International specialist banking group Investec CEO Stephen Koseff believes the hard work of the past few years and the group’s focus on its core businesses has paid off.
“We have achieved the majority of our stated growth and financial return objectives, and we have made significant progress towards achieving the others,” he says.
This is evidenced, he believes, in the strong set of results produced by the group for the 12 months ended March, which saw headline earnings in pound sterling terms increase by 43,7% to £152,2-million.
“We regard these as an excellent set of results, which was driven by very strong performances from all our businesses,” Koseff says, adding that the group has benefited from continued focus on driving profitable growth in its key business areas and geographies, supported by favourable economic conditions.
“Our results reflect the benefit of strategic actions taken by group management over the past few years to streamline the business and achieve greater operational focus on core activities.
“During 2004, we identified and implemented six key financial and growth targets by which to measure the group’s performance and, as these results demonstrate, we have moved rapidly towards meeting, or improving on those financial targets,” Koseff says.
“We have raised our sustainable basis quite substantially over the past five years. We are now a much leaner, tighter organisation,” he adds.
Growing the business organically, he believes, is what has made the difference.
“We have not made any acquisitions or issued any new shares, which is why I believe we have reached our targets.”
Over the past financial year, operating profits before exceptional items and amortisation of goodwill of the group’s operations grew by 57,5% to £208,3-million, from £132,3-million (50,2% in rand terms, to R2,4-billion).
Earnings per share before exceptional items and goodwill amortisation increased from 103,8 pence to 140,8 pence, or by 35,6%.
“We have achieved a return on equity shareholders’ funds of 21,3%, up from 15,4% in the previous year, and enabling us to surpass our target of 20%.”
According to Koseff, annuity income as a percentage of operating income has grown from 64,8% to 65,2%, reflecting Investec’s strong financial services model with breadth and regional diversity.
“An improvement of overall cost-to-income ratio from 72,7% to 66,8% demonstrates our ongoing commitment to reducing fixed costs and driving revenues,” adds MD Bernard Kantor.
“We firmly believe that our niche focus, ability to be distinctive and the quality of our people will position us to take advantage of market conditions.
“We are confident that we will capitalise on opportunities that lie ahead of us, [which] will allow us to continue to grow profitably in the forthcoming year,” he says.
Adds Koseff: “We have continued to build scale in our businesses to provide a platform for sustainable growth. Although the operating environment remains competitive, we believe we are well positioned with balanced, quality earnings.” — I-Net Bridge