22 November 2019
Record Plc –H1 Results
Share Price 41p
Mkt Cap £81m
Conflict Disclosure: No Holding
- Results Net inflows of 3.5% in the 6 month period drive the increase in AUM to $59.9bn. Management fees declines 3% to £11.1m and these were no performance fees. Operating margin declined to 27% (2018 32%) delivering PBT £3.2m (2018 £4m). The outlook refers to confident of making further progress in the current financial year in terms of AUM.
- Estimates FY PBT is expected to be £5.9m which appears comfortable given £3.2m in H1.
- Valuation PER is 16.8X and yield 5.7%.
- Conclusion The multi strategy product now has a long term performance record, and the company reports an encouraging range of new business opportunities balanced against fee pressure. This is a period of investment and at £81m mkt cap is starting to re appear on radar screens. Looking interesting after 8 years out in the cold.
19 July 2019
Record Plc – Q1 Update
Share Price 32.5p
Mkt Cap £65m
Conflict Disclosure: No Holding
- Update AUME was up 1.7% to $58.3bn but due to sterling weakness was up 4% in sterling terms. Net inflows were 0.5% at $0.3bn. Clients numbers grew from 65 to 68 over the period.
- Estimates. Full year forecasts anticipate £5.6m PBT down from £8m last year following investment in New York last year and £2.3m of performance fees last year not anticipated to repeat. .
- Valuation PER 14, Yield 7.2%. The dividend is just covered on this year’s forecast and there is £21m net debt.
- Conclusion Other than the yield it has been hard to see the attractions of this resilient but low growth company over recent years. As the cycle changes I suspect the attractions of a currency manager which has invested in its distribution may become more obvious over coming years. This could be a time to take more interest in this one.
13 June 2019
Record – FY Results
Share Price 29p
Mkt Cap £58m
Conflict Disclosure: No holding
- Results Revenue up 5% to £25m with PBT growth of 9% to £8m which is an operating margin of 32%. AUME was down 8% over the year to $57.3bn but only down 1% in £. EPS 3.27p (+8%). And FY dividend of 2.3p. Client numbers grew by 5 to 65. Outlook refers to Brexit uncertainty and innovation through technology
- Estimates Flat EPS estimates are in place for the year to March 2020 which looks reasonable.
- Valuation PER 13 and dividend yield of 8.1%. Note the ROE is 23%
- Conclusion This looks like there could be a change in the business to happen over the next 12 months with the references to innovation. The core business is solid with a high ROE. Income funds need to take a look.
17 April 2019
Record PLC – Trading Update
Share Price 28p
Mkt Cap £56m
Disclosure: No holding
- Update AUM was down 0.9% with net outflows of £3.4bn over the 3 months to March up from £1.1bn the previous quarter. Client number unchanged at 65 and fee rate unchanged.
- Estimates The anticipated 3% revenue growth looks hopeful to March 19 but the statement suggests trading is in line. 2020 estimates assume a 10% revenue fall.
- Valuation Per 12, yield 8%
- Conclusion This business looks like it has lost its way and is priced accordingly. The 8% yield may have attractions but better returns may be found elsewhere.
18 January 2019
Record – Trading Update
Share Price 32p
Mkt Cap £63m
- Update AUME was down 4.2% over the quarter to £45.4bn. Performance was positive in the quarter, notably on the emerging markets funds. £1.3m performance fees were earned and the company has seeded a new multi strategy ESG portfolio. The outlook says they continue to see new business opportunities.
- Estimates Forecasts look for £23.6m revenues for the year to March 2019, modestly down on the £23.8m in the prior year. No growth is expected beyond that because of recent client losses. There are currently 65 clients
- Valuation PER is 12.8 and yield 7.7%
- Conclusion The shares are 35% off from their highs in March following the announcement of client losses. The 7.7% yield is supporting the shares and the narrative around new business opportunities is at odds with the flat forecasts which has the faint smell of a turning point.
21 July 2017
Share Price 45p
Mkt Cap £89m
· AUM was £46.1m which was up 2.9% in USD terms but down 1% in £ over the 3 month period. Net outflows of $0.5bn is underwhelming. No performance fees were earned in the quarter
· Valuation The shares trade on a PER of 13.5X and yield 6% from a dividend that is just covered
· Conclusion Shares are up 45% year to date and the valuation anomaly at the beginning of the year has now closed. With other exciting companies now in this space such as AlphaFX and FairFX it is time to move on.