Record - Underlying growth and pipeline are attractive

In H124, Record posted steady management fee growth of 3% y-o-y to £19.6m as the company benefited from a higher assets under management equivalent (AUME) base. Total revenues, however, were down 3% as performance fees in H123 outweighed those earned in H124. Profit before tax was down 17% y-o-y to £6.3m as Record incurred costs related to its expansion and modernisation initiatives. In line with its progressive dividend policy, Record increased its dividend by 5% y-o-y to 2.15p per share. After

Record - Core inflows solid but delays in new product line

In its Q224 update, Record reported core inflows of US$1.5bn that were more than offset by US$3.4bn of negative market and FX movements. Consequently, Record experienced a 2% net decline in assets under management equivalent (AUME) of US$1.9bn versus Q124. Record also earned performance fees of £1m in Q224 as the group continued to benefit from interest rate differentials. Management stated that the higher-margin asset management product rollout continues to progress, albeit at a slower pace tha

Record - Positive outlook for FY24

Record continues to deliver on its diversification and modernisation strategy, reporting FY23 revenues of £44.7m, up 27% y-o-y. Excluding exceptionally strong performance fees of £5.8m, revenues grew by a solid 12% with all areas contributing. Additionally, in the Q124 trading update, Record earned performance fees of £0.5m, implying a run rate above our forecast for FY24. During Q124, net outflows of $2.5bn were recorded, predominantly in passive hedging. Our estimates are broadly unchanged sin

Record - Strong inflows in FY23

In FY23, Record’s assets under management equivalent (AUME) increased by 5.5% to $87.7bn (FY22: $83.1bn). Full year inflows were strong at $9.1bn (FY22: $2.4bn), or 11% of opening AUME, although marginal outflows of $0.1bn were recorded in Q423. In its trading statement, management points to its expectation of continued growth in FY24 in a more normalised FX volatility environment and in delivering new and higher-margin revenue streams through product development.

Record - Explaining strategy and growth

In its capital markets event in February, Record provided more detail on the progress it is making with its strategy and in particular on its diversification initiatives. This highlighted a range of partnerships to develop new products and, as a result, a promising sales pipeline pointing towards growth and potentially contributing to realisation of the target for FY25 revenue of £60m. Subsequently, signalling a further step in its succession planning, the group has announced that Neil Record, f

Record - Showing good growth and on track strategically

Record is continuing to make good progress with its strategy of developing new capabilities and products to augment its core currency management services. This holds out the prospect of significantly higher and more diversified revenue and profit by FY25. In the meantime, existing currency strategies have performed well against a more volatile market background, which also creates a favourable background for conversations with potential clients for well-established hedging services.

Record - Changes taking effect

Record sees itself at the beginning of a new stage as it develops its capabilities as an asset manager rather than purely a supplier of specialist currency overlay services. The progress so far is good with the FY22 results beginning to show the benefits of diversification and the introduction of new, higher fee-margin products. More of these are in development and investment in systems and staff should underpin operational gearing if the group succeeds in its aim of reaching FY25 revenue of ove

Record - Positive flow and muted market impact Q422

For FY22 as a whole, Record’s assets under management equivalent (AUME) increased by 3.7% and were only slightly lower in Q422 on market movements. The group is seeing the benefits of diversification and new products, both in terms of AUME and average fee rates. Increased investment in staff and technology have tempered short-term expected earnings growth, but operational gearing benefits should become more evident once new products gain further traction.

Record - Evidence of new strategy gaining traction

Record’s H122 results showed benefits from its growth and diversification strategy. Its first new product, a sustainable fund, is increasing AUM and there is a pipeline of further opportunities with the potential to add further AUM and produce a richer fee mix. Board confidence in the outlook is evident in the step up in the ordinary dividend.

Record - Further growth in AUME

Record’s assets under management equivalent (AUME) has continued to grow in Q122 with net inflows including the launch of the new Record Emerging Market Sustainable Finance Fund. This is the first of several new product initiatives to be realised and will contribute to diversification of revenues. The group is also continuing to focus on modernisation and succession to support future growth.

Record - Launch of new EM sustainable finance fund

The announcement of the launch of the Record Emerging Market Sustainable Finance Fund in partnership with UBS Global Wealth Management brings to fruition the first of the group’s new product initiatives within its modernisation and growth strategy. The initial fund size is larger than we assumed and there is good potential for growth in the long term.

Record - Scene set for marked profit improvement

After a period of muted progress, in early 2020 Record adopted a new strategy with an emphasis on growth. Since then, work on new product development, diversification and management succession has progressed. The existing strengths of the business have been sustained, underpinning H221 net inflows of $10bn, mainly from a new dynamic hedging mandate, and the group ended the year with assets under management equivalent (AUME) at a new high of $80.1bn. Against this backdrop, the group continues to

Morning Note – 22 April 2024

Benefits of scale set to materialise

Frenkel Topping - Resilient with strong growth potential

FY 2023 was a challenging year for Frenkel with higher interest rates encouraging clients to place money into lower margin money market funds. Despite this, sales grew +32% (supported by recurring revenue +9% and +51% in non-recurring), EBIT margins remained strong at 22% and adj. EPS grew +17% (taking into account the higher number of shares). FY 2024 has seen a solid start to transactional business and there is a strong pipeline of new FUM opportunities both of which support further growth. Wi

Bluefield Solar Income Fund – Fundamentals shine despite discount

The manger comments that, in common with the other trusts in the renewable energy sector, the last six months have continued what has been a challenging period for the Bluefield Solar Income Fund (BSIF). It adds that the trust’s ongoing fundamental performance has failed to reverse a steady slide in its share price which began back in May 2023. Despite this, it says the company has continued to deliver solid NAV growth and market-leading shareholder distributions thanks to a range of contractual

LSL Property Services (LSL LN) - Transformation & market recovery

2023 results are, as indicated in its February pre-close update, “slightly ahead of market expectations”. Current trading continues to improve, with 1Q24 underlying operating profit up yoy, “reflecting the benefits of the Group’s transformation programme completed in 2023 as well as improving market conditions.” With net cash of £35m at end 2023, the Board approved 7.4p final DPS and £7m buy back.

Henderson Far East Income - Repositioning to raise total returns

Henderson Far East Income (HFEL) has consistently delivered on its objective to provide a rising dividend. However, like many investors, HFEL’s managers overestimated the potential for a post-pandemic rebound in China. The trust’s resultant overweight to Chinese consumer and other cyclicals led to a fall in portfolio revenues and underperformance in the financial year ended 31 August 2023 (FY23). With a view to improving future returns, HFEL’s board has since indicated an increased willingness t

S&U - PBT ahead, encouraging volume trends

S&U reported FY24 PBT of £33.6m, down from £41.4m in FY23 on higher funding and regulatory costs and higher impairments in Advantage in H2. PBT was 2% ahead of our forecast as stronger revenues – up 12% to £115.4m – and better costs offset higher-than-expected impairments. Net receivables grew to a record at both Advantage and Aspen and management noted particular strength in Q4 and a good trading environment in the current year. Having absorbed a significant rise in funding cost as well as addi

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

Foresight Solar Fund - Termination of coverage

Edison Investment Research is terminating coverage on ABC Arbitrage (ABCA), paragon (PGN), Foresight Solar Fund (FSFL), Kendrion (KENDR), Lithium Power International (LPI), Triple Point Energy Transition (TENT), 4iG (4IG), e-therapeutics (ETX), Pharnext (ALPHA) and Shield Therapeutics (STX). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our web

International Public Partnerships - Consistently and responsibly delivering

International Public Partnerships’ (INPP’s) FY23 results show that it continues to deliver consistent and predictable returns for investors, while delivering environmental and social benefits for the individuals and communities that are served by its assets. Despite this strong performance and a substantial need for private infrastructure funding, the macroeconomic environment has weighed on INPP’s share price, in common with the wider sector. Regardless, attractive returns are available from th

LIBERUM: PensionBee: Strong start to the new financial year

LIBERUM: NewRiver: Q4 trading update: Continued operational momentum

Regional REIT - Performing as expected ahead of refinancing

In a challenging market, Regional REIT’s (RGL’s) FY23 operational and financial performance was robust, in line with expectations and previous guidance. Investor focus remains on the company’s loan to value (LTV) reduction and bond refinancing plans, explored in detail in our previous note and RGL will provide an update on this in due course.

Witan

Business as usual for WTAN’s executive team, while the board reviews investment management arrangements…

LIBERUM: PayPoint: On track for £100m of EBITDA in FY 26