Record PLC (LSE:REC) has reported a 3% drop in turnover and a slump in profits as performance fees sharply declined in the first half.
The specialist currency and asset manager also announced that chief executive officer Leslie Hill will retire at the end of the financial year and Jan Witte will take over as chief executive officer elect from January.
Its share price fell by about 7.96% in early trades this morning to 64.8 pence per share, according to LSEG data.
The company said it had achieved several key developments in its business strategy, such as launching two new funds in its asset management segment, developing a suite of Luxembourg funds in its digital segment.
Remaining optimistic about its financial position, Record has increased its interim dividend by 5% to 2.15 pence per share, reflecting its confidence in future prospects.
It generated £21.5 million in turnover for the first half of fiscal 2024, a 3% year-on-year decline.
Income from management fees rose by 3% for the six months ended 30 September 2023, as it raked in £19.6 million, up from £19 million a year earlier.
However, a sharp decrease in performance fees contributed to the drop in revenue in the first half. Record said it generated £1.5 billion from performance fees in the first half of the fiscal year, 46% less than in the equivalent period a year ago.
The company’s profit before tax and basic earnings per share also declined by 16% and 24%, respectively, due to higher operating expenses and inflation. Pre-tax profit fell to £6.3 million and its basic EPS for the half year dropped to 2.48 pence.
The company’s assets under management equivalent in US dollar terms fell nearly 4% from the end of the previous financial year to US$84.5 billion, mainly due to exchange rate movements and net outflows.
CEO Leslie Hill said: “Our growth in financial terms is not linear and delays in new product launches alongside stubbornly high inflation have led to a decrease in our operating margin for the period.
“However, looking ahead, we anticipate further fund launches and growth across our range of products which we expect to increase our profitability over the medium term.
"The group remains well positioned financially, with increased cash generation and a strong balance sheet to support its future growth plans. The board remains confident in the delivery of market expectations for the current financial year.”