| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 48.94 | -16 |
| Intrinsic value (DCF) | 21.27 | -63 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 0.01 | -100 |
Record plc (LSE: REC.L) is a UK-based specialist currency and derivative management firm serving institutional investors globally. Founded in 1983 and headquartered in Windsor, the company provides tailored solutions including currency hedging, asset management, and derivatives overlays to pension funds, asset managers, and foundations. Operating across the UK, North America, Europe, and Australia, Record plc distinguishes itself through its niche expertise in mitigating foreign exchange risks for clients with international exposures. As part of the broader financial services sector, the firm plays a critical role in helping institutional investors navigate volatile currency markets. With a market cap of ~£104 million, Record maintains a focused operational model, distributing services through direct sales and investment consultants. The company's asset-light structure and recurring revenue streams from currency management services position it as a unique player in the asset management industry.
Record plc presents a specialized investment case with its pure-play focus on institutional currency risk management – a service with steady demand given globalized investment portfolios. The company demonstrates financial stability with £9.2m net cash position, consistent profitability (FY24 net income: £9.3m), and strong cash conversion (operating cash flow at 141% of net income). A 5p/share dividend reflects management's capital return priorities. However, the niche business model carries concentration risks – revenue depends on institutional FX hedging needs and AUM volatility. The modest beta (0.82) suggests lower market correlation than broader financial services, but growth may be constrained by the specialized market size. Investors should weigh the firm's profitability against limited scalability in this specialized segment.
Record plc occupies a unique position as one of few publicly traded firms specializing exclusively in institutional currency management. Its competitive advantage stems from 40+ years of FX risk management expertise, proprietary hedging strategies, and sticky client relationships with pension funds. Unlike traditional asset managers, Record doesn't compete on investment performance but rather on reducing currency volatility – a cost-center function for clients. This creates defensive revenue streams but limits upside. The firm's small size allows customization that larger multi-strategy asset managers cannot match in currency solutions. However, it faces pressure from both sides: 1) In-house treasury teams at mega pension funds internalizing FX management, and 2) Bulge-bracket banks offering bundled currency services with prime brokerage. Record differentiates through transparency (no proprietary trading) and independent advice, though technology investments by competitors in algorithmic FX hedging could erode this edge over time. The firm's ~£450m revenue scale makes it a potential acquisition target for larger asset servicers seeking currency capabilities.