17th Jun 2014 09:43
LONDON (Alliance News) - Currency manager Record PLC Tuesday said that its pretax profit and revenue increased in its last financial year, driven by a rise in assets under management equivalents, which surged past USD50.0 billion for the first time in six years.
In a statement, Record said it made a GBP6.5 million pretax profit in the year ended March 31, compared with GBP6.1 million a year earlier. Revenue increased to GBP19.9 million, from GBP18.6 million, while administrative expenses rose to GBP13.4 million, from GBP12.3 million.
Assets under management equivalents rose to USD51.9 billion, up 49% over the year, driven by several new hedging mandates, modestly offset by client losses, driving net inflows of USD14.1 billion. Since the year end, Record reported the termination of a dynamic hedging mandate of about USD600.0 million. Client numbers increased by four to 48 in Record's recent financial year.
"This growth has been achieved in the context of a continued shift in business mix towards hedging and particularly passive hedging services. Whilst these services attract lower fee rates, passive hedging mandates have the advantage of being less sensitive to investment performance and tend to have greater longevity, offering greater opportunity to nurture relationships and identify new business opportunities with the same client," Chairman Neil Record said in a statement.
However, Record has been hit by a number of challenges, including competition and increased regulatory responsibilities.
"Further growth in mandates and assets under management equivalents will be required to offset fully the impact of fee rate reductions undertaken in the financial year, and the group is confident that its diversified range of products is well-positioned to respond to varying client demand," Record added.
He also said that divergence in central banks' policies has driven interest in return-seeking opportunities, with the first significant external investment into the Record FTSE FRB10 Index Fund just prior to year end. Record said the group hopes to build on that growth in the current financial year.
Record maintained its full-year dividend at 1.50 pence.
Record shares were Tuesday quoted at 35.40 pence Tuesday morning, up 1.1%.
By Samuel Agini; [email protected]; @samuelagini
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