Against a backdrop of macroeconomic and political tumult in South Africa and referendum-induced uncertainty in the UK, Investec (INVP) is holding up well. Profit was helped by increasing assets under management, as well as an 11 per cent appreciation of the rand against sterling during the 12 months to March. However, even without positive currency translations, operating profit was up 4 per cent on 2016 to £664m.
The South African specialist banking group grew its loan book by 8 per cent thanks to an increase in its private and corporate banking client base. This, along with increased scale of the property fund, helped generate solid growth in net interest income, net fees and commission. However, transferring assets to Investec Equity Partners during the prior year resulted in a change in accounting treatment and meant operating profit for the South African business declined by 3 per cent.
Favourable markets and currency movements pushed up average funds under management within the asset management division by around a quarter to £95bn. Likewise, the wealth and investment management business benefited from net inflows of £1.2bn and higher equity market levels. This helped operating profit increase by 9 per cent to £93m.
Analysts at Numis expect adjusted pre-tax profit of £656m in the 12 months to March 2018, giving EPS of 48.7p, against £605m and 45.2p in 2017.
INVESTEC (INVP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 601p | MARKET VALUE: | £5.76bn | |
| TOUCH: | 601-601.5p | 12-MONTH HIGH: | 623p | LOW: 387p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 502p* | LEVERAGE: | 9.5% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 1.76 | 394 | 32.5 | 18.0 |
| 2014 | 1.78 | 424 | 34.3 | 19.0 |
| 2015 | 1.85 | 392 | 24.4 | 20.0 |
| 2016 | 1.89 | 567 | 38.5 | 21.0. |
| 2017 | 2.23 | 643 | 50.8 | 23.0 |
| % change | +18 | +13 | +32 | +10 |
Ex-div: 27 Jul Payment: 14 Aug *Includes UK-listed and South Africa-listed shares | ||||
