Currency fluctuations may have caused havoc for many UK companies' top lines during the past 12 months, but for institutional investor Record (REC) they have brought a few rewards. Having more than 80 per cent of its revenue denominated in non-sterling currencies and 90 per cent of its cost base in sterling gave a natural boost to pre-tax profit. More importantly, the political uncertainty and subsequent currency volatility has made institutions more aware of the need to hedge their exposure to these fluctuations, says chief executive James Wood-Collins.
As a result notional assets under management grew 10 per cent to $58.2bn (£46.4bn), a record high. Client numbers also stood at 59, one up on the same time in the previous year. The passive hedging strategy, which hedges a consistent proportion of an institution's currency risk throughout the cycle, increased revenue by 29 per cent. Since it accounts for 53 per cent of management fees, it helped boost these by 9 per cent to £23m.
This performance has given management the confidence to reduce the excess capital it holds from two years' worth of overheads to one year, excluding variable remuneration. In addition to the 0.91p-a-share special dividend declared alongside these results, management has announced plans to return £10m to shareholders, although the exact timing has not yet been confirmed.
Analysts at Cenkos expect adjusted pre-tax profit of £8.9m during the 12 months to March 2018, giving EPS of 3.2p (from £7.9m and 2.9p in FY2017).
RECORD (REC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 47p | MARKET VALUE: | £104m | |
| TOUCH: | 46-47.75p | 12-MONTH HIGH: | 48p | LOW: 23p |
| DIVIDEND YIELD: | 4.3% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 17p | NET CASH: | £19.1m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 18.6 | 6.08 | 1.98 | 1.5 |
| 2014 | 19.9 | 6.54 | 2.48 | 1.5 |
| 2015 | 21.1 | 7.68 | 2.66 | 1.65 |
| 2016 | 21.1 | 6.93 | 2.55 | 1.65 |
| 2017 | 23.9 | 8.68 | 2.91 | 2* |
| % change | +13 | +25 | +14 | +21 |
Ex-div: 29 Jun Payment: 2 Aug *Excludes special dividend of 0.91p a share | ||||
