Specialist currency manager Record's (REC) shares jumped 15 per cent on the back of these half- year figures. That follows a price slump of similar proportions just a week earlier after management warned that plans to lower its fees would trim £1.8m from full-year profits.
Record offers a range of currency mandates - principally to institutional investors. These include passive and currency-for-return mandates, as well as a dynamic hedging suite, which provides the protection of a passive hedging instrument with a secondary objective of generating value. But increased competition meant that the lower fees offered to new clients will now be applied to existing clients - hence the lowering of fee income expectations. However, management assured shareholders that it expects an increase in volumes to more than offset the lower fee structure. Indeed, first-half client numbers rose from 44 to 46 and assets under management equivalents rose 8 per cent to $37.7bn (£23.6bn). Moreover, since the half year ended, two new passive hedging mandates were started worth $12bn.
Prior to these figures, but following the profit warning, JPMorgan Cazenove had trimmed its estimates for full-year adjusted pre-tax profits from £8 to £7m, with its EPS estimate having fallen from 2.6p to 2.3p (from £6m and 2p in 2013).
| RECORD (REC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 32.5p | MARKET VALUE: | £72m | |
| TOUCH: | 30-32.5p | 12-MONTH HIGH: | 38p | LOW: 25.75p |
| DIVIDEND YIELD: | 6.9% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 13p | NET CASH: | £15.5m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 8.71 | 2.73 | 0.94 | nil |
| 2013 | 9.87 | 3.05 | 1.20 | 0.75 |
| % change | +13 | +12 | +28 | - |
Ex-div: 27 Nov Payment: 20 Dec | ||||
