Record

20 November 2017
By Maynard Paton

Update on Record (REC).

Event: Interim results and shareholder presentation for the six months to 30 September 2017 published 17 November 2017

Summary: This was another frustrating RNS from the specialist currency manager. The cost base has ‘inevitably’ increased, yet revenue and client numbers remain stagnant and — as usual — there’s no real sign of the business enjoying an upturn anytime soon. At least REC continues to generate cash, retains a robust cash pile and distributes a healthy dividend. The yield is 5%, which is not too bad in the current market. I continue to hold.

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23 June 2017
By Maynard Paton

Quick update on Record (REC).

Event: Final results and shareholder presentation for the twelve months to 31 March 2017 published 16 June 2017, and proposed tender offer.

Summary: There was a certain irony about these figures. REC makes its money by managing currency movements for clients… yet the group itself has prospered of late largely because the weaker GBP has translated into greater management fees. Whether REC’s clients have actually prospered is harder to say, as there still seems little evidence of a growing customer base. Still, I welcome REC’s decision to hand excess cash back via larger dividends, but the accompanying £10m tender offer does appear as if it was devised primarily to help REC’s founder plan for his retirement. With operating costs expected to rise, too, I reckon the tender price equates to an underlying P/E of 14-15. I continue to hold.

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21 November 2016
By Maynard Paton

Quick update on Record (REC).

Event: Interim results for the six months to 30 September 2016 published 18 November 2016

Summary: If nothing else, REC’s results are consistent — once again this specialist currency manager revealed stagnant financial progress, a lack of new business and a dependence on a handful of major clients. Nevertheless, the group sports high margins and cash-flush accounts,  while the P/E could be as low as 7 thanks to the weaker GBP. Talk of potential special dividends unfortunately remains talk for now, but at least the ordinary payout yields 5.2%. I continue to hold.

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23 June 2016
By Maynard Paton

Quick update on Record (REC).

Event: Final results for the twelve months to 31 March 2016 published 17 June 2016

Summary: These far-from-spectacular figures were no surprise. Indeed, both revenue and profit have stagnated for five years now and there was no real suggestion that improvements will occur anytime soon. What’s more, a new regulatory risk was disclosed that may hinder progress :-( Nevertheless, this specialist currency manager did talk of future special dividends, while the high-margin, cash-rich nature of the business remains attractive. I reckon the underlying P/E is 8 and the yield is 6%-plus, and I continue to hold. 

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07 January 2016
By Maynard Paton

Quick update on Record (REC).

Event: Business Update published 07 January

Summary: Not a great start to 2016 — REC has admitted a significant mandate win from last year has now been ‘suspended’. Despite a more accommodating environment for the specialist currency manager, this update just adds to the disappointing client losses of late . Funnily enough, a stronger dollar appears to sustain my earnings guess even after today’s client withdrawal. Meanwhile, the shares do not look expensive on a possible P/E of 8. I continue to hold.

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24 November 2015
By Maynard Paton

Quick update on Record (REC).

Event: Interim results published 24 November

Summary: A lacklustre set of results in which the board remained optimistic of further progress — but where new clients were still nowhere to be seen. This statement was particularly irritating due to higher-than-expected staff costs and commentary about an ‘increased’ dividend. However, at least my earnings guess has not changed. One day I trust REC’s currency strategies will have their day in the sun, but until then I must content myself with a useful 5%-plus yield and dreams of what could be. I continue to hold.

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25 August 2015
By Maynard Paton

Quick update on Record (REC).

Event: Business update published 25 August

Summary: A very disappointing statement. A major client has withdrawn $2.8bn from REC’s administration and I’ve had to slash my earnings guess by 27%. The shares have dropped significantly, though at 29p they remain valued at 10x possible profits and yield 5.7%. The business remains high margin and cash rich, but sadly still dependent on a small number of customers. I continue to hold.

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16 June 2015
By Maynard Paton

Quick update on Record (REC).

Event: Final results published 16 June

Summary: Satisfactory results, with a positive outlook and a 10% dividend lift supporting my belief that REC’s recovery is gathering pace. However, news of a 10% company-wide salary hike for staff was not so pleasing, and my earnings guess for 2016 has been trimmed accordingly. Nevertheless, the accounts remain impressive and the valuation looks lowly, and I have bought more shares today.

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20 January 2015
By Maynard Paton

I’m still ploughing through my portfolio to give each of my holdings a much-needed thorough review.

I’ve now come to Record (REC), a £75m currency-hedging business, where you may think my past share dealings have been somewhat bold.

You see, I first bought REC during December 2010 at 37p. At first the company’s updates were not that positive, so within a year I found myself averaging down at 24p — and then averaging down even more at 13p — because my sums pointed to a significantly cheaper valuation.

In fact, by April 2012 I was averaging down further at 11p and then at 10p, which luckily proved to be the bottom. From what I recall, the market was so depressed with the share, the 10p price then equalled REC’s net cash position and essentially threw the actual business in for free.

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