Investec (INVP) managed to overcome economic uncertainty in both the UK and South Africa last year. The banking and asset management specialist may have benefited from a 7 per cent appreciation in the value of the rand, but strip this out and it still posted a marginal uptick in ongoing operating profit.
In South Africa, Investec's specialist banking division grew its loan book 9 per cent to R257bn (£15bn), offsetting lower investment income and driving a 7 per cent rise in operating profit. The average credit loss ratio was also flat at 0.28 per cent of the loan book, staying at the lower end of its long-term average despite a rise in impairments. However, the UK-side of the business suffered a 9 per cent decline in operating profit, with investment banking income down against a strong prior year performance. That was despite a 15 per cent growth in the UK loan book to £9.4bn.
The asset management business continued to pull in funds, generating £5.4bn in net inflows. Operating profit pushed up 8 per cent, thanks to higher assets under management, offsetting the impact of lower performance fees in South Africa. The wealth and investment business also gained £2bn in net new business, with operating profit growth supported by higher equity markets during the year.
Analysts at Numis expect adjusted pre-tax profits of £732m during the 12 months to March 2019, giving EPS of 52.7p.
INVESTEC (INVP) | ||||
ORD PRICE: | 574p | MARKET VALUE: | £5.63bn* | |
TOUCH: | 574-575p | 12-MONTH HIGH: | 649p | LOW: 451p |
DIVIDEND YIELD: | 4.2% | PE RATIO: | 11 | |
NET ASSET VALUE: | 663p | LEVERAGE: | 11.6 |
Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
2014 | 1.78 | 424 | 34.3 | 19 |
2015 | 1.85 | 392 | 24.4 | 20 |
2016 | 1.89 | 567 | 38.5 | 21 |
2017 | 2.23 | 637 | 50.8 | 23 |
2018 | 2.38 | 638 | 51.2 | 24 |
% change | +7 | +0.02 | +1 | +4 |
Ex-div: | 26 Jul | |||
Payment: | 13 Aug | |||
*Includes UK-listed and South Africa-listed shares. |