Investec has continued to build and alternative revenue stream, away from core lending – the investment bank's asset and wealth management business now generates 48.1 per cent of group operating profits, up from 38.6 per cent a year earlier. Although that shift was accompanied by a 30.2 per cent fall in the specialist banking unit's profits to £186.2m and, with the banking sector under a cloud, prospects for an early share price re-rating look slim.
Margins and fee income were maintained in the banking division, but investment income dropped 31.6 per cent to £174.3m, while impairments on loans rose 2.2 per cent to £325.1m. On the asset management side, operating profit rose 5 per cent to £133.7m – helped by a rise in funds under management from £58.8bn to £61.5bn. Crucially, this included net inflows of £5.2bn. Investec's wealth and management operation now includes Rensburg Sheppards and, as a result, assets under management here rose from £29.4bn to £34.8bn. Although restructuring costs saw divisional profits fall 4.2 per cent to £38.7m.
Numis Securities expects adjusted pre-tax profit for 2012 of £526.8m, giving EPS of 44.9p.
| INVESTEC (INVP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 330p | MARKET VALUE: | £2.0bn | |
| TOUCH: | 329-330p | 12-MONTH HIGH: | 527p | LOW: 318p |
| DIVIDEND YIELD: | 5.2% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 621p* | |||
| Year to 31 Mar | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2008 | 548 | 57.7 | 25.0 |
| 2009 | 368 | 38.5 | 13.0 |
| 2010 | 410 | 44.0 | 16.0 |
| 2011 | 466 | 49.7 | 17.0 |
| 2012 | 291 | 25.7 | 17.0 |
| % change | -38 | -48 | - |
Ex-div: 25 Jul Payment: 6 Aug *Includes intangible assets of £660m, or 110p a share | |||
