Record (REC) H2 2024 earnings summary

Executive summary

• AUM reached a record $102.2 billion as of March 31, up 17% year-over-year, driven by net inflows and positive asset value increases.

• Revenue grew 2% year-over-year, supported by strong performance fees in Enhanced Passive Hedging and FX Alpha products.

• Underlying operating margin remained at 32%, with underlying profit before tax up 1% to GBP 14.8 million.

• Strategic focus narrowed to six core product categories; digital asset efforts were discontinued, resulting in a GBP 1.9 million IT impairment.

• Leadership transition underway, with a new CFO and expanded teams in the US and Europe.

Financial highlights

• AUM increased GBP 14.5 billion (17%) to GBP 102.2 billion, with GBP 6.8 billion net inflows and GBP 6.9 billion from positive market valuations.

• Revenue rose 2% year-over-year; management fees grew 1% despite a GBP 0.8 million reduction from a client shifting to a lower-margin strategy.

• Performance fees were GBP 2.9 million each from Enhanced Passive Hedging and FX Alpha products.

• Underlying profit before tax rose 1% to GBP 14.8 million; statutory profit before tax fell 12% to GBP 12.9 million, reflecting the IT impairment.

• Cash increased 21% to GBP 17.5 million; ordinary dividend was GBP 0.046 per share and special dividend GBP 0.006, totaling GBP 0.052.

Outlook and guidance

• Management fees expected to be broadly flat in the coming year, as the full-year impact of a major client’s strategy change offsets new business growth.

• Costs expected to remain broadly flat year-over-year and managed in line with management fees.

• No further material impairment charges anticipated following the recent IT write-off.

• Strategic review ongoing, with further updates on medium-term growth plans expected later in the year.