Investec takes a knock due to weak rand - CNBC Africa

Investec takes a knock due to weak rand

Earnings

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Investec Asset Management. PHOTO: Investec

“We have delivered results at the top end of what we anticipated, despite a sharp fall in the rand without which we would have shown a 13 per cent increase in earnings,” said Stephen Koseff, chief executive officer of Investec in a statement.  

“We have worked hard to deal with many of the legacy issues within the group and will continue to take decisive action in order to ensure Investec is in the right shape to take advantage of the recovery in the world economy and markets.”

The specialist bank and asset manager which operates in the United Kingdom, South Africa and Australia, is also listed on the London Stock Exchange and reports in pounds.

The group’s headline earnings per share (HEPS) fell 1.3 per cent from 15.8 pence to 15.6 pence while in rand terms, HEPS increased 15 per cent from 207 cents to 238 cents for the six months ended 30 September 2013.

Overall operating profit in rand terms rose 13.8 per cent from 2,982 million rand to 3,394 million rand.

Their Asset Management division reported a 23.9 per cent increase and their Wealth & Investment’s results rose by 56.3 per cent, with both divisions benefiting from higher levels of average funds under management and combined net inflows in excess of 27 billion rand.

The South African specialist banking division posted a 45.4 per cent profit increase while the UK Specialist Division also earned operating profit of 1.144 million rand. However, their Legacy business reported a loss of 740 million rand.  

Bernard Kantor, managing director of Investec added that the majority of the group’s businesses are showing good growth and that they are focused on enhancing those divisions’ capabilities while also tackling the businesses that aren’t performing.

“We are showing good growth in the vast majority of our businesses, and where growth is not in line with our expectations, we are tackling those issues head on,"Kantor explained.

"Our aim is to ensure we focus, build and expand the areas where we have core competencies that can generate appropriate shareholder returns across our business. As previously mentioned, we will effectively deal with those businesses that cannot deliver decent returns.” 

The group stated that while economic conditions remained volatile, they will continue to improve by addressing inefficiencies in their overall performance in order to position their business for future growth and development.

“Whilst economic conditions remain mixed, the overall group is improving in shape and capability. Significant progress has been made in identifying and addressing the drag on overall performance. The group will continue to realign the business model to position the business appropriately for future growth and development and the achievement of its financial targets,” concluded the statement. 

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