A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410 (Revised), however
future events or conditions may cause the Group to cease to continue as a
going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority. In preparing the half-yearly
financial report, the directors are responsible for assessing the company's
ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statements in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct Authority and for
no other purpose. No person is entitled to rely on this report unless such a
person is a person entitled to rely upon this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility
for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
BDO LLP
Chartered Accountants London, UK
14 November 2024
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
Consolidated statement of comprehensive income
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
Note £'000 £'000 £'000
Revenue 4 21,115 21,469 45,378
Cost of sales (176) (34) (82)
Gross profit 20,939 21,435 45,296
Administrative expenditure (15,379) (15,048) (30,746)
Other income/(expense) 60 (260) (15)
Operating profit prior to impairment of intangible assets 5,620 6,127 14,535
Impairment of intangible assets - - (1,937)
Operating profit 5,620 6,127 12,598
Finance income 294 153 394
Finance expense (5) (19) (81)
Profit before tax 5,909 6,261 12,911
Taxation (1,656) (1,535) (3,658)
Profit after tax 4,253 4,726 9,253
Foreign exchange gains on translation of foreign operations 77 - 13
Other reclassifiable comprehensive income 77 - 13
Total comprehensive income for the period net of tax 4,330 4,726 9,266
Profit for the period attributable to
Equity holders of the parent 4,964 4,726 9,258
Non-controlling interests 10 (711) - (5)
4,253 4,726 9,253
Other comprehensive income for the period attributable to
Equity holders of the parent 45 - 13
Non-controlling interests 10 32 - -
77 - 13
Total comprehensive income for the period attributable to
Equity holders of the parent 5,009 4,726 9,271
Non-controlling interests 10 (679) - (5)
4,330 4,726 9,266
Earnings per share for profit attributable to the equity holders of the parent
during the period
Basic earnings per share (pence per share) 5 2.58 2.48 4.84
Diluted earnings per share (pence per share) 5 2.53 2.44 4.78
The notes are an integral part of these condensed consolidated financial
statements.
Consolidated statement of financial position
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
Note £'000 £'000 £'000
Non-current assets
Intangible assets 125 1,643 11
Right-of-use assets 535 866 174
Property, plant and equipment 84 286 193
Investments 8 3,873 4,448 4,949
Deferred tax assets 346 178 168
Total non-current assets 4,963 7,421 5,495
Current assets
Trade and other receivables 13,653 13,097 13,022
Derivative financial assets 9 254 - 63
Money market instruments 7 4,407 - 8,264
Cash and cash equivalents 7 9,898 14,837 9,221
Total current assets 28,212 27,934 30,570
Total assets 33,175 35,355 36,065
Current liabilities
Trade and other payables (4,600) (4,628) (4,930)
Corporation tax liabilities (164) (1,127) (1,865)
Provisions - - (122)
Lease liabilities (218) (290) (106)
Derivative financial liabilities 9 (4) (178) (9)
Total current liabilities (4,986) (6,223) (7,032)
Non-current liabilities
Provisions (122) (122) -
Lease liabilities (324) (551) (79)
Total non-current liabilities (446) (673) (79)
Total net assets 27,743 28,459 28,954
Equity
Issued share capital 50 50 50
Share premium account 1,809 1,809 1,809
Capital redemption reserve 26 26 26
Foreign currency translation reserve 58 - 13
Retained earnings 26,455 26,574 27,051
Equity attributable to the equity holders of the parent 28,398 28,459 28,949
Non-controlling interests 10 (655) - 5
Total equity 27,743 28,459 28,954
The notes are an integral part of these condensed consolidated financial
statements.
Approved by the Board on 14 November 2024 and signed on its behalf by:
David Morrison
Chairman
Richard Heading
Chief Financial Officer
Consolidated statement of changes in equity
Called-up share capital Share premium account Capital redemption reserve Foreign currency translation reserve Retained earnings Equity attributable to owners of the parent Non-controlling interests Total
equity
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 April 2023 50 1,809 26 - 26,406 28,291 - 28,291
Total comprehensive income for the period net of tax - - - - 4,726 4,726 - 4,726
Dividends paid - - - - (5,978) (5,978) - (5,978)
Own shares acquired by EBT - - - - (1,018) (1,018) - (1,018)
Release of shares held by EBT - - - - 1,987 1,987 - 1,987
Tax on share-based payments - - - - 317 317 - 317
Other share-based payment reserve movements - - - - 134 134 - 134
Transactions with shareholders - - - - (4,558) (4,558) - (4,558)
As at 30 September 2023 50 1,809 26 - 26,574 28,459 - 28,459
Total comprehensive income for the period net of tax - - - 13 4,532 4,545 (5) 4,540
Non-controlling interests acquired in subsidiaries - - - - - - 10 10
Dividends paid - - - - (4,135) (4,135) - (4,135)
Own shares acquired by EBT - - - - (248) (248) - (248)
Release of shares held by EBT - - - - 597 597 - 597
Tax on share-based payments - - - - (403) (403) - (403)
Other share-based payment reserve movements - - - - 134 134 - 134
Transactions with shareholders - - - - (4,055) (4,055) 10 (4,045)
As at 31 March 2024 50 1,809 26 13 27,051 28,949 5 28,954
Total comprehensive income for the period net of tax - - - 45 4,964 5,009 (679) 4,330
Non-controlling interests acquired in subsidiaries 10 - - - - - - 19 19
Dividends paid 6 - - - - (5,881) (5,881) - (5,881)
Own shares acquired by EBT - - - - (760) (760) - (760)
Release of shares held by EBT - - - - 1,150 1,150 - 1,150
Tax on share-based payments - - - - 37 37 - 37
Other share-based payment reserve movements - - - - (106) (106) - (106)
Transactions with shareholders - - - - (5,560) (5,560) 19 (5,541)
As at 30 September 2024 50 1,809 26 58 26,455 28,398 (655) 27,743
The notes are an integral part of these condensed consolidated financial
statements.
Consolidated statement of cash flows
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
Note £'000 £'000 £'000
Profit after tax 4,253 4,726 9,253
Non-cash adjustments 2,295 2,368 6,816
Change in working capital (960) 251 235
Cash generated from operations 5,588 7,345 16,304
Corporation tax (paid)/refunded (3,499) (1,335) (3,249)
Net cash inflow from operating activities 2,089 6,010 13,055
Purchase of intangible assets (123) (416) (789)
Purchase of property, plant and equipment (28) (19) (29)
Purchase of investments (27) (29) (1,080)
Redemption of bonds - 753 753
Redemption of other investments 1,124 - 1,144
Sale/(purchase) of money market instruments 3,856 4,549 (3,715)
Interest received 325 179 360
Net cash inflow/(outflow) from investing activities 5,127 5,017 (3,356)
Lease principal payments (73) (139) (288)
Lease interest payments (5) (19) (33)
Proceeds from issue of shares in subsidiary 25 - -
Purchase of own shares (325) - -
Dividend paid to equity shareholders 6 (5,881) (5,978) (10,113)
Cash outflow from financing activities (6,259) (6,136) (10,434)
Net increase/(decrease) in cash and cash equivalents in the period 957 4,891 (735)
Exchange (losses)/gains (280) (2) 8
Cash and cash equivalents at the beginning of the period 9,221 9,948 9,948
Cash and cash equivalents at the end of the period 9,898 14,837 9,221
Closing cash and cash equivalents consists of:
Cash 7 7,361 5,782 4,954
Cash equivalents 7 2,537 9,055 4,267
Cash and cash equivalents 9,898 14,837 9,221
The notes are an integral part of these condensed consolidated financial
statements.
Notes to the condensed consolidated financial statements for the six months
ended 30 September 2024
These condensed consolidated financial statements exclude disclosures that are
immaterial and judged to be unnecessary to understand our results and
financial position.
1. Basis of preparation
The condensed set of consolidated financial statements included in this
interim financial report has been prepared in accordance with UK-adopted
International Accounting Standard 34 - "Interim Financial Reporting". The
financial information set out in this Interim Report does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31 March 2024 were
prepared in accordance with UK-adopted IFRS and have been delivered to the
Registrar of Companies. The auditor's report on those financial statements was
unqualified and did not contain statements under section 498(2) or section
498(3) of the Companies Act 2006.
The accounting policies for recognition, measurement, consolidation and
presentation as set out in the Group's Annual Report for the year ended 31
March 2024 have been applied in the preparation of the condensed consolidated
half-year financial information.
Application of new standards
There have been no new or amended standards adopted in the financial year
beginning 1 April 2024 which have a material impact on the Group or any
company within the Group.
Going concern
The Directors are satisfied that the Company and the Group have adequate
resources with which to continue to operate for the foreseeable future. In
arriving at this conclusion, the Directors have considered various assessments
including capital and liquidity positions, the current economic and
geopolitical environment and the market in which the Group operates, and its
stakeholders. These assessments show that the Group should be able to operate
at adequate levels of both liquidity and capital for at least twelve months
from the date of signing this report.
Consequently, the Directors have reasonable expectation that the Group has
adequate financial resources to continue operations for at least twelve months
from the date of signing the report, and therefore have continued to adopt the
going concern basis in preparing the financial statements.
2. Critical accounting estimates and judgements
During the period there was a change in ownership of Record Asset Management
GmbH, judgement was made in accordance with IFRS 10 that did not result in a
loss of control for Record plc. Please see note 10 for further detail. All
other estimates and judgements applied in the interim financial statements are
consistent with those applied in the financial statements for the year ended
31 March 2024.
3. Segmental analysis
The Group's segmental reporting is consistent with the reporting segments
disclosed in the financial statements for the year ended 31 March 2024. Due to
timing, the Group does not consider presenting operating segment information
on a regular basis to the Group's Chief Operating Decision Maker (CODM) to be
useful. Therefore, for H1 FY25, Currency Management and Asset Management are
not yet considered to be operating segments. Only segmental revenue is
reviewed by the CODM. Currency Management revenue totalled £17.3 million for
the period, and Asset Management revenue totalled £3.8 million for the
period. Note 4 provides further detail on this.
4. Revenue
Revenue by product type
Management fees have been split by reporting segment, Currency Management and
Asset Management, and further analysed by product. All performance fees have
been earned by Currency Management products. Other services income includes
Currency Management fees from signal hedging and fiduciary execution, as well
as Asset Management distribution fees.
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
£'000 £'000 £'000
Management fees
Currency Management
Passive Hedging 5,781 4,336 9,720
Active Hedging 7,044 6,979 13,719
Hedging for Asset Managers 1,710 1,501 2,886
FX Alpha 808 624 1,250
Total 15,343 13,440 27,575
Asset Management
Custom Solutions 1,114 3,685 6,327
EM Debt 2,525 2,450 4,793
Total 3,639 6,135 11,120
Total management fees 18,982 19,575 38,695
Performance fees 1,641 1,517 5,840
Other services income 492 377 843
Total revenue 21,115 21,469 45,378
Revenue by geographical region
All revenue received during the period was for services provided by Group
companies situated in the UK and Germany. The following geographical analysis
of revenue is based on the destination i.e. the location of the client to whom
the services are provided. Other relates to a number of regions that are
individually immaterial.
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
£'000 £'000 £'000
US 8,209 7,909 15,652
Switzerland 6,536 4,051 15,281
UK 1,233 1,269 2,593
Europe (excluding Switzerland and UK) 4,590 7,772 8,049
Other 547 468 3,803
Total revenue 21,115 21,469 45,378
5. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the parent for the period by the weighted average number of
ordinary shares in issue during the period. Diluted earnings per share is
calculated as for the basic earnings per share with a further adjustment to
the weighted average number of ordinary shares to reflect the effects of all
potential dilution.
There is no difference between the profit for the financial period used in the
basic and diluted earnings per share calculations.
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
Weighted average number of shares used in basic calculation 192,588,856 190,789,948 191,509,539
Effect of potential dilutive ordinary shares - share options 3,764,304 2,849,607 2,174,866
Weighted average number of shares used in diluted calculation 196,353,160 193,639,555 193,684,405
Basic earnings per share 2.58p 2.48p 4.84p
Diluted earnings per share 2.53p 2.44p 4.78p
The potential dilutive shares relate to the share options, Joint Share
Ownership Plan ("JSOP") and Long Term Incentive Plan ("LTIP") awards granted
in respect of the Group's Share Scheme. At the beginning of the period there
were 15,832,891 Group Share Scheme share awards outstanding. During the
six-month period, 1,540,000 share options were granted, 1,043,750 share
options were exercised and 601,875 JSOP awards vested. Additionally, 934,289
share options lapsed in the period. There was no movement in LTIP awards in
the period.
As at 30 September 2024, there were 10,960,000 share options, 39,375 JSOP and
3,793,602 LTIP awards in place.
6. Dividends
The dividends paid during the six months ended 30 September 2024 totalled
£5,880,711. The total dividend paid was 3.05 pence per share, being a final
ordinary dividend in respect of the year ended 31 March 2024 of 2.45 pence per
share and a special dividend of
0.60 pence per share. An interim dividend of 2.15 pence per share was also
paid for the six months ended 30 September 2023, thus the full ordinary
dividend in respect of the year ended 31 March 2024 was 4.60 pence per share.
The dividends paid during the six months ended 30 September 2023 totalled
£5,977,593. The total dividend paid was 3.13 pence per share, being a final
ordinary dividend in respect of the year ended 31 March 2023 of 2.45 pence per
share and a special dividend of
0.68 pence per share. An interim dividend of 2.05 pence per share was also
paid for the six months ended 30 September 2022, thus the full ordinary
dividend in respect of the year ended 31 March 2023 was 4.50 pence per share.
The interim dividend declared in respect of the six months ended 30 September
2024 is 2.15 pence per share.
7. Cash management
In the Group's judgement, bank deposits and treasury bills that mature in
excess of 30 days after the reporting date do not meet the definition of
short-term or highly liquid and are held for purposes other than meeting
short-term commitments. In accordance with IFRS, these instruments are not
categorised as cash or cash equivalents and are disclosed as money market
instruments.
The table below summarises the instruments managed by the Group as cash, and
their IFRS classification:
As at As at As at
30 September 2024 30 September 2023 31 March 2024
£'000 £'000 £'000
Money market instruments 4,407 - 8,264
Cash 7,361 5,782 4,954
Cash equivalents 2,537 9,055 4,267
Cash and cash equivalents 9,898 14,837 9,221
Total assets managed as cash 14,305 14,837 17,485
8. Investments
All investments are measured at fair value through profit or loss.
As at As at As at
30 September 2024 30 September 2023 31 March 2024
£'000 £'000 £'000
Investment in funds 2,341 3,569 3,412
Other investments 1,532 879 1,537
Total investments 3,873 4,448 4,949
During the period, the Group made a £1.1 million redemption from one of its
fund investments. Further details on the investment in joint venture have been
disclosed in note 10.
9. Fair value measurement
The following table presents financial assets and liabilities measured at fair
value in the consolidated statement of financial position in accordance with
the fair value hierarchy based on the significance of inputs used in measuring
their fair value.
The hierarchy has the following levels:
· Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities;
· Level 2: inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
· Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The level within which the financial asset or liability is classified is
determined based on the lowest level of input to the fair value measurement.
The financial assets and liabilities measured at fair value in the statement
of financial position are grouped into the fair value hierarchy as follows:
Total Level 1 Level 2 Level 3
£'000 £'000 £'000 £'000
As at 30 September 2024
Financial assets at fair value through profit or loss
Investment in funds 2,341 944 - 1,397
Other investments 1,537 - - 1,537
Forward foreign exchange contracts held to hedge non-sterling assets 254 - 254 -
Financial liabilities at fair value through profit or loss
Forward foreign exchange contracts held to hedge non-sterling assets (4) - (4) -
Total 4,128 944 250 2,934
Total Level 1 Level 2 Level 3
£'000 £'000 £'000 £'000
As at 30 September 2023
Financial assets at fair value through profit or loss
Investment in funds 3,569 1,129 - 2,440
Other investments 879 479 - 400
Forward foreign exchange contracts held to hedge non-sterling assets - - - -
Financial liabilities at fair value through profit or loss
Forward foreign exchange contracts held to hedge non-sterling assets (178) - (178) -
Total 4,270 1,608 (178) 2,840
Total Level 1 Level 2 Level 3
£'000 £'000 £'000 £'000
As at 31 March 2024
Financial assets at fair value through profit or loss
Investment in funds 3,412 961 - 2,451
Other investments 1,537 - - 1,537
Forward foreign exchange contracts held to hedge non-sterling assets 63 - 63 -
Financial liabilities at fair value through profit or loss
Forward foreign exchange contracts held to hedge non-sterling assets (9) - (9) -
Total 5,003 961 54 3,988
There have been no transfers between levels in any of the reported periods.
Basis for classification of financial instruments within the fair value
hierarchy:
· Level 1: Listed funds and other listed investments are classified
as level 1. These investments are valued using market prices and coupon rates
as applicable.
· Level 2: Forward foreign exchange contracts are classified as
level 2. The fair value of forward foreign exchange contracts is established
using interpolation of observable market data rather than a quoted price.
· Level 3: Direct investments in private funds and share capital of
start-up companies in the digital sector have been classified as level 3.
There is no observable market for these investments, therefore fair value
measurements have been derived from valuation techniques that include inputs
that are not based on observable market data. The private funds are valued at
net asset value, and the direct investments in capital of the start-up
companies are measured using the valuation technique that is most suitable to
the applicable investment. These valuation methods are applied in accordance
with International Private Equity and Venture Capital Valuation Guidelines.
Movements in assets and liabilities classified as level 3 during the period:
As at As at As at
30 September 2024 30 September 2023 31 March 2024
£'000 £'000 £'000
At start of period 3,988 2,053 2,840
Additions 27 855 1,028
Disposals (1,024) (200) (156)
Net gain or loss (57) 132 276
At end of period 2,934 2,840 3,988
10. Related parties
Related parties of the Group include key management personnel, close family
members of key management personnel, subsidiaries and the EBT. Transactions or
balances between Group entities have been eliminated on consolidation and, in
accordance with IAS 24, are not disclosed in this note.
During the period, a resolution for a change in the ownership structure of
Record Asset Management GmbH ("RAM") took effect from 1 April 2024. Through a
combination of issuing new ordinary shares in RAM to the RAM management team
and the sale by Record plc of 10% of its shareholding to Jan Witte, Record plc
CEO, Record plc reduced its shareholding in RAM from 100% to 41%. However,
Record plc has retained the voting rights of the 10% sold to Jan Witte, and as
a result retains control with 51% of the voting rights. RAM therefore
continues to be consolidated as a subsidiary, and has a 59% non-controlling
interest, the effects of which have been disclosed accordingly in the
statement of comprehensive income and statement of financial position. This is
a change in ownership transaction that has not resulted in a loss of control.
There was also a change in the OWI-RAMS GmbH shareholding agreement, such that
the previously 51% owned subsidiary is now a 50% jointly owned joint venture.
This is a change in ownership with a loss of control and resulted in a £7k
loss on disposal. There have been no other changes in related parties from
those disclosed in the Annual Report 2024.
Key management personnel
The compensation given to key management personnel is as follows:
Six months ended Six months ended Year ended
30 September 2024 30 September 2023 31 March 2024
£'000 £'000 £'000
Short-term employee benefits 5,107 5,118 9,532
Post-employment benefits 251 144 399
Share-based payments 758 1,422 1,581
Total 6,116 6,684 11,512
Compensation to key management personnel includes variable remuneration paid
through the Group Bonus Scheme as well as inflationary increases and
promotions. More detail of the Group's expenditure is provided in the
Financial Review section.
The dividends paid to key management personnel in the six months ended 30
September 2024 totalled £368,694 (six months ended 30 September 2023:
£2,669,149; year ended 31 March 2024: £4,518,926).
11. Commitments and contingencies
On 2 October 2024, the Group signed a ten-year lease for a new office in
London. The commitment is to 1 October 2034 and, following a 12-month
rent-free period, the rent payment commitment will be £977,574 per annum.
12. Post-reporting date events
No adjusting or significant non-adjusting events have occurred between the
reporting date and the date of approval.
Information for shareholders
Record plc
Record plc is a public limited company incorporated in the UK
Registered in England and Wales
Company No. 1927640
Registered office
Morgan House
Madeira Walk Windsor
Berkshire
SL4 1EP
United Kingdom
Tel: +44 (0)1753 852 222
Fax: +44 (0)1753 852 224
Principal UK trading subsidiaries
Record Currency Management Limited
Registered in England and Wales
Company No. 1710736
Record Group Services Limited
Registered in England and Wales
Company No. 1927639
Both principal UK trading subsidiaries are based in Windsor.
Dates for the FY25 interim dividend
Ex-dividend
date
28 November 2024
Record
date
29 November 2024
Interim dividend payment date 20 December 2024
Registrar
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
United Kingdom
Further information about the Registrar is available on their website:
www.linkgroup.eu
Further information on Record plc can be found on the Group's website:
www.recordfg.com
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FZLLFZFLBFBZRecent news on Record
See all newsRCS - Record PLC - Non-Binding Term Sheets for US$2.2 billion signed
AnnouncementREG - Record PLC - Director/PDMR Shareholding
AnnouncementREG - Record PLC - Holding(s) in Company
AnnouncementREG - Record PLC - Director/PDMR Shareholding
AnnouncementREG - Record PLC - Fourth Quarter Trading Update
Announcement