Final Results

About this update from Record Plc

[{"type":"text","content":"\n \n PRESS RELEASE \n Record plc \n   \n 28 June 2024 \n   \n FINAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2024 \n   \n Positive net inflows take AUM to a record high \n   \n Record plc, the specialist currency and asset manager, today announces its audited results for the year ended 31 March 2024 (\"FY-24\"). \n   \n Financial headlines: \n ·      Revenue growth of 1.6% to £45.4m (FY-23: £44.7m) \n ·      AUM 1 in USD terms up by 16.5% to $102.2bn (FY-23: $87.7bn) \n ·      Underlying 2 pre-tax profit increase of 1.4% to £14.8m (FY-23: £14.6m) \n ·      Pre-tax profit decrease of 11.6% to £12.9m (FY-23: £14.6m) \n ·      Underlying 2 operating profit margin of 32% (FY-23: 32%) \n ·      Decreased operating profit margin of 28% (FY-23: 32%) \n ·      Basic underlying 2 EPS of 5.60 pence (FY-23: 5.95 pence) \n ·      Basic EPS decrease of 18.7% to 4.84 pence (FY-23: 5.95 pence) \n ·      Consistent performance fees of £5.8m (FY-23: £5.8m) \n ·      Final ordinary dividend proposed of 2.45p per share (FY-23: 2.45p) \n ·      Special dividend of 0.60p per share \n ·      Strong and liquid financial position with shareholders' equity of £28.9m (FY-23: £28.3m) and assets managed as cash of £17.5m (FY-23: £14.5m) \n   \n Key developments: \n ·      Strong momentum in AUM growth (+16.5%) driven by net inflows of $6.8bn to close the year at $102.2bn, the highest ever level of AUM to date \n   \n ·      Successful launch of two Luxembourg funds with aggregate AUM of $320 million at year end \n   \n ·      High level of performance fees maintained for FY-24: £5.8m (FY-23: £5.8m) \n   \n ·      Evolution of the Board in line with succession planning sees Jan Witte appointed as Group CEO from 1 April 2024 and Richard Heading appointed as CFO effective 1 July 2024 \n   \n ·      Decision to refocus IT strategy results in impairment of £1.9m for the year \n   \n Outlook \n   \n ·      Management fees expected to be broadly flat for FY25 reflecting full-year impact of headwind due to client mandate switch in FY24 Q3 \n ·      Costs will be carefully managed to be in line with management fees, while accommodating investment to support future growth \n ·      We will provide an update on medium-term growth plans later this year on completion of our strategic review \n   \n   \n Commenting on the results, Jan Witte, CEO of Record plc, said: \n   \n \"I am proud to be leading Record into the next phase of its development supported by a strong team of senior colleagues, many of whom have been at Record for ten years or more.  \n   \n \"The underlying financial performance of the Group remains strong, with material growth in AUM, which rose to its highest ever level of $102.2 billion, new fund launches and the repeat of last year's high level of performance fees of £5.8 million. \n   \n \"I am confident that the renewed focus we have on a core suite of six product categories, where our offering and value-add is unique, positions us well for medium-and long-term growth.\" \n   \n Analyst presentation \n There will be a presentation for analysts at 9.30am on Friday, 28 June 2024 held via a Zoom call. Please contact the team at Buchanan via [email protected] for further details. A copy of the presentation will be made available on the Group's website at  www.recordcm.com . \n   \n   \n   \n For further information: \n   \n \n \n \n \n Record plc \n \n \n +44 (0) 1753 852222 \n \n \n \n \n Jan Witte - Chief Executive Officer \n \n \n \n \n \n \n \n Steve Cullen - Chief Financial Officer \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Panmure Gordon \n \n \n + 44 (0) 20 7886 2500 \n \n \n \n \n Corporate Broking: David Watkins \n \n \n \n \n \n \n \n Corporate Advisory: Atholl Tweedie \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Buchanan \n \n \n +44 (0) 20 7466 5000 \n \n \n \n \n Simon Compton \n \n \n [email protected] \n \n \n \n \n Henry Wilson \n \n \n   \n \n \n \n \n George Beale \n \n \n   \n \n \n \n \n   \n   \n   \n 1.     AUM managed by Record Financial Group at 31 March 2024 is a combination of USD 97.5 billion based on the notional value of currency assets under management through the Group's currency products and USD 4.7 billion in total market value of other assets managed by the Group. By convention this is quoted in US dollars. \n 2.     All Underlying values referred to throughout the annual report are an alternative performance measure equal to the Statutory values less the effects of the £1.9 million intangible asset impairment. This impairment is considered to be a one-time exceptional expense specific to the current period and has been excluded to enhance comparability with prior year figures. \n \n \n   \n   \n   \n Chairman's statement \n   \n In line with our succession planning now materialising, I am confident we have a new generation of senior management in place with strong and complementary skills to take the business forward. \n   \n David Morrison   |  Chairman \n   \n Ordinary dividend per share \n 4.60p \n +2.2% \n FY-23: 4.50p \n   \n Underlying earnings per share 3 \n 5.60p \n -5.9% \n FY-23: 5.95p \n   \n 3.     All Underlying values referred to throughout the Annual Report are an alternative performance measure equal to the Statutory \nvalues less the effects of the £1.9 million intangible asset impairment. This impairment is considered to be a one-time exceptional expense specific to the current period, and has been excluded to enhance comparability with prior year figures. \n   \n There are few people who have the desire and determination to start a new business, who then also have the management skills to allow it to develop and mature and, in the greater course of time, to set in place the succession to take on the business from the founding generation. Neil Record, the founder of the Company, whom I succeeded as Chairman after the last Annual General Meeting, managed all three over 40 years and I would like to pay tribute to him for all that he achieved in creating and building Record plc. Not only has the business developed from a tiny band located in an office next to Windsor Riverside Station in the early 1980s to one which has AUM of over $100 billion which it manages on behalf of an impressive and demanding range of clients, but it has done so in a manner that reflects the high intellectual standards and personal integrity of its founder. \n   \n The last year has also witnessed the retirement of Leslie Hill as Chief Executive Officer and the impending retirement of Steve Cullen as Chief Financial Officer. Leslie joined the business in 1992 and, for many years, led the sales and business development activities of the Company. Record is fortunate to have retained and served some clients for periods measured in decades rather than years and I believe much of the loyalty from clients has been driven both by the quality of the services provided and the relationships developed and led by Leslie over many years. \n   \n Since taking over as Chief Executive Officer in 2020, Leslie also widened the eyes of the Company with regard to new product and service opportunities, creating opportunities for the new generation of management to take forward. Steve Cullen has also been a magnificent servant of the Company. Having joined in 2003 and taken over as Chief Financial Officer in 2013, he has been an undemonstrative, but calm and sensible voice in the boardroom for many years. To both Leslie and Steve, gratitude is owed by shareholders, Board members and employees alike. \n   \n Dr Jan Witte joined Record in 2012, having completed his mathematics doctorate at Balliol College, Oxford. Since then, he has held various roles in the Company including, in recent times, leading the development of Record Asset Management and being Chief Executive of Record Currency Management. I am delighted that he has stepped up to become the Chief Executive Officer of the Group. Jan has now been joined by Richard Heading, who will succeed Steve Cullen as Chief Financial Officer. Richard has a breadth of experience in sectors and businesses with demands and challenges not dissimilar to Record and I believe that he will bring to the business complementary skills and external experience to support Jan's deep knowledge of Record and its activities. I am confident that, between the two of them, supported by other senior members of the management team, the Company is in safe hands. \n   \n Financial overview \n In his short time to date as Group CEO, Jan has brought renewed clarity to the Group's core product suite and, as previously announced, has also made changes to the IT strategy. The latter, in particular, will underpin operational strength and service quality, and is a major focus for the coming year. \n   \n The Group continues to make progress in its growth plans as evidenced by AUM having almost doubled over the last five years to its new high of over $100 billion, coupled with the successful launch of new products under its Custom Solution suite of asset management products. \n   \n From a financial perspective, we fully expect the impact of the above changes, and others, to be seen over the medium term. However, in the most recent fiscal year, the overall increase in revenues and underlying profitability was more mundane, reflecting the pricing of certain products and the Company's cost base. The year also delivered challenges with some events beyond our control having an unavoidable financial impact; in particular, the unexpected client-side delays in launching some of our new funds. In addition, the decision was also taken to impair £1.9 million of capitalised IT development expenditure towards the end of the financial year. \n   \n In that context, maintaining Group revenue and underlying profitability at the same level as last year is a reasonable achievement, albeit one below our initial expectations. However, looking ahead with a solid pipeline, fund launches planned and AUM at its highest ever level, the Group's trajectory remains positive and is supported by a highly cash-generative business model accompanied by a robust and liquid balance sheet, with total equity of £29.0 million (FY ‑ 23: £28.3 million). \n   \n Further information on financial results can be found in the Financial review section. \n   \n Capital and dividend \n Our capital policy has not changed and aims to ensure retention of capital as required for regulatory and working capital purposes and for investing in new opportunities. Our dividend policy currently targets a level of ordinary dividend within the range of 70% to 90% of annual earnings, which allows for progressive and sustainable dividend growth in line with the trend in profitability. \n   \n Previously, and subject to financial performance and market conditions at the time, the Board has considered returning excess cash to shareholders, usually in the form of special dividends. However, the Board retains the discretion to change these policies as required, either in line with changes in strategy or in response to changing business circumstances. \n   \n In that context, the Board is recommending a final ordinary dividend of 2.45 pence per share (FY ‑ 23: 2.45 pence) with the full-year ordinary dividend at 4.60 pence per share (FY ‑ 23: 4.50 pence), representing a 2.2% increase in the ordinary dividend and an ordinary payout ratio of 82% of underlying earnings. The interim dividend of 2.15 pence was paid on 22 December 2023, and the final ordinary dividend of 2.45 pence will be paid on 2 August 2024 to shareholders on the register at 12 July 2024, subject to shareholder approval. \n   \n Having reviewed the current level of Group capital against its ongoing requirements for regulatory and investment purposes and to support its continued growth and expansion, the Board is announcing a special dividend of 0.6 pence per share to be paid simultaneously with the final ordinary dividend. Total proposed dividends per share for the year are 5.20 pence per share (FY-23: 5.18 pence) compared to underlying earnings per share of 5.60 pence (FY ‑ 23: 5.95 pence). \n   \n The Board \n As noted above, the past year has witnessed substantive changes to the Board and senior management of the Company. Rarely, however, can one note that the Chairman stood down after 40 years, the CEO after 31 years with the Company and the CFO after 21 years. Nevertheless, such changes give rise to management challenges and I would like to take this opportunity to thank my colleagues on the Board and the senior members of the management team for their advice, challenge and support since I took the chair last summer. \n   \n Having expressed an inclination to do so some time ago, but having most helpfully agreed to remain in post to support the process of management change over the past few months, Tim Edwards recently took the decision to stand down from the Board, after six years' service, to give him time to focus on the biotechnology sector. \n   \n I would like to thank Tim for the commitment and counsel he has given to the Board and the management team. \n   \n To succeed Tim, shortly before issuing this report, we were able to announce the appointment of Dr Othman Boukrami as a new Non-executive Director with effect from 1 July 2024. Othman is currently Chief Investment Officer of TCX, the Currency Exchange Fund, having earlier in his career held senior positions in the African Development Group and Citibank. Othman brings highly pertinent sector expertise to the Board and I am delighted that he accepted the invitation to join it. \n   \n I am also pleased that we have appointed Kevin Ayles to the Board in an executive capacity. Kevin has been with Record since 2007 and, in a company that is wholly dependent on the calibre and commitment of its employees, he has played a critical role in developing the strength of the management team in his capacity as Head of Human Resources. Kevin's appointment is both recognition of the contribution he makes to the business and a reflection of the importance of his role to the future of the Company. \n   \n Outlook \n A new senior management team quite rightly takes the opportunity to review the strategic and operational imperatives of a business as well as the environment and markets in which a company is operating. That is a process that is ongoing within Record at present, on which Jan Witte comments in his CEO report, and which will continue during the first half of the current financial year. The focus, in the short term, is on ensuring operational strength and stability along with client satisfaction. \n   \n Taking a medium-term view, I am confident that we have a new generation of senior management in place able to take the Company forward and that we are operating in political and economic conditions that will provide the Company with an opportunity-rich environment both for currency hedging mandates and for alternative asset investments that are not correlated with more conventional asset classes. \n   \n David Morrison \n Chairman \n   \n   \n   \n Chief executive officer's statement \n   \n Since my appointment on 1 April of this year, as a team, we have now crystalised our long-term strategy for growth around some very clear priorities \n   \n Jan Witte   |  Chief Executive Officer \n   \n Revenue \n £45.4m \n +1.6% \n FY-23: £44.7m \n   \n Underlying profit before tax 3 \n £14.8m \n +1.4% \n FY-23: £14.6m \n   \n Overview \n I am proud to have become CEO of Record and consider it a great privilege to be able to both lead and evolve the business going forward, supported by an experienced team of senior colleagues, many of whom have been at Record for ten years or more. \n   \n To put things in context, it is instructive to look back at the transformation the business has seen over the last decade and more specifically in the last couple of years. \n   \n In the period after the financial crisis of 2008/9, Record's product set, while profitable, became somewhat stagnant and, in 2017, fee pressure across the industry was becoming an increasing concern. This highlighted the need for change and, against a backdrop of falling profitability, Leslie Hill, formerly Head of Sales, was appointed CEO in 2020 to introduce fresh thinking and to explore new opportunities for growth. \n   \n Leslie successfully created this younger, more dynamic senior management team across the Group and encouraged a more entrepreneurial mindset to take root. As a result, over the last couple of years, we have proactively developed and explored a number of new possibilities, not all of which we plan to take forward given the need to focus on those areas offering the greatest potential \n   \n Strategy \n Since my appointment on 1 April of this year, the senior management team has been working to crystallise our long ‑ term strategy for growth and we have started by setting some very clear priorities. With a much higher level of strategic clarity, our focus now is firmly on execution and we must get the details right. \n   \n One of the things that has become very clear is that we need to define our positioning in the industry landscape. We now strongly identify (and reinforce this positioning) as a specialist asset manager focused on offering best ‑ in-class products to large global investors. \n   \n Being a specialist is a role that is consistent with our roots, our established product lines, and our more recent expansion into new products. It is also consistent with our culture and the exceptional expertise of many of the people we employ. We don't aspire to, and it is not necessary to, excel at everything; but where we are competing, we aim to provide best ‑ in ‑ class solutions. \n   \n Another quality that makes us unique is our ability to structure and deliver large purpose-built investment solutions. Our size here is key. We are large enough to structure and deliver multi-billion USD mandates, and simultaneously small enough to be nimble and accommodate the unique and often complex detail required to deliver exceptional output for our rightly demanding clients. \n   \n In an increasingly complex world, where rapid technological progress competes for attention with de-globalisation and geopolitical tensions, these purpose-built investment solutions of exceptional quality and the way we can deliver them, are in demand. As testament to that, we now manage more than USD 100 bn for clients worldwide. \n   \n Our client-base continues to comprise institutional investors, pension funds, and foundations. In recent years, we have also attracted an increasing number of international asset managers, which is an exciting development and is now one of the key areas of support and development. \n   \n With teams in London, Zurich, Frankfurt, Amsterdam, and New York, and around 100 employees globally, we have our eyes firmly set on the work that is required to build on our recent AUM milestones and to continue our trajectory of growth. To this end, our energy is now directed towards six distinct product categories where we offer a unique value proposition, and where we can be best-in-class. \n   \n Currency Management, with a renewed focus on core products, comprises: \n   \n ·     Passive Hedging; \n ·     Hedging for Asset Managers \n ·     Dynamic Hedging; and \n ·     FX Alpha (formerly Currency for Return). \n   \n Asset Management, where products require more preparatory work and hence lead times are greater, comprises; \n   \n ·     Emerging Market Debt; and \n ·     Custom Solutions (including Private Credit and Infrastructure Equity). \n   \n We will be heavily focused on this envelope of six core product categories and have created high hurdles for ourselves when it comes to adding new products. \n   \n Our priority is very much \"bigger and better\" in the areas where we are already strong, with the expansion of our range a secondary aim. \n   \n Financial performance \n Group revenue increased by 2% and, on an underlying basis (excluding one-off and exceptional costs), operating profit margin and pre-tax profit were 32% and £14.8 million respectively. Against a difficult backdrop, maintaining these at the same level as in the previous year can be considered a respectable result. \n   \n The underlying financial performance of the Group remains strong. We saw material growth in AUM across both currency and asset management products during the year, which reflects the time and effort of colleagues spent both in maintaining, but also in growing and winning client mandates. \n   \n Consequently, FY-24 saw the Group pass some milestones of note: AUM rose by over 16% to its highest ever level of $102.2 billion, with FY-24 being the fifth consecutive year of positive net inflows. In addition, we launched two funds under our new Custom Solutions suite of asset management products and maintained the high level of performance fees of £5.8 million earned in the previous fiscal year. \n   \n The impairment of the previously capitalised IT-development expenditure of £1.9 million for the R-Platform was announced prior to the year end. \n   \n Whilst disappointing, having taken account of both the scale of improvement delivered over the previous two years plus the future investment required over a prolonged period, the strategic decision was taken to cease further development and to bring future IT infrastructure and development teams in-house. The Board was fully supportive of this decision which we believe will strengthen the Group's ability to develop and deliver our tailored solutions in a more cost-effective way, which can only be in the best interests both of our clients and shareholders. \n   \n Further information on financial results can be found in the Financial review section. \n   \n Outlook \n It's a privilege to be leading the Group and a delight to be working with both superb colleagues and clients who really make every day at Record enjoyable. I am confident that the renewed focus we have on a core suite of six product categories, where our offering and value-add is unique, positions us well for growth in the years ahead. \n   \n Jan Witte \n Chief Executive Officer \n   \n   \n   \n Operating review \n   \n AUM closed the year at its highest ever level of $102.2 billion, including net AUM inflows of $6.8 billion for the year. \n   \n Product investment performance \n Currency Management \n Our hedging products are predominantly systematic in nature. The effectiveness of each client mandate is assessed regularly, and adjustments are made, when necessary, in order to respond to changing market conditions or to bring the risk profile of the hedging mandate in line with the client's risk tolerance. \n   \n Passive Hedging \n Record's enhanced Passive Hedging service aims to reduce the cost of hedging by introducing flexibility into the implementation of currency hedges without changing the hedge ratio. The episodic nature of many opportunities exploited by the strategy means it requires a higher level of discretionary oversight than has historically been associated with Passive Hedging. \n   \n Global markets saw interest rates remain elevated in the first half of FY-24, stemming from hawkish central bank policy to curb the persistent inflationary pressures. Towards the second half of FY-24, inflation prints across major economies showed signs of moderation, alongside slowing GDP growth and employment data. These have had the effect of introducing increased volatility into short-term interest rate markets, from which FX forward pricing is determined. The heightened volatility increased the opportunity set for our clients' portfolios, and as such, we positioned client portfolios appropriately to net add value from this volatility, achieving positive performance. Additionally, the team's management of the portfolio around key market events such as the acquisition of Credit Suisse by UBS, and the consequential liquidity issues, have minimised downside risks versus the fixed-tenor benchmark. \n   \n The table below shows the total value added relative to a fixed-tenor benchmark for an enhanced Passive Hedging programme for a representative account. The base currency used is Swiss francs. \n   \n \n \n \n \n \n \n \n Return for \n \n \n Return \n \n \n \n \n \n \n \n year to \n \n \n since \n \n \n \n \n \n \n \n 31 March 2024 \n \n \n Inception 4 \n \n \n \n \n Value added by enhanced Passive Hedging programme relative to a fixed ‑ tenor benchmark \n \n \n 0.07% \n \n \n 0.10% p.a. \n \n \n \n \n 4.     Since inception in October 2014. \n   \n Dynamic Hedging \n The performance of our Dynamic Hedging product is a function of foreign currency fluctuations relative to the base currency of specific clients. During the year, US investors saw losses from currency on international assets when valuing positions in US dollars, as the US dollar appreciated against the majority of G10 currencies. Record's Dynamic Hedging product adjusted hedge ratios in line with US dollar fluctuations, reducing hedging losses when the US dollar was weaker and helping to protect against currency losses when the US dollar was episodically stronger. As a result, Dynamic Hedging performance was positive, partially offsetting currency losses on the underlying international exposures. Positive hedging performance was largely due to gains made from the Japanese yen hedge, which weakened substantially against the US dollar. \n   \n For non-US accounts, i.e. those where US exposures were hedged to other base currencies, the performance of Dynamic Hedging was opposing over the period given broad US dollar strength and reflected the mandates' specific objectives and/or benchmarks. \n   \n \n \n \n \n \n \n \n Return for \n \n \n Return \n \n \n \n \n \n \n \n year to \n \n \n since \n \n \n \n \n \n \n \n 31 March 2024 \n \n \n Inception 5 \n \n \n \n \n Value added by Dynamic Hedging programme for a representative US-based account \n \n \n 0.67% \n \n \n 0.67% p.a. \n \n \n \n \n 5.     Since inception in April 2009. \n   \n FX Alpha (formerly Currency for Return) \n Currency Multi-Strategy \n Record's Currency Multi-Strategy product combines a number of diversified return streams, which include: \n   \n ·     Forward Rate Bias (\"FRB\"), also known as Carry, or the tendency for high interest rate currencies to outperform low interest rate currencies. \n ·     Value which purchases undervalued currencies and sells overvalued currencies relative currency fair value. \n ·     EM Long/Short which captures returns from relative growth, value and carry opportunities within Emerging Market and Developed Market currencies. \n ·     Developed Market Classification (\"DMC\") which dynamically allocate to various currency factor groups. \n   \n Record's Multi-Strategy mandates delivered positive returns over the period which was driven by outperformance in the EM Long/Short, Carry and DMC strategies, offsetting underperformance in the Value strand. Carry benefited from the low FX volatility environment and stable interest rate differentials. DMC performed positively as its factors were able to pick up some stronger US dollar. The EM strategy saw strong performance on the back of high real interest rates dispersion, resilient domestic economies, and the supportive macro environment, comprising of a continued disinflation trend in major economies. In Value, underperformance was mainly driven by short US dollar and long Japanese yen positions where the Federal Reserve's \"higher for longer\" narrative and continued monetary accommodation in Japan led to depreciation of the yen versus the US dollar. \n   \n \n \n \n \n \n \n \n Return for \n \n \n \n \n \n \n \n \n \n \n \n \n \n year to \n \n \n Return since \n \n \n Volatility since \n \n \n \n \n \n \n \n 31 March 2024 \n \n \n inception \n \n \n inception \n \n \n \n \n Record Multi ‑ Strategy composite 6 \n \n \n 4.65% \n \n \n 1.15% p.a. \n \n \n 3.10% p.a. \n \n \n \n \n 6.     Record Multi-Strategy composite is since inception in July 2012, showing excess returns data gross of fees in USD base, and scaled to a 4% volatility target. \n   \n Asset Management \n EM Debt \n Record EM Sustainable Finance (\"EMSF\") Fund \n The Record EMSF Fund USD class A returned 12.6% from inception (28 June 2021) to 31 March 2024, outperforming the relevant emerging market local debt benchmarks by 20.43%-21.02% (see table below). \n   \n The currency portfolio delivered positive returns during the period on the back of continued outperformance of high carry EM selections despite elevated US treasury yield volatility. Central banks in developed markets progressed with their tightening cycles during FY-24 and adopted a prudent policy tone even after pressures had eased somewhat given second-round inflation risks. Major EM central banks embarked on rate cutting cycles whilst remaining cautious, which supported the asset class through elevated real rate pickup and real currency appreciation, especially in Latin American markets, where local assets also outperformed on the back of US exceptionalism and nearshoring. Valuations were a key driver in the period, particularly in Central and Eastern Europe currency recovery as well due to reduced regional risk premia. The DM funding basket performed positively despite a weaker US dollar on the back of tactical management of the funding basket. \n   \n Bond investments performed positively as well despite notable volatility in global rate markets. Performance was driven by lower rates as the tightening cycle matured and inflationary pressures started to ease. Bond returns benefited from duration extension, as well as diversification into local currency denominated bonds in markets where local rates offered attractive ex-ante risk/return. The peer-to-peer (\"P2P\") portfolio continued to grow in the period as a result of a closer collaboration with the multilateral development banks to support development loans that are denominated in local currency. These innovative and bespoke transactions aim to deliver targeted positive impact that support the development of local currency markets, benefit local communities and mitigate exposure to hard currency by end-borrowers. P2P trade highlights in the period include gender bond transactions denominated in Mongolian tugrik, Azerbaijani manat and Kazakhstani tenge; sustainability bonds to finance green and social projects in Colombia in local currency; and green bonds denominated in Indian rupee to support climate resilience and transition in India. \n   \n The table below shows the performance of the EMSF Fund USD class A and the relevant benchmarks, being the JP Morgan GBI-EM Global Diversified and JP Morgan EMBI Global Diversified. The performance is since inception of the EMSF Fund on 28 June 2021 to 31 March 2024. \n   \n \n \n \n \n \n \n \n Return for \n \n \n Return \n \n \n \n \n \n \n \n year to \n \n \n since \n \n \n \n \n \n \n \n 31 March 2024 \n \n \n inception \n \n \n \n \n EMSF Fund USD Share Class A \n \n \n 7.59% \n \n \n 12.60% \n \n \n \n \n JP Morgan GBI-EM Global Diversified \n \n \n 4.91% \n \n \n (8.42)% \n \n \n \n \n   \n Custom solutions \n Record Diversified GP Stakes \n The first of our Luxembourg funds launched offers access to a portfolio of equity stakes in privately-held asset managers who specialise in private markets - private debt, private equity, private real estate and private infrastructure. \n   \n The fund delivered positive returns to investors in the period. This investment strategy has four key return drivers. The largest contributor to the positive performance was the earned management fees on the GP's existing funds. The other three drivers were either neutral (in the case of enterprise value) or negative (in the case of the crystallise performance fees and the GP-commit). For these last two return drivers to start contributing positively again to the overall fund performance we would need the planned asset exits of the underlying portfolio assets to resume and normalise. \n   \n The fund performed better than industry returns, mainly due to diversification (over 70 GP stakes at the end of March 2024) and the poor correlation of the return drivers to the typical private market returns. \n   \n The table below shows the performance of the Record Diversified GP Stakes class USD A. The performance is since inception of the Record Diversified GP Stakes Fund on 3 April 2023 to 29 December 2023 (the most recent available data). \n   \n \n \n \n \n   \n   \n \n \n Return \n \n \n \n \n \n \n \n since \n \n \n \n \n \n \n \n inception \n \n \n \n \n Record Diversified GP Stakes - USD Share Class A \n \n \n 6.07% \n \n \n \n \n   \n Record Protected Equities \n The second fund we launched combines a multi-factor active global equity approach with a tail risk hedging solution to protect against significant drawdowns. By packaging the strategies of two US-based investment specialists, Record was able to bring to the European market an investment product that wasn't previously available. \n   \n The fund delivered positive returns to investors in the period driven by an overall outperformance of the factor equity strategy (over the passive benchmark). The strong performance of the long global equity strategy fully covered the expense of buying downside protection and still returned over 75bps after fees to investors above the passive benchmark. In general, the period August 2023 to March 2024 was a good period for global equity markets, returning over 10% to investors. \n   \n The table below shows the performance of the Record Protected Equities class USD F and the relevant benchmark, being the MSCI ACWI IMI. The performance is since inception of the Record Protected Equities Fund on 1 August 2023 to 31 March 2024. \n   \n \n \n \n \n \n \n \n Return for \n \n \n Return \n \n \n \n \n \n \n \n period to \n \n \n since \n \n \n \n \n \n \n \n 31 March 2024 \n \n \n inception \n \n \n \n \n Record Protected Equities - USD Share Class F \n \n \n 11.03% \n \n \n 11.03% \n \n \n \n \n MSCI ACWI IMI \n \n \n 10.25% \n \n \n 10.25% \n \n \n \n \n   \n AUM development \n AUM expressed in US dollar terms finished the year at $102.2 billion, an increase of 17% (FY-23: $87.7 billion). When expressed in sterling, AUM increased by 14% to £80.9 billion (FY-23: £71.0 billion). \n   \n AUM development bridges - year to 31 March 2024 \n   \n \n \n \n \n \n \n \n Currency Management \n US $bn \n \n \n Asset Management \n US $bn \n \n \n \n \n AUM at 1 April 2023 \n \n \n 81.4 \n \n \n 6.3 \n \n \n \n \n Net flows \n \n \n 9.0 \n \n \n (2.2) \n \n \n \n \n Equity & other markets \n \n \n 6.7 \n \n \n 0.2 \n \n \n \n \n FX & scaling adjustment \n \n \n 0.4 \n \n \n 0.4 \n \n \n \n \n AUM at 31 March 2024 \n \n \n 97.5 \n \n \n 4.7 \n \n \n \n \n   \n Currency Management AUM movements \n Passive Hedging increased by 20% to $66.0 billion (FY-23: $54.5 billion) driven by net inflows of $7.4 billion for the year from new and existing clients. The impact from market movements and exchange rates was also positive at $3.6 billion and $0.5 billion respectively. \n   \n Hedging for Asset Managers AUM increased to $10.4 billion (FY-23: $9.3 billion) as a result of net inflows of $1.3 billion being partially offset by adverse exchange movements ($0.2 billion). \n   \n Dynamic Hedging AUM increased by 12%, ending the year at $16.5 billion (FY-23: $14.7 billion). The majority of the $1.8 billion increase is attributable to positive market movements of $1.5 billion with net inflows of $0.3 billion. \n   \n FX Alpha AUM increased to $4.5 billion (FY-23: $2.8 billion) by the end of the year, represented predominantly by positive market movements of $1.5 billion. \n   \n Asset Management AUM movements \n Custom Solutions AUM decreased to $3.7 billion (FY-23: $5.2 billion). Net outflows of $2.1 billion are attributable to a $2.4 billion outflow from Multi-product which has been offset by a $0.3 billion inflow following the launch of the two Luxembourg funds. A further partial offset is as a result of favourable exchange rates ($0.4 billion) and market movements ($0.1 billion). \n   \n EM Debt remained broadly level at $1.0 billion (FY-23: $1.1 billion) due to net outflows ($0.1 billion). \n   \n Market performance \n Record's AUM is affected by movements in market levels because substantially all the Passive and Dynamic Hedging, and some of the Multi-product (within Custom Solutions) mandates, are linked to equity, fixed income and other market levels. Market movements increased AUM by $6.9 billion in the year ended 31 March 2024 (FY-23: decrease of $3.8 billion). \n   \n Forex \n Approximately 75% of the Group's AUM is non-US dollar denominated. Therefore, foreign exchange movements may have an impact on AUM when expressing non-US dollar denominated AUM in US dollars. Foreign exchange movements increased AUM by $0.8 billion over the year. This movement does not have an equivalent impact on the sterling value of fee income. \n   \n At 31 March 2024, the split of AUM by base currency was 8% in sterling, 55% in Swiss francs, 25% in US dollars, 8% in euros and 4% in other currencies. \n   \n AUM composition by base currency \n \n \n \n \n \n \n \n 31 March \n \n \n 31 March \n \n \n \n \n Base currency \n \n \n 2024 \n \n \n 2023 \n \n \n \n \n Sterling \n \n \n GBP 6.6bn \n \n \n GBP 7.4bn \n \n \n \n \n US dollar \n \n \n USD 25.4bn \n \n \n USD 20.8bn \n \n \n \n \n Swiss franc \n \n \n CHF 50.9bn \n \n \n CHF 38.3bn \n \n \n \n \n Euro \n \n \n EUR 7.3bn \n \n \n EUR 11.7bn \n \n \n \n \n Australian dollar \n \n \n AUD 5.8bn \n \n \n AUD 3.0bn \n \n \n \n \n Canadian dollar \n \n \n CAD 0.1bn \n \n \n CAD 3.3bn \n \n \n \n \n Japanese yen \n \n \n JPY 42.6bn \n \n \n JPY 27.2bn \n \n \n \n \n   \n Product mix \n AUM composition by product \n \n \n \n \n \n \n \n 31 March 2024 \n \n \n 31 March 2023 \n \n \n \n \n \n \n \n US $bn \n \n \n   \n \n \n US $bn \n \n \n \n \n \n \n \n Currency Management \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Passive Hedging \n \n \n 66.0 \n \n \n 65% \n \n \n 54.5 \n \n \n 64% \n \n \n \n \n Dynamic Hedging \n \n \n 16.5 \n \n \n 16% \n \n \n 14.7 \n \n \n 17% \n \n \n \n \n Hedging for Asset Managers \n \n \n 10.4 \n \n \n 10% \n \n \n 9.3 \n \n \n 11% \n \n \n \n \n FX Alpha \n \n \n 4.5 \n \n \n 4% \n \n \n 2.8 \n \n \n 3% \n \n \n \n \n Cash \n \n \n 0.1 \n \n \n -% \n \n \n 0.1 \n \n \n -% \n \n \n \n \n Total Currency Management AUM \n \n \n 97.5 \n \n \n 95% \n \n \n 81.4 \n \n \n 93% \n \n \n \n \n Asset Management \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Custom Solutions \n \n \n 3.7 \n \n \n 4% \n \n \n 5.2 \n \n \n 6% \n \n \n \n \n EM Debt \n \n \n 1.0 \n \n \n 1% \n \n \n 1.1 \n \n \n 1% \n \n \n \n \n Total Asset Management AUM \n \n \n 4.7 \n \n \n 5% \n \n \n 6.3 \n \n \n 7% \n \n \n \n \n Total AUM \n \n \n 102.2 \n \n \n 100% \n \n \n 87.7 \n \n \n 100% \n \n \n \n \n   \n The product mix has remained broadly consistent with the prior year. With the exception of a switch of mandate by one client from Multi-Product (within Custom Solutions) to Passive Hedging, growth can be seen across the product range predominantly due to a mixture of net inflows of $6.8 billion and market movements of $6.9 billion. \n \n   \n Financial review \n   \n A renewed focus on best-in-class core products and good cost control is expected to deliver an improved quality of earnings over the medium term. \n   \n Steve Cullen   |  Chief Financial Officer \n   \n Revenue \n £45.4m \n +2% \n FY-23: £44.7m \n   \n Management fees \n £38.7m \n +1% \n FY-23: £38.3m \n   \n Underlying operating profit margin 3 \n 32% \n FY-23: 32% \n   \n Overview \n FY-24 has been a busy, somewhat challenging, but productive year for the Group. Changes in the leadership team in line with succession planning, new product launches delivered and further launches expected in FY-25, and the highest ever level of AUM achieved at year end combine to form a robust base upon which the business can continue to grow. \n   \n Strong net AUM inflows of $6.8 billion and solid investment performance, as evidenced by another year of exceptional performance fees, have helped to underpin revenues, albeit set against higher costs associated with investment in technology projects and resources, and the full-year impact from continued inflationary and cost ‑ of-living pressures. \n   \n The underlying performance of the business remains strong. An analysis of the IT strategy linked to the change in Record's leadership prompted the decision to cease any further work with external consultants on the development of the IT platform (\"R-Platform\"), to instead focus on bringing IT development and infrastructure expertise in-house. This will be more efficient and cost ‑ effective in enabling greater focus on near-term projects and enhancements aligned with Record's approach of offering purpose-built investment solutions of exceptional quality. However, as previously announced just prior to the year-end, this decision resulted in the impairment of the R-Platform project and the consequent write down of previously capitalised development costs of £1.9 million and associated reorganisation costs and professional fees of approximately £0.5 million. \n   \n Notwithstanding the strong performance on an underlying basis, the Board exercised its discretion by decreasing the size of the bonus pool linked directly to the Group's financial performance overall, resulting in a reduction to variable remuneration of 42% versus the prior year. \n   \n Whilst the business continues its focus on offering best-in-class products and service across all of its product range, the evolution into a specialist asset manager offering bespoke investment solutions has prompted a change to its reporting structure going forward. Consequently, it has taken the opportunity to re-categorise its revenue streams to more clearly define and differentiate flows between the more traditional currency management business and those new revenue streams associated with the asset management business. This allows for a better understanding of the investment case and the overall value and strength of the business, both for current shareholders and potential investors in future. \n   \n The Group remains independent, cash generative and profitable, supported by its strong and liquid balance sheet. \n   \n Profit and loss (£m) \n \n \n \n \n \n \n \n 2024 \n \n \n 2023 \n \n \n \n \n Revenue \n \n \n 45.4 \n \n \n 44.7 \n \n \n \n \n Cost of sales \n \n \n (0.1) \n \n \n - \n \n \n \n \n Gross profit \n \n \n 45.3 \n \n \n 44.7 \n \n \n \n \n Personnel (excluding bonus) \n \n \n (14.9) \n \n \n (12.8) \n \n \n \n \n Non ‑ personnel costs \n \n \n (11.4) \n \n \n (9.5) \n \n \n \n \n Other income or expense \n \n \n (0.1) \n \n \n (0.3) \n \n \n \n \n Total expenditure (excluding bonus) \n \n \n (26.4) \n \n \n (22.6) \n \n \n \n \n Group Bonus Scheme \n \n \n (4.4) \n \n \n (7.6) \n \n \n \n \n Operating profit (pre impairment of intangible assets) \n \n \n 14.5 \n \n \n 14.5 \n \n \n \n \n Operating profit margin (underlying) \n \n \n 32% \n \n \n 32% \n \n \n \n \n Impairment of intangible assets \n \n \n (1.9) \n \n \n - \n \n \n \n \n Operating profit \n \n \n 12.6 \n \n \n 14.5 \n \n \n \n \n Net interest received \n \n \n 0.3 \n \n \n 0.1 \n \n \n \n \n Profit before tax \n \n \n 12.9 \n \n \n 14.6 \n \n \n \n \n Tax \n \n \n (3.6) \n \n \n (3.3) \n \n \n \n \n Profit after tax \n \n \n 9.3 \n \n \n 11.3 \n \n \n \n \n   \n Revenue - Currency Management \n Record's traditional core currency management revenue derives from the provision of currency and derivative management services, fees for which can be charged through management fee only or management plus performance fee structures. Management fee only mandates are charged based upon the AUM of the product, and management plus performance fee structures include a lower percentage fee applied to AUM, and a proportional share of the specific product performance measured over a defined period. \n   \n Management fees are typically charged on a quarterly basis, although Record may charge fees monthly for some of its larger clients. Performance fees can be charged on quarterly, six-monthly or annual performance periods on the basis agreed with the particular client. \n   \n Revenue - Asset Management \n Asset management revenue has been classified into two categories, being Emerging Market Debt (\"EM Debt\") and Custom Solutions. EM Debt includes the Emerging Market Sustainable Finance (\"EMSF\") strategy, incorporating the EMSF Fund launched back in June 2021. The Custom Solutions revenue category includes management fees from either segregated accounts or funds built to suit client demand, for example the Protected Equity and GP Stakes funds launched in the year. Distribution fees are also received for the introduction of clients into these and other third-party funds. Revenue from future product launches, such as the Infrastructure and Islamic finance products, will also be reported within the Custom Solutions category. The Multi-product strategy, previously included under Currency Management, has been re-categorised under Custom Solutions, reflecting its bespoke nature in combining two or more investment objectives (e.g. both risk-reducing and return-seeking) and hybrid fee rates. \n   \n Similarly to currency management revenue, management fees for Custom Solutions can be charged either monthly or quarterly depending on the structure through which the programme is run. Distribution fees are earned as a percentage of the value invested for the duration of the investment lifecycle. \n   \n Revenue - FY-24 \n Total management fees earned during the year increased marginally to £38.7 million (FY-23: £38.3 million). Performance fees were again reported at £5.8 million, in line with FY-23, although now linked to performance both from FX Alpha (formerly Currency for Return) mandates (£2.9 million, FY-23: £nil) and certain Enhanced Passive Hedging mandates (£2.9 million, FY-23: £5.8 million). Revenue earned from the new asset management products and services totalled £0.5 million (FY-23: £nil). \n   \n Revenue analysis (£m) \n \n \n \n \n \n \n \n Year ended \n \n \n Year ended \n \n \n \n \n \n \n \n 31 March 2024 \n \n \n 31 March 2023 \n \n \n \n \n Management fees \n \n \n   \n \n \n \n \n \n \n \n Currency Management \n \n \n   \n \n \n \n \n \n \n \n Passive Hedging \n \n \n 9.7 \n \n \n 10.5 \n \n \n \n \n Hedging for Asset Managers \n \n \n 2.9 \n \n \n 2.4 \n \n \n \n \n Dynamic Hedging \n \n \n 13.7 \n \n \n 12.0 \n \n \n \n \n FX Alpha \n \n \n 1.3 \n \n \n 1.6 \n \n \n \n \n Total \n \n \n 27.6 \n \n \n 26.5 \n \n \n \n \n Asset Management \n \n \n   \n \n \n \n \n \n \n \n EM Debt - EMSF \n \n \n 4.8 \n \n \n 5.2 \n \n \n \n \n Custom Solutions - Multi-product \n \n \n 6.2 \n \n \n 6.6 \n \n \n \n \n Custom Solutions - Fund management \n \n \n 0.1 \n \n \n - \n \n \n \n \n Total \n \n \n 11.1 \n \n \n 11.8 \n \n \n \n \n Total management fees \n \n \n 38.7 \n \n \n 38.3 \n \n \n \n \n Currency Management - Performance fees \n \n \n 5.8 \n \n \n 5.8 \n \n \n \n \n Asset Management - Distribution fees \n \n \n 0.4 \n \n \n - \n \n \n \n \n Other income \n \n \n 0.5 \n \n \n 0.6 \n \n \n \n \n Total other services income \n \n \n 0.9 \n \n \n 0.6 \n \n \n \n \n Total revenue \n \n \n 45.4 \n \n \n 44.7 \n \n \n \n \n   \n Currency Management fees \n Passive Hedging management fees (including Hedging for Asset Managers) decreased by 2% to £12.6 million (FY ‑ 23: £12.9 million). Total net inflows for FY-24 were reported at +$8.7 billion, however the impact from the timing of net flows over the last 18 months (i.e. net outflows of $3.6 billion for the four quarters to H1-24 were only offset by net inflows of $10 billion in H2-24) resulted in a small decrease to management fees for FY-24. However, we expect this to reverse with the full ‑ year impact from the latter inflows in the current financial year (FY-25). Importantly, whilst Passive Hedging commands a significantly lower average fee rate than Record's other products, it continues to provide a robust and valuable revenue stream from a long-standing, institutional client base, which itself provides potential synergies to the Group in the form of future partnerships and product innovation. More recently, the extension of our core Passive Hedging product for Asset Managers, which provides programmes designed to fit specific liquidity and reporting requirements, has seen growth which we expect to continue in the current financial year (FY-25) and consequently Hedging for Asset Managers revenue will now be reported as a separate Currency Management category. \n   \n Dynamic Hedging management fees increased by 14% to £13.7 million (FY ‑ 23: £12.0 million) predominantly as a result of the full ‑ year impact of the $2.5 billion of net inflows seen in the second half of FY-24, combined with the total net inflows of $0.3 billion in FY-24 from existing clients. \n   \n Management fees from FX Alpha (formerly Currency for Return) mandates decreased by 19% to £1.3 million (FY-23: £1.6 million) broadly arising as a result of the full-year impact from the net outflows of $0.3 billion in the second half of FY-24. \n   \n Asset Management fees \n EM Debt - EMSF \n Management fees arising from the Record EM Sustainable Finance Fund (\"EMSF\") decreased by 8% to £4.8 million (FY-23: £5.2 million). Notwithstanding positive performance for the year, net outflows of $0.1 billion for FY-24 linked to the client's decision to rebalance the portfolio resulted in the reduction to revenue. The EMSF, launched in June 2021, reached its three-year live track record in June 2024 and it is anticipated that this, when combined with its exceptional performance to date and the recent appointment of Andreas Koester to lead Record's EMSF team (as announced in April 2024), will deliver further revenue growth over the next three to five years. \n   \n Custom Solutions - Multi-product \n Multi-product management fees decreased by 6% to £6.2 million (FY-23: £6.6 million). As previously announced in January 2024, one of Record's long-standing clients made the strategic decision towards the end of the third quarter to switch approximately $4 billion of assets under its Multi ‑ product mandate into the lower-margin Passive Hedging product. However, other net inflows of $1.6 billion in H2-24 will offset a proportion of the reduction to Multi ‑ product revenue for FY-25 although the net full-year impact for FY-25 revenue on a like-for-like basis is expected to be a reduction of approximately 50%. \n   \n Custom Solutions - Fund management \n In partnership with other specialist asset managers, Record launched two funds on its Luxembourg fund platform in FY-24: Protected Equities and GP Stakes, which reached an aggregate NAV of $321 million by the end of the year. As expected during the start-up phase, management fees for FY-24 remained fairly low at £0.1 million. However, the launches provide a solid platform from which to expand, and the pipeline of opportunities remains strong both from existing and prospective clients. \n   \n Distribution fees \n Custom Solutions - Liquid Credit Solutions \n In addition to distributing Record's own branded funds, we also work closely with selected external fund managers in the distribution of their funds in Europe and the UK. Distribution fees of $0.4 million were earned in FY-24. \n   \n Performance fees \n Performance fees can be derived from a combination of hedging and return ‑ seeking products. Record's Enhanced Passive Hedging benefited from opportunities to add value arising from continued interest rate differentials, which helped to deliver performance fees of £2.9 million (FY ‑ 23: £5.8 million). Record's FX Alpha product also delivered £2.9 million of performance fees in the year (FY ‑ 23: £nil). Such opportunities for added value on both products are, to a certain extent, market dependent and can therefore be episodic in nature. \n   \n Consequently, the occurrence and scale of future performance fees is dependent on market developments through the current financial year (FY ‑ 25). \n   \n Other income \n Other income totalled £0.5 million (FY-23: £0.6 million) and consists predominantly of fees from ancillary currency management services including collateral management, signal hedging and tactical execution services. Fees charged for these ancillary services are not linked to AUM. \n   \n Expenditure \n Cost of sales \n Cost of sales of £0.1 million (FY-23: £nil) represents third-party commission due on a proportion of revenue earned for certain bespoke mandates utilising AI technology to assist with calculating optimal asset allocations. Due to recent growth in these mandates, we would anticipate a doubling in the commission costs for FY-25. \n   \n Operating expenditure \n The Group operating expenditure (excluding variable remuneration and other expenses) increased by 18% to £26.3 million for the year (FY-23: £22.3 million). \n   \n As expected, the Group has seen increases in personnel costs (excluding bonuses) for the year of approximately 16% linked to a number of factors, including an increase in average headcount of 9% and the continuation of the higher inflationary environment through the year, albeit on the slow downward trajectory. The continuation of a heightened cost of living for our employees has again added pressure for the business to provide support in the form of pay increases, either through one ‑ off cost ‑ of-living allowances or in general pay increases to keep up with market rates of pay. Consequently, cost ‑ of ‑ living payments were made in FY-24 of £2,000 per employee (excluding Executive Directors and Board members), amounting to a total cost of approximately £0.2 million. The Group continues to monitor the situation closely by benchmarking rates of pay in the market to ensure our employees receive the appropriate rate of pay linked to their role and responsibilities. \n   \n Whilst we do not expect to make any further cost-of-living payments, changes made to bring certain roles in line with market rates have been made with effect from April 2024, at a total additional cost in FY-25 of £0.5 million. \n   \n Against this backdrop, salaries and related on-costs (including pensions) increased by 17% to £13.0 million (FY-23: £11.1 million), whilst other employment-related costs associated with the Group's share schemes, including the full-year impact of the new LTIP scheme launched last year, increased by 22% to £1.1 million (FY-23: £0.9 million). Commission paid under the scheme aimed at generating new business remained flat at £0.8 million, broadly in line with the change in year ‑ on-year revenues. \n   \n Similarly, and also as expected, we have seen an increase in non-personnel costs due to the full-year impact of inflationary increases seen throughout FY-23 as well as those incurred in FY-24, albeit at a reduced rate. The continuation of Record's investment into IT systems contributed to the increase, particularly in using external consultants for the development of the R-Platform until the end of FY-24, when the decision to stop the project was taken. As previously announced, a reorganisation programme has already been implemented to restructure the technology team by bringing both development and infrastructure expertise in-house. Whilst this will be additive to FY-25 personnel costs, we anticipate this to be offset by the decrease in non-personnel costs with the advantage of having greater focus for development in key areas identified for near-term and sustainable growth. \n   \n Non-personnel costs, excluding impairment write-downs, increased by 20% during the year to £11.4 million (FY-23: £9.5 million). Increases in professional fees, including insurance, legal and internal and external audit fees, reflect the costs associated with added complexity, expansion and regulatory requirements in the UK and abroad, especially in Germany. \n   \n In the UK, the Group is currently based over two sites in serviced offices in London and a leased office in Windsor. Due to its continued expansion plans, the business will consolidate its UK base to one central London-based office during the current financial year (FY-25). The move will enable the Group to maintain its strong culture and focus on collaborative working, regarded as key for future growth, whilst having the anticipated advantages of improved employee retention and wellbeing and in maintaining high levels of productivity and efficiency. Consequently, the inevitable overlap of office costs during the transitional period will result in an increase in Group occupancy costs of approximately £0.5 million for FY-25, dependent on timing. Following full occupation in the new office and vacating of the current offices, it is expected for annual occupancy costs for the Group to fall back to the current level. \n   \n Costs associated with the winning and servicing of clients, such as marketing, travel and accommodation costs, have increased by approximately 35% linked to a higher preference for more in-person meetings with current and potential clients, as opposed to virtual. \n   \n Notwithstanding more recent decreases in headline inflation, the full year impact of inflationary increases on running costs announced during FY-24 is expected to be felt in the current financial year, FY-25. However, the Group remains conscious of the level of cost increases seen over the last couple of years and consequently of the need for a closer focus on ensuring the business receives value for money on its day-to-day operating costs balanced with ensuring it remains appropriately resourced to achieve its strategic goals. \n   \n Other expenses were £0.1 million for the year (FY-23: £0.3 million) and represent net losses/gains made on derivative financial instruments employed by the Group's hedging activities and other FX adjustments or revaluations. \n   \n Group Bonus Scheme \n The Board retains discretion to operate the bonus pool between 25% to 35% of pre ‑ bonus operating profit and decided to exercise its discretion resulting in a reduction to the bonus pool, linking the Group's financial performance directly to the size of the variable remuneration pool. Consequently, the Group bonus cost has decreased by approximately 42% to £4.4 million (FY-23: £7.6 million), meaning that the underlying operating profit remains at 32%, in line with FY-23. The Group bonus has been calculated at 26% of pre ‑ bonus operating profit (FY-23: 34%). \n   \n Further information on variable remuneration can be found in the Remuneration report. \n   \n Operating profit and underlying profit margin \n Operating profit on an underlying basis (i.e. before impairment write-down) remained flat at £14.5 million (FY-23: £14.5 million), reflecting an underlying operating profit margin of 32%, the same level as for FY-23. However, as a result of the impairment write-down of £1.9 million, on a statutory basis the Group operating profit decreased by 13% to £12.6 million (FY-23: £14.5 million) with the Group operating margin decreasing to 28% (FY-23: 32%). \n   \n Whilst in the medium term it is anticipated that changes to the IT strategy will bring cost efficiencies and improved value for money alongside a more efficient and focused approach to future IT projects, some overlap and the passing over of current IT projects may lead to a short ‑ term decrease in operating margin for FY-25. \n   \n The Group remains confident that, through such cost improvements and with the impact of growth from higher revenue-margin products, it can increase the operating margin over the medium term. \n   \n Cash flow \n The Group's year ‑ end cash and cash equivalents stood at £9.2 million (FY ‑ 23: £9.9 million) and the total assets managed as cash were £17.5 million (FY-23: £14.5 million). The cash generated from operating activities before tax increased by 25% to £16.3 million (FY-23 (restated): £13.0 million). \n   \n During the year, taxation of £3.2 million was paid (FY-23: £2.4 million) and £10.1 million was paid in dividends (FY-23: £9.1 million). The Group did not purchase any of its own shares for the EBT in the year to set against the future vesting of share options (FY-23: £1.8 million) and received net proceeds on the purchases and/or redemption of bonds and investments of £0.8 million (FY-23: net purchases: £1.1 million). \n   \n At the year end, the Group held money market instruments that mature in excess of 30 days after the reporting date worth £8.3 million (FY-23: £4.5 million). These instruments are managed as cash by the Group but are not classified as cash under IFRS rules (see note 19 of the financial statements for more details). \n   \n Dividends \n The FY-24 interim ordinary dividend of 2.15 pence per share (FY-23: 2.05 pence) was paid to shareholders on 22 December 2023, equivalent to £4.1 million. \n   \n The decision to impair previously capitalised development expenditure and to incur a one-off cost of £1.9 million has inevitably depleted the level of earnings by approximately 0.76 pence per share for the year. Notwithstanding this impact, the underlying performance of the business has been strong in FY-24 with a 32% underlying profit margin, high performance fees and the launch of new funds in the year, with further launches anticipated for the current financial year. \n   \n With this in mind, the Board remains confident in the future trajectory of the Group and consequently comfortable with the current dividend policy. As disclosed in the Chairman's statement, the Board is recommending a final ordinary dividend of 2.45 pence per share, equivalent to approximately £4.7 million, taking the overall ordinary dividend for the financial year to 4.60 pence per share. \n   \n Simultaneously, the Board is also paying a special dividend of 0.6 pence equivalent to approximately £1.1 million, making the total dividend in respect of the year ended 31 March 2024 of £9.9 million, equivalent to 93% of total underlying earnings. \n   \n The total ordinary and special dividends paid per share in respect of the prior year ended 31 March 2023 were 4.50 pence and 0.68 pence respectively, equivalent to total dividends of £9.9 million and representing 87% of total earnings per share of 5.95 pence. \n   \n Financial stability and capital management \n The Group's balance sheet is strong and liquid with total net assets of £28.9 million (FY-23: £28.3 million) at the end of the financial year, including current assets managed as cash totalling £17.5 million (FY-23: £14.5 million). The cash generated by the business has increased, with net cash inflows from operating activities after tax of £13.1 million for the year (FY-23: £10.5 million). For further information on cash flows, see the consolidated statement of cash flows of the financial statements. \n   \n Under the Board's capital and dividend policies, the Group can pay up to a maximum of 100% of adjusted earnings for each financial year, thereby ensuring distributions do not erode the continued strength of its balance sheet. \n   \n To this end, the Group maintains a financial model to assist it in forecasting future capital requirements over a three-year cycle under various scenarios and monitors the capital and liquidity positions of the Group on an ongoing basis. The Group has no debt. \n   \n Record Currency Management Limited (\"RCML\") is a UK MiFID investment firm authorised and regulated by the Financial Conduct Authority (\"FCA\") registered as an Investment Adviser with the SEC and as a Commodity Trading Adviser with the CFTC. Record Asset Management GmbH (\"RAM\") is authorised and regulated in Germany by BaFin. RCML, RAM and the Group submit regular capital adequacy returns to the respective regulators and held significant surplus capital resources relative to the regulatory financial resource requirements throughout the year. \n   \n The Board has concluded that the Group is adequately capitalised both to continue its operations effectively and to meet regulatory requirements, due to the size and liquidity of balance sheet resources maintained by the Group. \n   \n Steve Cullen \n Chief Financial Officer \n   \n Cautionary statement \n This Annual Report contains certain forward‑looking statements with respect to the financial condition, results, operations and business of Record. These statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied in this Annual Report. Nothing in this Annual Report should be construed as a profit forecast. \n   \n Directors' responsibility statement pursuant to DTR4 \n   \n The Directors confirm to the best of their knowledge: \n ·      the financial statements have been prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group and Company; and \n ·      the Annual Report includes a fair review of the development and performance of the business and the financial position of the Group and Company, together with a description of the principal risks and uncertainties that they face. \n   \n   \n Consolidated statement of comprehensive income \n   \n Year ended 31 March 2024 \n \n \n \n \n \n \n \n \n \n \n 2024 \n \n \n 2023 \n \n \n \n \n \n \n \n Note \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Revenue \n \n \n 4 \n \n \n 45,378 \n \n \n 44,689 \n \n \n \n \n Cost of sales \n \n \n \n \n \n (82) \n \n \n (37) \n \n \n \n \n Gross profit \n \n \n \n \n \n 45,296 \n \n \n 44,652 \n \n \n \n \n Administrative expenses \n \n \n 5 \n \n \n (30,746) \n \n \n (29,888) \n \n \n \n \n Other expense \n \n \n 5 \n \n \n (15) \n \n \n (293) \n \n \n \n \n Operating profit prior to impairment of intangible assets \n \n \n \n \n \n 14,535 \n \n \n 14,471 \n \n \n \n \n Impairment of intangible assets \n \n \n 11 \n \n \n (1,937) \n \n \n - \n \n \n \n \n Operating profit \n \n \n \n \n \n 12,598 \n \n \n 14,471 \n \n \n \n \n Finance income \n \n \n \n \n \n 394 \n \n \n 182 \n \n \n \n \n Finance expense \n \n \n \n \n \n (81) \n \n \n (55) \n \n \n \n \n Profit before tax \n \n \n \n \n \n 12,911 \n \n \n 14,598 \n \n \n \n \n Taxation \n \n \n 7 \n \n \n (3,658) \n \n \n (3,259) \n \n \n \n \n Profit after tax \n \n \n \n \n \n 9,253 \n \n \n 11,339 \n \n \n \n \n Foreign exchange gains on translation of foreign operations \n \n \n \n \n \n 13 \n \n \n - \n \n \n \n \n Other comprehensive income that may be reclassified subsequently to profit and loss \n \n \n \n \n \n 13 \n \n \n - \n \n \n \n \n Total comprehensive income for the year net of tax \n \n \n \n \n \n 9,266 \n \n \n 11,339 \n \n \n \n \n Profit and total comprehensive income for the year attributable to \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Equity holders of the parent \n \n \n \n \n \n 9,271 \n \n \n 11,339 \n \n \n \n \n Non-controlling interest \n \n \n \n \n \n (5) \n \n \n - \n \n \n \n \n \n \n \n \n \n \n 9,266 \n \n \n 11,339 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Earnings per share for profit attributable to the equity holders of the parent during the year \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Basic earnings per share (pence per share) \n \n \n 8 \n \n \n 4.84 \n \n \n 5.95 \n \n \n \n \n Diluted earnings per share (pence per share) \n \n \n 8 \n \n \n 4.78 \n \n \n 5.81 \n \n \n \n \n The notes below are an integral part of these consolidated financial statements. \n   \n   \n Consolidated statement of financial position \n   \n As at 31 March 2024 \n \n \n \n \n \n \n \n \n \n \n 2024 \n \n \n 2023 \n \n \n \n \n \n \n \n Note \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Non ‑ current assets \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Intangible assets \n \n \n 11 \n \n \n 11 \n \n \n 1,390 \n \n \n \n \n Right ‑ of ‑ use assets \n \n \n 12 \n \n \n 174 \n \n \n 1,011 \n \n \n \n \n Property, plant and equipment \n \n \n 13 \n \n \n 193 \n \n \n 377 \n \n \n \n \n Investments \n \n \n 14 \n \n \n 4,949 \n \n \n 4,901 \n \n \n \n \n Deferred tax assets \n \n \n 16 \n \n \n 168 \n \n \n 134 \n \n \n \n \n Total non ‑ current assets \n \n \n \n \n \n 5,495 \n \n \n 7,813 \n \n \n \n \n Current assets \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Trade and other receivables \n \n \n 17 \n \n \n 13,022 \n \n \n 14,373 \n \n \n \n \n Derivative financial assets \n \n \n 18 \n \n \n 63 \n \n \n 54 \n \n \n \n \n Money market instruments \n \n \n 19 \n \n \n 8,264 \n \n \n 4,549 \n \n \n \n \n Cash and cash equivalents \n \n \n 19 \n \n \n 9,221 \n \n \n 9,948 \n \n \n \n \n Total current assets \n \n \n \n \n \n 30,570 \n \n \n 28,924 \n \n \n \n \n Total assets \n \n \n \n \n \n 36,065 \n \n \n 36,737 \n \n \n \n \n Current liabilities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Trade and other payables \n \n \n 20 \n \n \n (4,930) \n \n \n (6,011) \n \n \n \n \n Corporation tax liabilities \n \n \n 20 \n \n \n (1,865) \n \n \n (1,329) \n \n \n \n \n Provisions \n \n \n 21 \n \n \n (122) \n \n \n - \n \n \n \n \n Lease liabilities \n \n \n 12 \n \n \n (106) \n \n \n (285) \n \n \n \n \n Derivative financial liabilities \n \n \n 18 \n \n \n (9) \n \n \n (5) \n \n \n \n \n Total current liabilities \n \n \n \n \n \n (7,032) \n \n \n (7,630) \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Provisions \n \n \n 21 \n \n \n - \n \n \n (122) \n \n \n \n \n Lease liabilities \n \n \n 12 \n \n \n (79) \n \n \n (694) \n \n \n \n \n Total non-current liabilities \n \n \n \n \n \n (79) \n \n \n (816) \n \n \n \n \n Total net assets \n \n \n \n \n \n 28,954 \n \n \n 28,291 \n \n \n \n \n Equity \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Issued share capital \n \n \n 22 \n \n \n 50 \n \n \n 50 \n \n \n \n \n Share premium account \n \n \n \n \n \n 1,809 \n \n \n 1,809 \n \n \n \n \n Capital redemption reserve \n \n \n \n \n \n 26 \n \n \n 26 \n \n \n \n \n Foreign currency translation reserve \n \n \n \n \n \n 13 \n \n \n - \n \n \n \n \n Retained earnings \n \n \n \n \n \n 27,051 \n \n \n 26,406 \n \n \n \n \n Equity attributable to the equity holders of the parent \n \n \n \n \n \n 28,949 \n \n \n 28,291 \n \n \n \n \n Non-controlling interests \n \n \n \n \n \n 5 \n \n \n - \n \n \n \n \n Total equity \n \n \n \n \n \n 28,954 \n \n \n 28,291 \n \n \n \n \n   \n Approved by the Board on 27 June 2024 and signed on its behalf by: \n   \n David Morrison      Steve Cullen \n Chairman                Chief Financial Officer \n   \n Company registered number: 1927640 \n   \n The notes below are an integral part of these consolidated financial statements. \n   \n   \n Consolidated statement of changes in equity \n   \n Year ended 31 March 2024 \n \n \n \n \n \n \n \n Note \n \n \n Called ‑ up \n share capital \n £'000 \n \n \n Share \n premium \n account \n £'000 \n \n \n Capital \n redemption \n reserve \n £'000 \n \n \n Foreign \n currency \n translation \n reserve \n £'000 \n \n \n Retained \n earnings \n £'000 \n \n \n Equity \n attributable to \n equity holders \n of the parent \n £'000 \n \n \n Non- \n controlling \n interest \n £'000 \n \n \n Total \n equity \n £'000 \n \n \n \n \n As at 1 April 2023 \n \n \n   \n \n \n 50 \n \n \n 1,809 \n \n \n 26 \n \n \n - \n \n \n 26,406 \n \n \n 28,291 \n \n \n - \n \n \n 28,291 \n \n \n \n \n Profit and total comprehensive income for the year \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n 13 \n \n \n 9,258 \n \n \n 9,271 \n \n \n (5) \n \n \n 9,266 \n \n \n \n \n Non-controlling interest acquired in subsidiaries \n \n \n \n \n \n   \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 10 \n \n \n 10 \n \n \n \n \n Dividends paid \n \n \n 9 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (10,113) \n \n \n (10,113) \n \n \n - \n \n \n (10,113) \n \n \n \n \n Own shares acquired by EBT \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1,266) \n \n \n (1,266) \n \n \n - \n \n \n (1,266) \n \n \n \n \n Release of shares held by EBT \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 2,584 \n \n \n 2,584 \n \n \n - \n \n \n 2,584 \n \n \n \n \n Tax on share-based payments \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (86) \n \n \n (86) \n \n \n - \n \n \n (86) \n \n \n \n \n Other share-based payment reserve movements \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 268 \n \n \n 268 \n \n \n - \n \n \n 268 \n \n \n \n \n Transactions with shareholders \n \n \n   \n \n \n   \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (8,613) \n \n \n (8,613) \n \n \n 10 \n \n \n (8,603) \n \n \n \n \n As at 31 March 2024 \n \n \n   \n \n \n 50 \n \n \n 1,809 \n \n \n 26 \n \n \n 13 \n \n \n 27,051 \n \n \n 28,949 \n \n \n 5 \n \n \n 28,954 \n \n \n \n \n   \n Year ended 31 March 2023 \n \n \n \n \n \n \n \n Note \n \n \n Called ‑ up \n share capital \n £'000 \n \n \n Share \n premium \n account \n £'000 \n \n \n Capital \n redemption \n reserve \n £'000 \n \n \n Foreign \n currency \n translation \n reserve \n £'000 \n \n \n Retained \n earnings \n £'000 \n \n \n Equity \n attributable to \n equity holders \n of the parent \n £'000 \n \n \n Non- \n controlling \n interest \n £'000 \n \n \n Total \n equity \n £'000 \n \n \n \n \n As at 1 April 2022 \n \n \n \n \n \n 50 \n \n \n 1,809 \n \n \n 26 \n \n \n - \n \n \n 24,045 \n \n \n 25,930 \n \n \n - \n \n \n 25,930 \n \n \n \n \n Profit and total comprehensive income for the year \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 11,339 \n \n \n 11,339 \n \n \n - \n \n \n 11,339 \n \n \n \n \n Dividends paid \n \n \n 9 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (9,095) \n \n \n (9,095) \n \n \n - \n \n \n (9,095) \n \n \n \n \n Own shares acquired by EBT \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (3,572) \n \n \n (3,572) \n \n \n - \n \n \n (3,572) \n \n \n \n \n Release of shares held by EBT \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 2,268 \n \n \n 2,268 \n \n \n - \n \n \n 2,268 \n \n \n \n \n Tax on share-based payments \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 300 \n \n \n 300 \n \n \n - \n \n \n 300 \n \n \n \n \n Other share-based payment reserve movements \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1,121 \n \n \n 1,121 \n \n \n - \n \n \n 1,121 \n \n \n \n \n Transactions with shareholders \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (8,978) \n \n \n (8,978) \n \n \n - \n \n \n (8,978) \n \n \n \n \n As at 31 March 2023 \n \n \n \n \n \n 50 \n \n \n 1,809 \n \n \n 26 \n \n \n - \n \n \n 26,406 \n \n \n 28,291 \n \n \n - \n \n \n 28,291 \n \n \n \n \n The notes below are an integral part of these consolidated financial statements. \n   \n   \n Consolidated statement of cash flows \n   \n Year ended 31 March 2024 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n Restated 1 \n \n \n \n \n \n \n \n \n \n \n 2024 \n \n \n 2023 \n \n \n \n \n \n \n \n Note \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Net cash inflow from operating activities \n \n \n 26 \n \n \n 13,055 \n \n \n 10,541 \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Purchase of intangible assets \n \n \n 11 \n \n \n (789) \n \n \n (964) \n \n \n \n \n Purchase of property, plant and equipment \n \n \n 13 \n \n \n (29) \n \n \n (272) \n \n \n \n \n Purchase of investments \n \n \n 14 \n \n \n (1,080) \n \n \n (3,570) \n \n \n \n \n Redemption of bonds \n \n \n 14 \n \n \n 753 \n \n \n 1,607 \n \n \n \n \n Redemption of other investments \n \n \n 14 \n \n \n 1,144 \n \n \n 881 \n \n \n \n \n (Purchase)/disposal of money market instruments \n \n \n \n \n \n (3,715) \n \n \n 9,363 \n \n \n \n \n Interest received \n \n \n \n \n \n 360 \n \n \n 181 \n \n \n \n \n Net cash (outflow)/inflow from investing activities \n \n \n \n \n \n (3,356) \n \n \n 7,226 \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Lease principal payments \n \n \n 12 \n \n \n (288) \n \n \n (315) \n \n \n \n \n Lease interest payments \n \n \n 12 \n \n \n (33) \n \n \n (55) \n \n \n \n \n Purchase of own shares 7 \n \n \n 33 \n \n \n - \n \n \n (1,850) \n \n \n \n \n Dividends paid to equity shareholders \n \n \n 9 \n \n \n (10,113) \n \n \n (9,095) \n \n \n \n \n Net cash outflow from financing activities \n \n \n \n \n \n (10,434) \n \n \n (11,315) \n \n \n \n \n Net increase/(decrease) in cash and cash equivalents in the year \n \n \n \n \n \n (735) \n \n \n 6,452 \n \n \n \n \n Exchange gains \n \n \n \n \n \n 8 \n \n \n 151 \n \n \n \n \n Cash and cash equivalents at the beginning of the year \n \n \n \n \n \n 9,948 \n \n \n 3,345 \n \n \n \n \n Cash and cash equivalents at the end of the year \n \n \n \n \n \n 9,221 \n \n \n 9,948 \n \n \n \n \n Closing cash and cash equivalents consist of: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cash \n \n \n \n \n \n 4,954 \n \n \n 6,405 \n \n \n \n \n Cash equivalents \n \n \n \n \n \n 4,267 \n \n \n 3,543 \n \n \n \n \n Cash and cash equivalents \n \n \n 19 \n \n \n 9,221 \n \n \n 9,948 \n \n \n \n \n 7.     See note 33 for details of the presentational adjustment resulting in the restatement of prior year amounts. \n   \n The notes below are an integral part of these consolidated financial statements. \n   \n   \n Company statement of financial position \n   \n As at 31 March 2024 \n \n \n \n \n \n \n \n \n \n \n 2024 \n \n \n 2023 \n \n \n \n \n \n \n \n Note \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Non ‑ current assets \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Right ‑ of ‑ use assets \n \n \n 12 \n \n \n 68 \n \n \n 871 \n \n \n \n \n Property, plant and equipment \n \n \n \n \n \n 70 \n \n \n 99 \n \n \n \n \n Investments \n \n \n 14 \n \n \n 10,843 \n \n \n 9,062 \n \n \n \n \n Total non ‑ current assets \n \n \n \n \n \n 10,981 \n \n \n 10,032 \n \n \n \n \n Current assets \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Corporation tax \n \n \n \n \n \n 195 \n \n \n 16 \n \n \n \n \n Trade and other receivables \n \n \n 17 \n \n \n 711 \n \n \n 2,428 \n \n \n \n \n Cash and cash equivalents \n \n \n 19 \n \n \n 214 \n \n \n 213 \n \n \n \n \n Total current assets \n \n \n \n \n \n 1,120 \n \n \n 2,657 \n \n \n \n \n Total assets \n \n \n \n \n \n 12,101 \n \n \n 12,689 \n \n \n \n \n Current liabilities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Trade and other payables \n \n \n 20 \n \n \n (7,176) \n \n \n (4,955) \n \n \n \n \n Lease liabilities \n \n \n 12 \n \n \n (71) \n \n \n (251) \n \n \n \n \n Provisions \n \n \n 21 \n \n \n (122) \n \n \n - \n \n \n \n \n Total current liabilities \n \n \n \n \n \n (7,369) \n \n \n (5,206) \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Lease liabilities \n \n \n 12 \n \n \n - \n \n \n (583) \n \n \n \n \n Deferred tax liabilities \n \n \n \n \n \n (124) \n \n \n (11) \n \n \n \n \n Provisions \n \n \n 21 \n \n \n - \n \n \n (122) \n \n \n \n \n Total non-current liabilities \n \n \n \n \n \n (124) \n \n \n (716) \n \n \n \n \n Total net assets \n \n \n \n \n \n 4,608 \n \n \n 6,767 \n \n \n \n \n Equity \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Issued share capital \n \n \n 22 \n \n \n 50 \n \n \n 50 \n \n \n \n \n Share premium account \n \n \n \n \n \n 1,809 \n \n \n 1,809 \n \n \n \n \n Capital redemption reserve \n \n \n \n \n \n 26 \n \n \n 26 \n \n \n \n \n Retained earnings \n \n \n \n \n \n 2,723 \n \n \n 4,882 \n \n \n \n \n Total equity \n \n \n \n \n \n 4,608 \n \n \n 6,767 \n \n \n \n \n   \n The Company's total comprehensive income for the year (which is principally derived from intra-group dividends) was £6,809,523 (2023: £10,614,915). \n   \n Approved by the Board on 27 June 2024 and signed on its behalf by: \n   \n David Morrison      Steve Cullen \n Chairman                Chief Financial Officer \n   \n Company registered number: 1927640 \n   \n The notes below are an integral part of these consolidated financial statements. \n   \n   \n Company statement of changes in equity \n   \n Year ended 31 March 2024 \n \n \n \n \n \n \n \n Note \n \n \n Called ‑ up \n share capital \n £'000 \n \n \n Share \n premium \n  account \n £'000 \n \n \n Capital \n redemption \n  reserve \n £'000 \n \n \n Retained \n earnings \n £'000 \n \n \n Total \n shareholders' \n equity \n £'000 \n \n \n \n \n As at 1 April 2023 \n \n \n   \n \n \n 50 \n \n \n 1,809 \n \n \n 26 \n \n \n 4,882 \n \n \n 6,767 \n \n \n \n \n Profit and total comprehensive income for the year \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n 6,810 \n \n \n 6,810 \n \n \n \n \n Dividends paid \n \n \n 9 \n \n \n - \n \n \n - \n \n \n - \n \n \n (10,113) \n \n \n (10,113) \n \n \n \n \n Share option reserve movement \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n 1,144 \n \n \n 1,144 \n \n \n \n \n Transactions with shareholders \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n (8,969) \n \n \n (8,969) \n \n \n \n \n As at 31 March 2024 \n \n \n   \n \n \n 50 \n \n \n 1,809 \n \n \n 26 \n \n \n 2,723 \n \n \n 4,608 \n \n \n \n \n   \n Year ended 31 March 2023 \n \n \n \n \n \n \n \n Note \n \n \n Called ‑ up \n share capital \n £'000 \n \n \n Share \n premium \n  account \n £'000 \n \n \n Capital \n redemption \n  reserve \n £'000 \n \n \n Retained \n earnings \n £'000 \n \n \n Total \n shareholders' \n equity \n £'000 \n \n \n \n \n As at 1 April 2022 \n \n \n \n \n \n 50 \n \n \n 1,809 \n \n \n 26 \n \n \n 2,446 \n \n \n 4,331 \n \n \n \n \n Profit and total comprehensive income for the year \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n 10,615 \n \n \n 10,615 \n \n \n \n \n Dividends paid \n \n \n 9 \n \n \n - \n \n \n - \n \n \n - \n \n \n (9,095) \n \n \n (9,095) \n \n \n \n \n Share option reserve movement \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n 916 \n \n \n 916 \n \n \n \n \n Transactions with shareholders \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n (8,179) \n \n \n (8,179) \n \n \n \n \n As at 31 March 2023 \n \n \n \n \n \n 50 \n \n \n 1,809 \n \n \n 26 \n \n \n 4,882 \n \n \n 6,767 \n \n \n \n \n The notes below are an integral part of these consolidated financial statements. \n   \n   \n Company statement of cash flows \n   \n Year ended 31 March 2024 \n \n \n \n \n \n \n \n \n \n \n 2024 \n \n \n 2023 \n \n \n \n \n \n \n \n Note \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Net cash inflow from operating activities \n \n \n 26 \n \n \n 1,555 \n \n \n 2,166 \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Dividends received \n \n \n \n \n \n 7,700 \n \n \n 10,500 \n \n \n \n \n Purchase of property, plant and equipment \n \n \n \n \n \n - \n \n \n (116) \n \n \n \n \n Investment in equity reserve of subsidiary \n \n \n \n \n \n - \n \n \n (1,095) \n \n \n \n \n Purchase of investments \n \n \n \n \n \n (13) \n \n \n (1,869) \n \n \n \n \n Redemption of investments \n \n \n \n \n \n 1,144 \n \n \n - \n \n \n \n \n Interest received \n \n \n \n \n \n 8 \n \n \n 1 \n \n \n \n \n Net cash inflow from investing activities \n \n \n \n \n \n 8,839 \n \n \n 7,421 \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Lease principal payments \n \n \n 12 \n \n \n (253) \n \n \n (280) \n \n \n \n \n Lease interest payments \n \n \n 12 \n \n \n (27) \n \n \n (43) \n \n \n \n \n Dividends paid to equity shareholders \n \n \n 9 \n \n \n (10,113) \n \n \n (9,095) \n \n \n \n \n Net cash outflow from financing activities \n \n \n \n \n \n (10,393) \n \n \n (9,418) \n \n \n \n \n Net increase in cash and cash equivalents in the year \n \n \n \n \n \n 1 \n \n \n 170 \n \n \n \n \n Exchange losses \n \n \n \n \n \n - \n \n \n - \n \n \n \n \n Cash and cash equivalents at the beginning of the year \n \n \n \n \n \n 213 \n \n \n 43 \n \n \n \n \n Cash and cash equivalents at the end of the year \n \n \n \n \n \n 214 \n \n \n 213 \n \n \n \n \n Closing cash and cash equivalents consist of: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cash \n \n \n \n \n \n 214 \n \n \n 213 \n \n \n \n \n Cash equivalents \n \n \n 19 \n \n \n - \n \n \n - \n \n \n \n \n Cash and cash equivalents \n \n \n 19 \n \n \n 214 \n \n \n 213 \n \n \n \n \n The notes below are an integral part of these consolidated financial statements. \n   \n   \n Notes to the financial statements for the year ended 31 March 2024 \n   \n 1. Accounting policies \n In order to provide more clarity to the notes to the financial statements, accounting policy descriptions appear at the beginning of the note to which they relate. \n   \n The material accounting policies adopted in the preparation of these consolidated financial statements are set out in the notes below. These policies have been consistently applied to all periods presented unless otherwise stated. \n   \n 1.1 Basis of preparation \n The Group financial statements have been prepared in accordance with UK adopted international accounting standards and the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The financial statements have been prepared on a going concern basis. \n   \n The financial statements have been prepared on a historical cost basis, modified to include fair valuation of derivative financial instruments. Investments are measured at fair value through profit or loss. \n   \n The accounting policies have been applied consistently to all periods presented in these financial statements and by all Group entities, unless otherwise stated. The financial statements of subsidiary undertakings are coterminous with those of Record plc, referred to as the \"Company\". \n   \n 1.2 Changes to international accounting policies \n The following amendments and interpretations became effective during the year. Their adoption has not had any significant impact on the Group. \n   \n \n \n \n \n \n \n \n \n \n \n Effective from \n \n \n \n \n IAS 1 \n \n \n Presentation of Financial Statements (Amendments) \n \n \n 1 January 2023 \n \n \n \n \n IAS 8 \n \n \n Accounting Policies, Changes in Accounting Estimates and Errors (Amendments) \n \n \n 1 January 2023 \n \n \n \n \n   \n The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective at the year-end date. \n   \n 1.3 Basis of consolidation \n The consolidated financial information contained within the financial statements incorporates financial statements of the Company, its subsidiaries and share in the results of its joint ventures drawn up to 31 March 2024. \n   \n Subsidiaries are entities controlled by the Company and are included from the date that control commences until the date that control ceases. Control is achieved where the Company is exposed to, or has rights over, variable returns from its involvement with the entity and it has the power to affect those returns. \n   \n The Record plc Employee Benefit Trust (\"EBT\") has been established for the purpose of satisfying certain share-based awards. As the Group has \"de facto\" control over this special purpose entity, the trust is fully consolidated within the financial statements. The movements in the EBT are disclosed in the statement of changes in equity as own shares acquired and released by the EBT. This includes net settlements, through which employees have the option to sell back shares to cover the exercise price and tax liabilities arising as a result of exercising share awards. As the amounts are netted off, there are no cash movements. \n   \n Joint ventures are entities in which the Group has an investment where it has contractually agreed to share control of the business and where the major decisions require the unanimous consent of the joint partners. The results, as well as the assets and liabilities of joint ventures, are incorporated in the consolidated financial statements using the equity method of accounting. The Group's share of post-tax profits or losses is recognised in the consolidated statement of comprehensive income. \n   \n All intra ‑ group transactions, balances, income, expenses and dividends are eliminated on consolidation. \n   \n The Company is taking advantage of the exemption under the Companies Act 2006 s408(1) not to present its individual statement of comprehensive income and related notes that form part of the financial statements. The Company and its subsidiaries are collectively referred to as the \"Group\"; the Group's total comprehensive income for the year includes a profit of £6,809,523 attributable to the Company (FY-23: £10,614,915). The Company's principal activity is that of a holding company. \n   \n 1.4 Going concern \n The Directors are satisfied that the Company and the Group have adequate resources with which to continue to operate for the foreseeable future. In arriving at this conclusion, the Directors have considered various assessments including capital and liquidity positions, the current economic and geopolitical environment and the market in which the Group operates, and its stakeholders. These assessments show that the Group should be able to operate at adequate levels of both liquidity and capital for at least twelve months from the date of signing this report. \n   \n Consequently, the Directors have reasonable expectation that the Group has adequate financial resources to continue operations for at least twelve months from the date of signing the report, and therefore have continued to adopt the going concern basis in preparing the financial statements. \n   \n 1.5 Foreign currencies \n The financial statements are presented in sterling (£), which is the functional currency of the parent company. Foreign currency transactions are translated into the functional currency of the parent company using prevailing exchange rates which are updated on a monthly basis. Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items at year ‑ end exchange rates are recognised in the statement of comprehensive income under \"other income or expense\". \n   \n The functional currency of Record Asset Management GmbH and RAM Strategies GmbH has changed from sterling to euro, due to changes in their economic environment as they begin to generate revenue. The change in functional currency of these subsidiaries has been applied prospectively from 1 January 2024. On consolidation, the results of foreign operations are translated into sterling at rates approximating to those when the transactions took place. The assets and liabilities of foreign operations are translated at the period-end spot rate. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at monthly average rate are recognised in other comprehensive income, and accumulated in the foreign currency translation reserve. \n   \n 1.6 Financial instruments \n Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. \n   \n 1.7 Impairment of assets \n The Group assesses whether there is any indication that any of its assets have been impaired at least annually. If such an indication exists, the asset's recoverable amount is estimated and compared to its carrying value. \n   \n An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. Impairment losses are recognised in profit or loss. \n   \n 1.8 Segmental reporting \n Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the Group's Chief Operating Decision Maker (\"CODM\") in order to allocate resources to the segments and to assess their performance. The CODM is considered to be the Board of Directors. \n   \n As a result of the diversification and growth of the Group's operations into asset management, the Group has identified two reportable segments: Currency Management and Asset Management. \n   \n 2. Critical accounting estimates and judgements \n The preparation of the financial statements in accordance with IFRS requires management to make accounting estimates and judgements that affect the application of the Group's accounting policies and reported amounts. \n   \n The estimates and associated assumptions are based on historical experience and various other factors including expectations of future events that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. As a consequence, actual results may differ from these estimates. \n   \n The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. \n   \n The key areas involving estimates and judgements have been set out below, and detailed further within the respective notes: \n   \n \n \n \n \n Area \n \n \n Note \n \n \n Related estimates and judgements \n \n \n \n \n Impairment of assets \n \n \n 1.7, 11 \n \n \n Impairment indicators and recoverable amounts \n \n \n \n \n Intangible assets \n \n \n 11 \n \n \n Qualifying expenditure and amortisation \n \n \n \n \n Leases \n \n \n 12 \n \n \n Discount rate \n \n \n \n \n Provisions \n \n \n 21 \n \n \n Consideration required to settle future obligations \n \n \n \n \n Share-based payments \n \n \n 16, 23 \n \n \n Fair value of share options and related deferred tax \n \n \n \n \n Fair value of investments \n \n \n 25 \n \n \n Valuation methodology and inputs, and input level allocation \n \n \n \n \n Basis of consolidation \n \n \n  28 \n \n \n Interests in unconsolidated structured entities \n \n \n \n \n   \n 3. Segmental analysis \n The Board and management team of the Group are beginning to organise and report on the performance of the business by Currency Management and Asset Management segments. This will recognise both the current and anticipated future growth in revenues as well as the difference in contribution and risk levels across both segments. \n   \n The Currency Management segment comprises bespoke solutions to clients including Passive Hedging, Dynamic Hedging, Hedging for Asset Managers, and FX Alpha products. \n   \n The Asset Management segment principally comprises investment management services for products including EM debt and Custom Solutions. \n   \n 3.1 Operating segments \n The majority of activities and revenues in FY-24 are derived from operations within the Currency Management segment. However, with further product launches and continued interest from clients anticipated in the Asset Management segment, the expectation is for this segment to become more significant in the future. \n   \n Operating profit per segment is not presented, as such information is not presented on a regular basis to the Group's CODM. Therefore, for FY-24, these are not yet considered to be operating segments. The operating segmental information will, however, be presented to the Group's CODM from FY-25 onwards, thus transitioning these segments into operating segments. \n   \n For FY-24, only revenue is reviewed by the CODM. Currency Management revenue totalled £33.9 million for the period, and Asset Management revenue totalled £11.5 million for the period. Note 4 provides further detail on this. \n   \n 3.2 Segment assets and liabilities \n Segment assets and liabilities are not presented, as such information is not presented on a regular basis to the Group's CODM. \n   \n 4. Revenue \n Revenue comprises the fair...

View stock analysis, news, and events for Record Plc