Investec expects slight FY revenue drop

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The financial products and services provider expects revenue to increase by approximately 15 per cent in rands.

“Wealth and investment’s results are expected to increase substantially and asset management is expected to report results moderately ahead of the prior year. The South African specialist banking business is expected to report results substantially ahead of the prior year in rands,” [DATA INL:Investec Limited] said.

(READ MORE: Investec takes a knock due to weak rand)

“Overall group results have been negatively impacted by the depreciation of the rand: pounds sterling exchange rate of approximately 20 per cent over the period. Against the backdrop of improved operating results and the depreciation of the rand, operating profit is expected to be marginally ahead of the prior year – an increase of approximately 28 per cent in rands.”

Recurring income, as a percentage of total operating income, is expected to be approximately 72 per cent from 69 per cent in 2013 while impairments are expected to be approximately 35 per cent lower than the prior year.

Expenses are expected to decrease moderately, increasing by approximately 17 per cent in rands and adjusted earnings per share (EPS) in rands is expected to be 22 per cent to 27 per cent higher than the prior year.

“Over the past year the group has focused on reshaping its business with a view to improving returns and has successfully restructured and/or sold certain businesses. As previously announced, the group is in the process of selling part of its Australian business and Kensington, the group’s intermediary mortgage business in the UK,” it said.

(READ MORE: Investec shares up on hopes for Kensington mortgage unit sale)

“The group has clarity on its strategic direction and the focus over the next period will be to execute its key strategic initiatives, including the sales referred to above, resulting in a streamlined and focused client driven organisation.”

Investec is expected to release its results for the year ending 31 March 2014 on 22 May 2014.