Record — Robust AUM and opportunity amid volatility

Record (LSE: REC)

Last close As at 29/04/2025

GBP0.53

−1.20 (−2.21%)

Market capitalisation

GBP106m

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Research: Financials

Record — Robust AUM and opportunity amid volatility

Record has reported robust assets under management (AUM) for Q425. Against a background of increased volatility in currency markets, the company’s core risk management services continue to demonstrate their value to both existing and potential clients, while providing opportunities in asset management products. An additional £0.3m of performance fees in the quarter has taken the FY25 total to £3.2m and we have slightly lifted our FY25 earnings forecast. FY25 results will be reported on 20 June.

Martyn King

Written by

Martyn King

Director, Financials

Financials

Q425 AUM update

30 April 2025

Price 53.00p
Market cap £105m

Net cash and money market instruments at H125

£14.8m

Shares in issue

199.1m
Code REC
Primary exchange LSE
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs 6.0 (7.3) (6.0)
52-week high/low 67.4p 45.0p

Business description

Record is a specialist independent asset, currency and derivatives manager. It provides a number of products and services for institutional clients, including passive and dynamic hedging, and a range of currency for return strategies, including funds and customised segregated accounts.

Next events

FY25 results

20 June 2025

Analyst

Martyn King
+44 (0)20 3077 5700

Record is a research client of Edison Investment Research Limited

Note: EPS is on a fully diluted basis. DPS excludes special dividends of 0.68p per share in FY23 and 0.60p per share in FY24.

Year end Revenue (£m) PBT (£m) EPS (p) DPS (p) P/E (x) Yield (%)
3/23 44.7 14.6 5.81 4.50 9.1 8.5
3/24 45.4 12.9 4.78 4.60 11.1 8.7
3/25e 42.1 11.3 4.83 4.60 11.0 8.7
3/26e 42.9 12.0 5.02 4.60 10.6 8.7

Headline AUM affected by fx and market movements

Q425 AUM was $100.9bn, up $0.4bn versus Q325, comprising a $0.7bn net outflow, a $2.1bn positive fx movement and a $1.0bn negative market movement. Q425 saw strong performance from Hedging for Asset Managers ($1.2bn net inflow) and net inflows in Active Hedging ($0.4bn), offset by a $2.2bn outflow from FX Alpha as a large client mandate was discontinued. A $0.8bn net outflow in H225 similarly masks the $2.1bn inflow to Hedging for Asset Managers. Fund flows are the true guide to Record’s performance, totalling $25bn over the past five years. Total movements in reported AUM also reflect market movements in underlying customer assets and currencies. Almost all Passive and Active Hedging AUM (c 80% of total AUM) and some Custom Solutions mandates are linked to equity, fixed income and other market levels. A positive impact on reported AUM from market movements of $1.1bn in H125 was reversed by a $1.5bn reduction in H225. Almost 80% of AUM is non-US dollar denominated, two-thirds of which is in Swiss francs. A $4.9bn positive fx impact in H1 was partly offset by a $2.8bn negative movement in H2. In H125, the Swiss franc rose by c 7% versus the US dollar, but fell by c 5% in H225. It has since risen again, which will have a positive impact on future reported AUM.

A year of strategic transition

FY25 is a transition year financially, reflecting the full impact of a late FY24 switch by a large client from a higher-margin multi-product strategy to a lower-margin passive hedging strategy; the product offering refocus; and ongoing investment to drive growth in core areas. Although AUM is lower in US dollars than at end-H125, fees are based on the underlying contract values in the currency of denomination and, with average fee rates remaining broadly unchanged, Record continues to expect H2 fee income similar to H1. Continuing performance fees support a modest increase in our FY25 earnings forecast and we make no material change to FY26.

Valuation: Robust AUM and strong balance sheet

Record’s FY25e P/E is 11.0x and its calendar EV/EBITDA ratio is 7.5x. The FY25e yield exceeds 8.7% on the fully covered dividend. Versus peers, we estimate this represents a c 30% EV/EBITDA premium and a 20% yield discount, supported by strong recent net AUM performance and the company’s net cash position.

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