Investec's (INVP) adjusted first-half operating profits of £281m might have fallen slightly short of analyst predictions, but that doesn't mean the company hasn't performed well in what remains a challenging business environment. The group continues to navigate high levels of macroeconomic uncertainty across its core geographies, but a recovery in equity markets led to higher total funds across asset and wealth management of £141bn at the period end, from £121bn in March, helped by net inflows of £1.8bn.
On the back of this, asset management operating profit grew by 17 per cent to £82m, while wealth and investment operating profit grew by 14 per cent to £43m.
While the group reported good levels of corporate and private client activity on the specialist banking side, an accounting change relating to the transfer of assets to Investec Equity Partners meant operating profits slid 7 per cent year on year to £213m. Results there were also hit by a decline in investment income and the writedown of an investment in the Hong Kong portfolio. Costs also increased as the group continued to invest in people and IT, particularly in its private banking business.
Analysts at Numis expect pre-tax profits of £599m for the year ending March 2017, giving EPS of 45.2p, compared with £541m and 41.9p in FY2016.
| INVESTEC (INVP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 521p | MARKET VALUE: | £4.8bn* | |
| TOUCH: | 520.5-521p | 12-MONTH HIGH: | 572p | LOW: 387p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 419p† | LEVERAGE RATIO: | 12 | |
| Half-year to 30 June | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) | |
|---|---|---|---|---|
| 2015 | 277 | 20.1 | 9.5 | |
| 2016 | 291 | 26.5 | 10.0 | |
| % change | +5 | +32 | +5 | |
Ex-div: 8 Dec Payment: 21 Dec *Includes UK-listed and South Africa-listed shares †Includes intangible assets of £518m, or 56p a share | ||||
