Johannesburg- and London- listed specialist banking group Investec plc on Thursday reported a 43,1% leap in headline earnings per share for the six months to the end of September from 58,3 pence to 83,4 pence.
The group declared an interim dividend per share of 38 pence, which was a 26,7% increase on the 30-pence dividend declared for the previous comparable half-year.
In rand terms, this translates to 446 cents per share as opposed to 335 cents a share last time around — an increase of 33,1%.
The dividend equates to a dividend cover of 2,24 in line with the dividend cover range of 1,7 to 2,3 times.
Continued client-centric focus and an operating environment advantageous to Investec’s business units supported the group’s solid results for the six-month period. CEO Stephen Koseff said the team surpassed its stated growth and financial targets, including earnings per share, return on equity, and lower cost:income ratio.
Operating profits before taxation, goodwill impairment and non-operating items grew by 58,2% to £152,8-million from £96,6-million (58,5% in rand terms to R1,8-billion). Investec reported increased adjusted earnings per share before goodwill impairment and non-operating items from 60,7 pence to 85,2 pence, an increase of 40,4%.
Earnings attributable to ordinary shareholders before goodwill impairment and non-operating items increased by 37,4% from £68-million to £93,4-million (R1,1-billion).
Koseff said the results showed sound performance across all businesses that delivered significant operating profit growth across-the-board.
“Our deliberate, niche focus which accommodates the development of a distinctive service offering for our clients has delivered good returns. We continue to take advantage of the favourable market conditions and were very pleased with the growth in all businesses,” he said.
Private Client Activities, including Private Banking, witnessed an increase of 28,5% to £50,1-million (2004: £39-million), while Treasury and Specialised Finance saw an increase of 34% to £28,7-million (2004: £21,4-million).
In the case of Asset Management, the increase was 56,7% to £21,8-million (2004: £13,9-million) and that of Investment Banking 123,9% to £42,1-million (2004: £18,8-million). Property Activities saw an increase of 8,7% to £7,2-million (2004 £6,6-million).
This is all before impairment of goodwill and non-operating items, totalling £69,1-million (2004: £12,2-million).
For the period under review, return on equity grew from 18,7% to 22,1%, while the group’s cost:income ratio declined from 68,7 to 61,9 as a direct benefit of strong revenue growth.
“We’ve initiated quite a bit of corporate activity this past year to return to our core and strengthen our business,” said MD Bernard Kantor. “We think these actions will contribute to the sustainability of our business model, which gives us the platform to move confidently through to the end of the financial year.”
“Overall,” said Koseff, “the past six months have been conducted under extremely favourable conditions. Our teams are performing in high gear, surpassing our targets, and we look to the future with a continuing level of confidence.” — I-Net Bridge