Divergence in global monetary policy is making markets jittery, but that's good news for currency specialist Record (REC), which posted a second consecutive year of growth in assets under management, revenue and earnings.
The currency manager has suffered in previous years as clients have migrated from higher-margin dynamic hedging services to lower-margin passive products. But this trend has now slowed. New or extended mandates worth $3.3bn brought the volume of passively hedged assets to $41.2bn, but assets allocated to absolute return products - which command fees of 0.16 per cent - doubled to $4.8bn.
One of Record's challenges is customer concentration: five key clients still each account for 10 per cent of total revenues. The company made modest progress in diversifying its sales base, with client numbers up from 48 to 55 overall.
Shareholders have been rewarded with a 10 per cent hike in the dividend, which the company expects to maintain at the same level this year. Employees were also given a one-off 10 per cent pay rise to bring salaries into line with industry averages after three years of what chief executive James Wood-Collins calls "stringent cost controls".
Consensus forecasts for the 12 months to March 2016 put earnings per share at 2.8p (from 2.66p in FY 2015).
RECORD (REC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 37p | MARKET VALUE: | £81m | |
| TOUCH: | 36-37p | 12-MONTH HIGH: | 37p | LOW: 29p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 14p | NET CASH: | £12.0m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 28.2 | 12.54 | 4.03 | 4.59 |
| 2012 | 20.5 | 6.71 | 2.23 | 1.50 |
| 2013 | 18.6 | 6.08 | 1.98 | 1.50 |
| 2014 | 19.9 | 6.54 | 2.48 | 1.50 |
| 2015 | 21.1 | 7.68 | 2.66 | 1.65 |
| % change | +6 | +18 | +7 | +10 |
Ex-div:25 Jun Payment:29 Jul | ||||
