Highlights

• Record paid 3.6p across two dividends, ex-dividend on 20 November 2025 and 2 July 2026.

• The 1.45p final compares with 2.50p a year earlier, and the full-year payout fell to 3.60p from 4.65p.

• Basic Earnings of 3.92p per share left payments covered by about 1.09 times, based on the reported figures.

• Assets under management rose 14% to 114.6 billion dollars, with risk management generating most of the revenue.

A Dividend cut with a growth story attached. Record (LSE:REC) reduced its final payout to 1.45p in 2026, and the full year came in at 3.60p, down from 4.65p. Yet assets under management climbed, and the board kept its Payout Ratio steady, so the reduction tells an unusual story about earnings and investment.

What shareholders received

The interim of 2.15p went ex-dividend on 20 November 2025 and was paid on 19 December 2025. The final of 1.45p went ex on 2 July 2026, with a Record Date of 3 July, Shareholder approval at the AGM on 22 July and payment on 27 July 2026. Together they make 3.60p for the window. No Special Dividend was found. The 2.15p interim is implied from the 3.60p total, since the final is stated separately. For holders of LSE:REC, the reduction is clearest in the final.

Coverage and the yield

Basic earnings per share were 3.92p, against 5.03p a year earlier, and the payout ratio held at 92%. That puts cover at roughly 1.09 times, a figure calculated from the reported numbers. A share price of 50.40p, without a stated date, puts the trailing Yield at 7.14%, below the 8.63% published elsewhere, which appears to rest on an older price. Dividend cover shows how many times profit covers the payout, and a value close to one leaves little margin.

A Business in transition

Record is a currency risk management and asset management firm. Revenue was 40.1 million pounds, down 4%, with Risk Management at 66% of the mix, Private Markets at 28% and Absolute Return at 6%. Operating profit was 10.0 million pounds and profit after tax 7.0 million pounds, down 23%, helped by a higher effective tax rate of 28%. Private Markets assets rose 18% to 18.1 billion dollars. The shift in mix towards private markets is part of the company's strategy.

Why a payout ratio matters

The payout ratio is the share of profit paid as dividends. At 92%, Record distributes most of what it earns, which leaves little for reinvestment but supports income. When profit falls, as it did here, a company that holds the ratio steady must cut the dividend in line, which is what happened. Investors who prefer stability may favour a lower ratio, while those who want high income may accept a higher one.

Balance sheet

Net assets were 27.8 million pounds including 13.0 million pounds of cash, with no external debt, and regulatory Capital sat 19.2 million pounds above an 8.6 million pound minimum. Operating cash inflow was 9.2 million pounds. A firm regulated for its capital must keep a buffer, and a surplus of that size gives the board some flexibility. The absence of Debt also lowers financial risk.

Risks

The thin cover and the cut itself are the principal risks. New mandates expected to add 4 million pounds to revenue in the 2027 financial year have uncertain timing. Fund flows and market moves drive fee income, and currency hedging revenue can change as client Demand shifts. A fall in assets under management would reduce fees quickly. Investors in LSE:REC should therefore watch earnings per share as closely as the dividend.

Fee income and market moves

Record earns fees as a percentage of assets under management and from currency risk management services. When markets rise or clients add mandates, fees grow; when markets fall or mandates end, fees can fall. The 14% rise in assets under management to 114.6 billion dollars shows progress, although revenue fell 4%, which indicates that the mix and fee rates matter as well as the total size.

Cover and what it tells investors

Cover of 1.09 times means that profit was just above the dividend. A company in that position cannot raise the payout without earnings growth, and it risks a further cut if profit falls. Record (LSE:REC) has already reset the dividend, which gives a lower base for future growth. Investors should follow earnings per share through the coming reporting periods to see whether cover is improving.

Total return and yield

Yield shows only part of what a shareholder earns. Total return combines dividends with changes in the share price, so a high yield can still produce a loss if the price falls by more than the income received. The reverse is also true: a modest yield with a rising price can deliver a good overall return. Both parts should be reviewed over a period of several years.

What to watch next

The next steps are the Interim Dividend and the half-year results. If earnings recover, the dividend could rise again with the payout ratio unchanged; if they stall, the payment may stay low. Investors should also follow the progress of the new mandates, the level of assets under management and the effect of the higher tax rate on profit.