Record plc (LON:REC) has entered its new financial year with encouraging momentum after reporting stronger-than-expected net inflows and a notable increase in assets under management.
According to the latest research note from Panmure Liberum, Record’s assets under management equivalent, or AUME, reached $122 billion at the end of June 2026. This was comfortably ahead of the broker’s estimate of $116.4 billion and represented an increase from $114.6 billion at the end of March.
The quarter included net inflows of $2.3 billion, materially above Panmure Liberum’s forecast of $0.4 billion. It was also the fourth consecutive quarter in which Record recorded positive inflows.
Favourable market movements added a further $5.4 billion to assets during the period, compared with the broker’s estimate of $1.4 billion. Foreign exchange movements reduced the total by $0.3 billion.
Research Analyst Abid Hussain said: “Management has entered the new financial year with momentum.”
The analyst believes the update demonstrates the continuing strength of Record’s core foreign exchange and hedging operations. These activities remain the main contributors to asset growth and client flows, while newer areas such as Solutions for Asset Managers and the Infrastructure Equity Fund are beginning to contribute to the company’s development in higher-margin services.
Record plc First-Quarter Highlights
- Assets under management equivalent reached $122 billion at 30 June 2026.
- Net inflows totalled $2.3 billion during the quarter.
- Record achieved a fourth consecutive quarter of positive inflows.
- Market movements added $5.4 billion to assets.
- All three reporting segments delivered positive net flows.
- Risk Management assets increased to $98.7 billion.
- Absolute Return assets rose to $4.4 billion.
- Private Markets assets increased to $18.9 billion.
- Panmure Liberum retained its Buy rating and 120p target price.
Positive Contributions Across the Business
Record’s quarterly inflows were spread across all three of its reporting segments.
Risk Management generated net inflows of $0.7 billion, while Absolute Return added $0.6 billion. Private Markets recorded $1 billion of inflows during the quarter.
Panmure Liberum highlighted continued momentum in Passive Hedging and Solutions for Asset Managers. The latter was described as a standout area after generating $2.6 billion of flows during the 2026 financial year.
The broker estimates that Solutions for Asset Managers contributed the majority of the $1 billion flowing into Private Markets during the latest quarter. A new mandate secured by Record’s higher-margin FX Alpha division was also described as encouraging.
These results indicate that the company is making progress both within its established hedging franchise and in the specialist products it has developed for existing clients.
Progress in Higher-Margin Services
Record has been broadening its business towards funds and services offering higher revenue margins, using its experience in product design and the structuring of bespoke investment solutions.
Panmure Liberum noted that this expansion has come in response to requests from existing clients, rather than taking the company into areas outside its established expertise.
Deployment activity in the Infrastructure Equity Fund continued during the first quarter. Undeployed commitments increased to $1.2 billion from $1.1 billion at the end of March, even as capital continued to be invested.
The broker believes Record is also improving the quality of its revenue base by working with smaller clients that require more tailored services. These relationships can support a more dependable and higher-margin fee base, although the financial benefits are not yet fully visible in the headline results.
The costs associated with building these capabilities are already included in Panmure Liberum’s forecasts. This means there could be scope for operational leverage as the newer mandates begin to contribute more fully to revenue.
Forecasts Raised Following Stronger Assets
Following the better-than-expected flows and market performance, Panmure Liberum increased its AUME forecasts for the 2027 financial year and later periods by around 5%.
The broker now expects Record to finish the year ending March 2027 with AUME of $124.5 billion, compared with its previous estimate of $118.8 billion.
The expected benefit to earnings per share is more modest, at around 2.5%, because much of the positive market movement occurred in Passive Hedging, which carries a lower revenue margin.
Panmure Liberum also noted that approximately £4 million of annualised revenue from new mandates, previously identified alongside Record’s 2026 results, has not yet appeared in the profit and loss account. This could provide an additional contribution once those mandates begin generating revenue.
Record plc Financial Forecasts
Panmure Liberum forecasts total revenue of £44.8 million for the year ending March 2027, up from £39.9 million in 2026. Reported operating profit is expected to rise slightly from £10 million to £10.2 million.
For the 2028 financial year, revenue is forecast to increase to £48.2 million, with operating profit reaching £12.4 million. The operating margin is expected to improve from 23% in 2027 to 26% in 2028.
Adjusted earnings per share are forecast at 4.0p for 2027, rising to 4.9p in 2028 and 5.2p in 2029. The ordinary dividend is forecast at 2.9p for 2027, followed by 3.5p in 2028 and 3.7p in 2029.
The balance sheet also remains an important part of the investment case. Record held £13 million in cash and cash equivalents, alongside £3.5 million of investments. Panmure Liberum forecasts cash and cash equivalents rising to £17 million in 2027 and £22 million in 2028.
Valuation Remains Supportive
Panmure Liberum retained its Buy recommendation and target price of 120p. This compares with the 43.4p share price recorded at the close of trading on 22 July 2026.
The broker expects Record to trade on a price-to-earnings ratio of 10.9 times for the 2027 financial year, falling to 9.0 times in 2028 and 8.5 times in 2029.
Assuming a payout ratio of around 70%, Panmure Liberum estimates that the dividend yield could reach approximately 8% in the 2028 financial year.
Final Thoughts
Record plc’s first-quarter update showed broad-based progress, with all three reporting segments contributing positive flows and total assets finishing well ahead of expectations.
The established foreign exchange and hedging business remains central to the company, while newer services are beginning to demonstrate their potential. Continued progress in Solutions for Asset Managers, FX Alpha and infrastructure investment could gradually improve the quality and margin of Record’s revenue base.
