Weakness in the South African rand trimmed Investec's (INVP) half-year operating profit by 2.3 per cent to £222.8m - without this, management at the specialist bank and asset manager reckons earnings would have risen 13 per cent.
Indeed, the asset management grew operating profit 6.8 per cent to £71.9m, despite a fall in assets under management from £69.8bn at the end of March to £66.2bn at the end of September. However, averaged out over the half year, and funds managed were actually higher - there was also a £1.4bn net new fund inflow. Moreover, an impressive performance on the wealth and investment side lifted operating profit there by 35 per cent to £30.8m, again supported by higher average funds and a £400m net inflow.
Specialist banking found the going tougher, though. Operating profit there fell 12.9 per cent to £120m after legacy issues meant there was a £49.2m UK bank back book loss, in addition to restructuring costs relating to the closure of a number of businesses in Australia. The South African operation performed strongly, but this was offset by lower commission income in the UK - mainly reflecting lower returns earned on the fixed-income portfolio. So the UK operating profit slipped from £47.3m to £26.9m.
Broker Numis Securities expects full-year pre-tax profit of £458.1m, giving EPS of 35.7p (from £436.5m and 38.3p in 2013).
| INVESTEC (INVP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 424p | MARKET VALUE: | £3.78bn† | |
| TOUCH: | 423-424p | 12-MONTH HIGH: | 515p | LOW: 374p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 418p*† | |||
| Half-year to 30 Sep | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2012 | 198 | 15.8 | 8.00 |
| 2013 | 199 | 15.6 | 8.00 |
| % change | +0 | -1 | - |
Ex-div: 11 Dec Payment: 27 Dec *Includes intangible assets of £624m, or 73p a share †Reflect both UK and South African-listed entities | |||
