However, the group's performance elsewhere was much more impressive. Operating profits from asset management jumped 52.6 per cent to £127m, thanks to net inflows of £7.4bn that contributed to a 26.7 per cent rise in assets under management to £58.8bn. On the wealth and investment side, last year's acquisition of Rensburg Sheppards helped to lift operating profits by 56.2 per cent to £40.4m, while investment banking recorded a 62.1 per cent increase in profits to £67.4m. Finances remained in pretty good shape too, with Investec's Tier 1 ratio a healthy 11.6 per cent.
Numis Securities is forecasting 2012 adjusted pre-tax profits of £672m and EPS of 61.1p (2011: £434m and 43.2p).
|ORD PRICE:||486p||MARKET VALUE:||£2.6bn|
|TOUCH:||486-487p||12-MONTH HIGH:||539p||LOW: 425p|
|DIVIDEND YIELD:||3.5%||PE RATIO:||10|
|NET ASSET VALUE:||737p|
|Year to 31 Mar||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Ex-div: 27 Jul
Payment: 8 Aug
Investec has realigned its business model towards less capital intensive activities by building up the asset and wealth management side, resulting in a strong increase in fee income. Impairments remain a concern but are expected to decline, assuming a pick up in economic activity. Rated on 8 times forecast earnings the shares remain good value.
Last IC view:Good Value, 508p, 18 November 2010.