Record PLC (LON:RECL) average assets under management equivalent (AUME) were stable in the first half. Management fees were modestly lower as a result of a mix change towards lower management fee rate products, although some of these are capable of earning performance fees. Evidencing the potential to offset management fees forgone, the period saw crystallisation of a performance fee which allowed profit to increase by over 6%. For the future Record’s continued focus on new and enhanced products should help defend and increase the client base and AUME levels while performance fees could generate positive earnings surprises.
H119 results
Record’s first half results showed total revenue up 3.4% to £12.6m including a performance fee of £1m. We calculate that average AUME in sterling terms was broadly similar to H118. Management fees alone were down 4.5%, partly reflecting greater adoption of the enhanced passive hedging product: some of these mandates carry a lower management fee but are capable of earning performance fees. Also affecting revenue was last year’s termination or switch from dynamic to passive hedging by UK clients. Costs were held steady allowing pre-tax profit to increase by 6.5% and diluted EPS by 5.9%. The interim dividend was unchanged at 1.15p and Record remains committed to its policy of paying out excess earnings in special dividends. The group retains a buffer of c £14m over its regulatory requirement and own cash (excluding cash in seed funds) of £17.5m.
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