Shares of Record PLC fell by as much as 12.5% on Friday after the company admitted it may take longer than expected to achieve its goals, citing delays in new product launches. The missed targets for the first half of the year resulted in a decline in pretax profit and revenue.
Leadership Changes and Financial Performance
Record PLC, a U.K. specialist-currency and asset manager, announced that Chief Executive Leslie Hill will step down in March. Jan Witte will join the board in January and assume the role of CEO on April 1. For the half year ended September 30, pretax profit stood at £6.3 million, compared to £7.5 million during the same period last year. Revenue also declined from £22.06 million to £21.5 million, while the operating profit margin dropped to 29% from 34% due to the aforementioned product launch delays and high inflation.
Future Growth Prospects
Despite the challenging performance in the first half of the year, Record PLC remained optimistic about its future prospects. The company foresees further fund launches and growth across its products, which it believes will lead to increased profitability over the medium term. In fact, the company had set a revenue target of at least £60 million by fiscal 2025, with an operating margin goal of 40%.
Long-Term Outlook
“I believe the business remains capable of delivering on the targets set out in February, albeit achieving them may take longer than originally anticipated,” commented Leslie Hill. He also highlighted that the company has improved cash generation and boasts a strong balance sheet to support its future growth plans. Additionally, the board expressed confidence in meeting market forecasts for the year.
Dividend Increase and Analyst Forecasts
Record PLC raised its interim dividend from 2.05 pence to 2.15 pence per share for the first half of fiscal 2024. While the company did not provide any forecasts, FactSet data indicated that revenue for the year ending March 31 is expected to be £44.1 million based on two analysts’ estimates. This figure is slightly lower than the £44.7 million achieved in fiscal 2023.
