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INP/INL - Investec plc/ Investec Limited - Unaudited consolidated financial

Release Date: 17/11/2011 09:00
Code(s): INL INP INPPR INPR
Wrap Text

INP/INL - Investec plc/ Investec Limited - Unaudited consolidated financial results in Pounds Sterling for the six months to 30 September 2011 Investec plc (Registration number 3633621) JSE Code: INP ISIN: GB00B17BBQ50 Investec Limited (Registration number 1925/002833/06) JSE Code: INL ISIN: ZAE000081949 Investec plc and Investec Limited (combined results) Unaudited consolidated financial results in Pounds Sterling for the six months to 30 September 2011 Salient Features 30 September 30 September % 31 March 2011 2010 Change 2011
Operating profit before 223 629 228 157 (2.0) 434 406 goodwill, acquired intangibles, non- operating items, taxation and after non-controlling interests (GBP`000) Earnings attributable to 178 920 246 993 (27.6) 420 516 shareholders (GBP`000) Adjusted earnings before 162 867 163 202 (0.2) 327 897 goodwill, acquired intangibles and non- operating items (GBP`000) Adjusted earnings per 20.6 22.1 (6.8) 43.2 share (pence) Earnings per share 19.2 29.7 (35.4) 49.7 (pence) Headline earnings per 18.7 19.8 (5.6) 37.7 share (pence) Dividends per share 8.0 8.0 - 17.0 (pence) Total equity 3 797 3 798 - 3 961 (GBP`million) Third party assets under 80 000 77 819 2.8 88 878 management (GBP`million) Asset Management and 39.1 28.6 36.7 38.6 Wealth Management businesses contribution to operating profit (%) Combined consolidated income statement Six months to Six months to Year to 30 September 30 September 31 March GBP`000 2011 2010 2011 Interest income 1 183 565 1 118 360 2 238 783 Interest expense (818 853) (797 186) (1 557 314) Net interest income 364 712 321 174 681 469 Fee and commission income 507 980 389 961 896 300 Fee and commission expense (62 812) (49 467) (108 642) Principal transactions 138 261 208 706 418 686 Investment income on 11 630 17 986 64 834 assurance activities Premiums and reinsurance 4 198 5 028 6 110 recoveries on insurance contracts Other operating income 44 290 8 387 54 003 Other income 643 547 580 601 1 331 291 Claims and reinsurance (15 856) (20 727) (57 774) premiums on insurance business Total operating income net of 992 403 881 048 1 954 986 insurance claims Impairment losses on loans (143 328) (122 850) (318 230) and advances Operating income 849 075 758 198 1 636 756 Operating costs (607 860) (540 878) (1 196 865) Depreciation on operating (22 154) - (16 447) leased assets Operating profit before 219 061 217 320 423 444 goodwill and amortisation of acquired intangibles Impairment of goodwill (672) (2 763) (6 888) Amortisation of acquired (4 096) (2 254) (6 341) intangibles Operating profit 214 293 212 303 410 215 Profit arising from associate - 73 465 73 465 converted to subsidiary Net loss on sale of - (7 942) (17 302) subsidiaries Profit before taxation 214 293 277 826 466 378 Taxation on operating profit (41 985) (43 828) (65 075) before goodwill Taxation on intangibles and 2 044 677 6 610 sale of subsidiaries Profit after taxation 174 352 234 675 407 913 Operating losses attributable 4 568 10 837 10 962 to non-controlling interests Loss on subsidiaries - 1 481 1 641 attributable to non- controlling interests Earnings attributable to 178 920 246 993 420 516 shareholders Earnings attributable to 178 920 246 993 420 516 shareholders Impairment of goodwill 672 2 763 6 888 Amortisation of acquired 2 052 1 577 3 509 intangibles, net of taxation Loss on subsidiaries - (1 481) (1 641) attributable to non- controlling interests Profit arising from associate - (73 465) (73 465) converted to subsidiary Net loss on sale of - 7 942 13 524 subsidiaries, net of taxation Preference dividends paid (26 730) (27 031) (43 019) Additional earnings 6 201 5 904 1 585 attributable to other equity holders Currency hedge attributable 1 752 - - to perpetual equity instruments Adjusted earnings 162 867 163 202 327 897 attributable to ordinary shareholders before goodwill, acquired intangibles and non- operating items Headline adjustments (gain on (14 949) (17 002) (41 238) investment properties and available-for-sale instruments recognised in income) Headline earnings 147 918 146 200 286 659 Earnings per share (pence) - Basic 19.2 29.7 49.7 - Diluted 18.1 27.9 46.7 Adjusted earnings per share (pence) - Basic 20.6 22.1 43.2 - Diluted 19.4 20.7 40.6 Headline earnings per share (pence) - Basic 18.7 19.8 37.7 - Diluted 17.6 18.6 35.5 Number of weighted average shares (millions) - Basic 792.1 739.7 759.8 Summarised combined consolidated statement of total comprehensive income Six months to Six months to Year to 30 September 30 September 31 March GBP`000 2011 2010 2011 Profit after taxation 174 352 234 675 407 913 Other comprehensive income: Cash flow hedge movements (34 524) 2 113 9 929 taken directly to other comprehensive income+ Fair value movements on (22 115) 10 527 27 631 available-for-sale assets taken directly to other comprehensive income+ Gains on realisation of (1 070) (1 624) (4 845) available-for-sale assets recycled through the income statement+ Foreign currency adjustments (237 073) 8 224 39 588 on translating foreign operations Pension fund actuarial gains - - 10 157 Total comprehensive (120 430) 253 915 490 373 (loss)/income Total comprehensive loss (19 971) (11 351) (10 710) attributable to non- controlling interests Total comprehensive (127 189) 235 472 458 064 (loss)/income attributable to ordinary shareholders Total comprehensive income 26 730 29 794 43 019 attributable to perpetual preferred securities Total comprehensive (120 430) 253 915 490 373 (loss)/income +Net of taxation of (GBP21.5 million) (Six months to 30 September 2010: GBP3.0 million, Year to 31 March 2011: GBP5.7 million). Summarised combined consolidated statement of changes in equity Six months to Six months to Year to 30 September 30 September 31 March GBP`000 2011 2010 2011 Balance at the beginning of 3 961 102 3 291 861 3 291 861 the period Total comprehensive (120 430) 253 915 490 373 (loss)/income Share-based payment 36 660 17 708 69 518 adjustments Dividends paid to ordinary (70 558) (59 341) (123 630) shareholders Dividends paid to perpetual (26 730) (27 031) (43 019) preference shareholders Dividends paid to non- (247) (182) (356) controlling interests Issue of ordinary shares 40 030 317 464 325 886 Issue of perpetual preference 20 638 11 893 16 138 shares Share issue expenses (587) (3 753) (3 632) Issue of equity instruments - 1 514 1 493 by subsidiaries Movement of treasury shares (42 894) (6 253) (45 461) Acquisition of non- - - (3 970) controlling interests Non-controlling interest - - (14 099) relating to disposal of subsidiaries Balance at the end of the 3 796 984 3 797 795 3 961 102 period Combined consolidated balance sheet 30 September 31 March 30 September
GBP`000 2011 2011 2010* Assets Cash and balances at central 1 274 647 1 769 078 1 550 807 banks Loans and advances to banks 2 186 698 1 468 705 2 257 741 Cash equivalent advances to 398 068 535 983 527 758 customers Reverse repurchase agreements 2 332 960 2 467 775 1 207 255 and cash collateral on securities borrowed Trading securities 5 212 200 5 114 322 5 338 673 Derivative financial 2 543 704 1 799 204 1 970 670 instruments Investment securities 3 461 471 3 328 609 2 915 969 Loans and advances to 17 938 242 18 758 524 18 110 210 customers Loans and advances to 1 530 550 1 612 181 1 683 586 customers - Kensington warehouse assets Securitised assets 4 137 563 4 924 293 5 150 421 Interests in associated 24 164 23 481 22 303 undertakings Deferred taxation assets 117 340 114 838 132 252 Other assets 1 475 416 1 410 593 1 188 678 Property and equipment 266 452 279 801 57 774 Investment properties 354 700 379 527 324 672 Goodwill 454 417 456 608 466 125 Intangible assets 130 346 136 452 167 506 Non-current assets classified - - 122 133 as held for sale 43 838 938 44 579 974 43 194 533 Other financial instruments at fair value through profit or loss in respect of - Liabilities to customers 5 887 649 6 361 296 5 781 206 - Assets related to - - 2 699 reinsurance contracts 49 726 587 50 941 270 48 978 438 Liabilities Deposits by banks 1 696 070 1 858 893 2 181 563 Deposits by banks - 898 564 975 542 1 082 431 Kensington warehouse funding Derivative financial 2 010 287 1 486 419 1 618 990 instruments Other trading liabilities 834 417 716 556 540 254 Repurchase agreements and 1 721 545 1 599 646 942 699 cash collateral on securities lent Customer accounts (deposits) 24 184 573 24 441 260 23 493 808 Debt securities in issue 2 149 556 2 145 213 2 183 112 Liabilities arising on 3 575 793 4 340 864 4 488 245 securitisation Current taxation liabilities 207 298 206 957 191 560 Deferred taxation liabilities 138 110 148 750 202 938 Other liabilities 1 297 615 1 411 137 1 193 942 Pension fund liabilities - - 487 Liabilities directly - - 103 465 associated with non-current assets held for sale 38 713 828 39 331 237 38 223 494
Liabilities to customers 5 885 448 6 358 732 5 776 517 under investment contracts Insurance liabilities, 2 201 2 564 4 689 including unit-linked liabilities Reinsured liabilities - - 2 699 44 601 477 45 692 533 44 007 399 Subordinated liabilities 1 328 126 1 287 635 1 173 244 45 929 603 46 980 168 45 180 643 Equity Ordinary share capital 210 208 201 Perpetual preference share 153 153 181 capital Share premium 2 292 401 2 242 067 2 256 628 Treasury shares (62 313) (42 713) (55 182) Other reserves 38 838 315 878 270 030 Retained income 1 234 384 1 131 980 999 077 Shareholders` equity 3 503 673 3 647 573 3 470 935 excluding non-controlling interests Non-controlling interests 293 311 313 529 326 860 - Perpetual preferred 293 829 317 997 311 312 securities issued by subsidiaries - Non-controlling interests (518) (4 468) 15 548 in partially held subsidiaries Total equity 3 796 984 3 961 102 3 797 795 Total liabilities and equity 49 726 587 50 941 270 48 978 438 *As restated for reclassifications detailed in the commentary section of this report. Summarised combined consolidated cash flow statement Six months to Six months to Year to 30 September 30 September 31 March GBP`000 2011 2010 2011 Cash inflows from operations 394 574 343 799 779 885 Increase in operating assets (3 428 440) (2 460 557) (4 032 844) Increase in operating 2 834 291 1 295 406 2 752 392 liabilities Net cash outflow from (199 575) (821 352) (500 567) operating activities Net cash outflow from (19 493) (10 946) (292 272) investing activities Net cash inflow from 28 144 157 453 156 748 financing activities Effects of exchange rate (129 249) 15 889 101 032 changes on cash and cash equivalents Net decrease in cash and cash (320 173) (658 956) (535 059) equivalents Cash and cash equivalents at 3 386 988 3 922 047 3 922 047 the beginning of the period Cash and cash equivalents at 3 066 815 3 263 091 3 386 988 the end of the period Cash and cash equivalents are defined as including cash and balances at central banks, on demand loans and advances to banks and cash equivalent advances to customers (all of which have a maturity profile of less than three months). Segmental geographic and business analysis of operating profit before goodwill, acquired intangibles, non-operating items and taxation for the six months to 30 September 2011 United Kingdom Southern Total GBP`000 and Europe Africa Australia group Asset Management 28 401 37 177 - 65 578 Wealth and Investment 13 217 8 571 - 21 788 Property Activities (20) 10 453 1 255 11 688 Private Banking 3 779 14 701 (23 382) (4 902) Core Private Banking 9 163 14 701 13 258 37 122 Property development (5 384) - (36 640) (42 024) portfolio being run off* Investment Banking (2 059) 7 488 (1 770) 3 659 Capital Markets 98 892 54 806 1 917 155 615 Group Services and (47 876) 17 478 601 (29 797) Other Activities Operating profit after 94 334 150 674 (21 379) 223 629 non-controlling interests Core business 99 718 150 674 15 261 265 653 Property development (5 384) - (36 640) (42 024) portfolio being run off* Non-controlling (4 568) interest - equity Operating profit 219 061 before goodwill and acquired intangibles * Residual property development loan portfolio in Ireland and Australia which have been ring-fenced for collection and recovery and are being run-off. Segmental geographic and business analysis of operating profit before goodwill, acquired intangibles, non-operating items and taxation for the six months to 30 September 2010 United Kingdom Southern Total
GBP`000 and Europe Africa Australia group Asset Management 18 867 30 046 - 48 913 Wealth and Investment 8 996 7 346 - 16 342 Property Activities (443) 14 540 2 311 16 408 Private Banking (12 486) 14 150 (5 543) (3 879) Core Private Banking 9 536 14 150 6 177 29 863 Property development (22 022) - (11 720) (33 742) portfolio being run off* Investment Banking 8 816 36 845 (3 151) 42 510 Capital Markets 88 385 40 364 4 757 133 506 Group Services and (32 097) 3 119 3 335 (25 643) Other Activities Operating profit after 80 038 146 410 1 709 228 157 non-controlling interests Core business 102 060 146 410 13 429 261 899 Property development (22 022) - (11 720) (33 742) portfolio being run off* Non-controlling (10 837) interest - equity Operating profit 217 320 before goodwill and acquired intangibles Commentary Investec plc and Investec Limited (combined results) Unaudited combined consolidated financial results in Pounds Sterling for the six months ended 30 September 2011 Overall group performance The group`s diversified business model, level of recurring income, and strong capital and liquidity has supported a stable operational performance against a backdrop of volatile and unstable economic and market conditions during the period under review. The group`s low-capital intensive asset and wealth management businesses have performed well, reporting a strong increase in their contribution to group earnings. The Specialist Banking businesses have benefited from growth in net interest income and fee income but earnings from principal transactions have been negatively impacted by poor economic fundamentals and market volatility referred to above. The main features of the period under review are: - Operating profit before goodwill, acquired intangibles, non-operating items and taxation and after non-controlling interests ("operating profit") decreased 2.0% to GBP223.6 million (2010: GBP228.2 million). - Impairments on loans and advances increased 16.7% to GBP143.3 million (2010: GBP122.9 million), but decreased by 26.6% relative to the second half of the financial year ended 31 March 2011. - Adjusted earnings attributable to shareholders before goodwill, acquired intangibles and non-operating items decreased 0.2% to GBP162.9 million (2010: GBP163.2 million). - Adjusted earnings per share (EPS) before goodwill, acquired intangibles and non-operating items decreased 6.8% from 22.1 pence to 20.6 pence, largely as a result of an increase in the number of shares in issue. - The asset management and wealth management businesses account for 39.1% of the group`s operating profit, compared to 28.6% in 2010. - Third party assets under management decreased 10.0% to GBP80.0 billion (31 March 2011: GBP88.9 billion) - a decline of 3.4% on a currency neutral basis. Net inflows amounted to approximately GBP3.0 billion. - Customer accounts (deposits) decreased 1.0% to GBP24.2 billion (31 March 2011: GBP24.4 billion) - an increase of 8.1% on a currency neutral basis. - Core loans and advances decreased 6.7% to GBP17.5 billion (31 March 2011: GBP18.8 billion) - an increase of 2.0% on a currency neutral basis. - The board declared a dividend of 8.0 pence per ordinary share (2010: 8.0 pence) resulting in a dividend cover based on the group`s adjusted EPS before goodwill and non-operating items of 2.6 times (2010: 2.8 times), consistent with the group`s dividend policy. Operational review The banking environment remains uncertain as regulators continue their review and adjustment of the regulatory framework in an attempt to strengthen the system and avoid future crises. As a result, the group maintains high levels of surplus cash and capital in anticipation of a system where higher levels of liquidity and capital will become the norm. Liquidity and funding Diversifying Investec`s funding sources has been a key element in improving the quality of the group`s balance sheet and reducing its reliance on wholesale funding. The group continues to benefit from its growing retail franchise recording an increase in customer deposits in all three core geographies. Cash and near cash balances amount to GBP9.3 billion (31 March 2011: GBP9.3 billion) - GBP10.1 billion on a currency neutral basis. Capital adequacy The group comfortably met its capital adequacy targets of a minimum tier one capital ratio of 11% and a total capital adequacy ratio range of 14% to 17% on a consolidated basis for each of Investec plc and Investec Limited respectively. Capital adequacy ratios remain sound in both Investec plc and Investec Limited, as reflected in the table below. 30 September 30 September 31 March Basel II ratios 2011 2010 2011 Investec plc Capital adequacy ratio 17.1% 16.7% 16.8% Tier 1 ratio 11.6% 12.1% 11.6% Investec Limited Capital adequacy ratio 15.7% 16.2% 15.9% Tier 1 ratio 12.0% 12.1% 11.9% Asset quality The bulk of Investec`s credit and counterparty risk arises through its Private Banking and Capital Markets activities. The Private Bank lends mainly to high net worth and high income individuals, whilst Capital Markets primarily transacts with mid to large sized corporates, public sector bodies and institutions. The majority of the group`s credit and counterparty exposures reside within its three core geographies. The group has no exposure to peripheral European sovereign debt. Net defaults on core loans and advances have decreased and are fully covered by collateral, as detailed in the "Financial statement analysis" below. Business unit review The group continues to realign its business model towards less capital intensive activities by building strong asset management and wealth management businesses thereby growing its annuity net fee and commission income. This strategy has resulted in a solid rise in net inflows of funds under management and an increase in operating profit from these businesses of 33.9% to GBP87.4 million (2010: GBP65.2 million). Asset Management Asset Management increased operating profit 34.1% to GBP65.6 million (2010: GBP48.9 million) benefiting from higher average funds under management and a reliable investment performance. Net inflows of GBP2.2 billion were recorded. Total funds under management amount to GBP53.1 billion (31 March 2011: GBP58.8 billion) and have been negatively impacted by market and currency volatility. Wealth & Investment Wealth & Investment increased operating profit 33.3% to GBP21.8 million (2010: GBP16.3 million) benefiting from higher average funds under management and a full contribution from the acquisition of Rensburg Sheppards plc which became effective in June 2010. Net inflows of GBP0.8 billion were recorded. Total funds under management amount to GBP26.3 billion (31 March 2011: GBP29.4 billion) and have also been negatively impacted by market and currency volatility. Property Activities Property Activities` operating profit declined by 28.8% to GBP11.7 million (2010: GBP16.4 million) largely as a result of the sale of R1.7 billion of its property portfolio at the end of financial year 2011. The results of the division are in line with the group`s expectations and remain supported by a sound investment property portfolio in South Africa. Private Banking Private Banking reported a loss of GBP4.9 million (2010: loss of GBP3.9 million). If one excludes the property development portfolio which is being run off in Australia and Ireland, the Private Bank made a profit of GBP37.1 million (2010: GBP29.9 million). The South African business has benefited from growth in its loan portfolio and improved margins, whilst the UK business showed a significantly improved performance as a result of lower impairments. The professional banking business in Australia continues to perform well and accounts for approximately 50% of its loan portfolio. The Australian business has, however, been negatively impacted by significantly increased impairments on the property development portfolio that is being run off. Activity levels, whilst improving, remain below historic norms across all three core geographies. The private client core lending book is GBP12.5 billion (31 March 2011: GBP13.3 billion) and the deposit book is GBP12.0 billion (31 March 2011: GBP12.5 billion). Investment Banking Investment Banking operating profit declined by 91.4% to GBP3.7 million (2010: GBP42.5 million) largely due to the performance of the listed principal investment portfolio which was adversely affected by a sharp fall in equity markets towards the end of the period. Weaker economic and trading conditions have impacted the timing of realisations and dividends received. Agency divisions benefited from a good deal pipeline, notably in South Africa, however, operating conditions in the Institutional Stockbroking business remain difficult. Capital Markets Capital Markets increased operating profit by 16.6% to GBP155.6 million (2010: GBP133.5 million). The division benefited from a strong deal pipeline and improved margins in South Africa, and another solid performance from the UK business. Activity levels within the Australian business remain satisfactory. Core loans and advances amount to GBP4.4 billion (31 March 2011 GBP4.8 billion). Group Services and Other Activities Group Services and Other Activities made a loss of GBP29.8 million (2010: loss of GBP25.6 million). Central Funding`s results were impacted by lower margins and Central Services incurred an increase in personnel costs and systems related costs. Further information on key developments within each of the business units is provided in a detailed report published on the group`s website: http://www.investec.com Financial statement analysis Total operating income Total operating income net of insurance claims increased by 12.6% to GBP992.4 million (2010: GBP881.0 million), with recurring income as a percentage of total operating income amounting to 67.8% (2010: 63.0%). Net interest income increased by 13.6% to GBP364.7 million (2010: GBP321.2 million) largely as a result of improved margins across all three geographies and a sound performance from the group`s fixed income portfolios. Net fee and commission income increased by 30.7% to GBP445.2 million (2010: GBP340.5 million). The group benefited from higher average funds under management and solid net inflows. The banking businesses recorded an increase in net fees and commissions largely due to a good performance by the Capital Markets division in South Africa, however, transactional activity levels remain mixed. Income from principal transactions decreased by 33.8% to GBP138.3 million (2010: GBP208.7 million) largely due to a weaker performance from the group`s listed principal investments portfolio as outlined above. Other operating income includes associate income and income earned on an operating lease portfolio acquired during December 2010. Impairment losses on loans and advances The overall picture on impairment losses on loans and advances was mixed. Although impairments have fallen since the second half of the last financial year, losses on loans and advances increased from GBP98.2 million to GBP107.1 million (excluding Kensington) compared to the first half of last year. This was largely as a result of significantly increased impairments on the property development portfolio in Australia. The residual loan portfolio has been ring- fenced for collection and recovery. Since 31 March 2011 the level of defaults in South Africa has started to improve, whilst the UK reported defaults marginally ahead of the year-end. The credit loss charge as a percentage of average gross loans and advances has improved from 1.27% at 31 March 2011 to 1.08% for the current period. The percentage of default loans (net of impairments but before taking collateral into account) to core loans and advances amounts to 4.30% (31 March 2011: 4.66%). The ratio of collateral to default loans (net of impairments) remains satisfactory at 1.19 times (31 March 2011: 1.38 times). Impairment losses on loans and advances relating to the Kensington business amount to GBP36.2 million (2010: GBP24.7 million). The Kensington book has reduced from GBP4.2 billion at 31 March 2011 to GBP3.6 billion. Operating costs and depreciation The ratio of total operating costs to total operating income amounts to 62.6% (2010:61.4%). Total operating expenses grew by 12.4% to GBP607.9 million (2010: GBP540.9 million) as a result of the acquisitions of Rensburg Sheppards plc, an increase in variable remuneration in certain divisions given improved profitability, and an increase in headcount in certain divisions. Cost containment is a key priority for the group. Impairment of goodwill The current period goodwill impairment relates to Asset Management businesses acquired in prior years. Amortisation of acquired intangibles Amortisation of acquired intangibles relates to the Wealth & Investment business and mainly comprises amortisation of amounts attributable to client relationships. Profit arising from associate converted to a subsidiary In the prior period a net gain of GBP73.5 million arose on the acquisition of the balance of shares in Rensburg Sheppards plc not already owned by the group. Net loss on sale of subsidiaries In the prior period a net loss on sale of subsidiaries of GBP7.9 million arose from a loss on sale of previously consolidated group investments. Taxation The operational effective tax rate amounts to 19.2% (2010: 20.2%). Losses attributable to non-controlling interests Losses attributable to non-controlling interests comprise: - GBP4.6 million relating to Euro denominated preferred securities issued by a subsidiary of Investec plc which are reflected on the balance sheet as part of non-controlling interests. (The transaction is hedged and a forex transaction loss arising on the hedge is reflected in operating profit before goodwill with the equal and opposite impact reflected in earnings attributable to non- controlling interests). Balance sheet analysis Since 31 March 2011: - Total shareholders` equity (including non-controlling interests) decreased by 4.1% to GBP3.8 billion largely as a result of the sharp depreciation of the Rand, partially offset by retained earnings and the issue of shares. - Total assets decreased from GBP50.9 billion to GBP49.7 billion largely as a result of the sharp depreciation of the Rand. - Core loans and advances (excluding own originated securitised assets) as a percentage of customer deposits improved from 72.4% to 68.2%. - The return on adjusted average shareholders` equity declined from 11.2% to 10.1%. - Net asset value per share decreased 6.0% to 391.2 pence and net tangible asset value per share (which excludes goodwill and intangible assets) decreased by 6.6% to 321.0 pence largely as a result of the sharp depreciation of the Rand. The group`s gearing ratios remain low with core loans and advances to equity at 4.6 times (31 March 2011: 4.7 times) and total assets (excluding assurance assets) to equity at 11.5 times (31 March 2011:11.3 times). Outlook The Eurozone crisis continues to affect confidence and activity levels around the world. Markets remain volatile and the future regulatory landscape is still uncertain. Investec has made progress, building further scale in its wealth and asset management businesses and maintaining its absolute level of profitability since the financial crisis began. The group`s diversified business model continues to demonstrate strong defensive qualities and the Board believes that the group`s experienced management team will continue to navigate a steady course through this period of instability. On behalf of the boards of Investec plc and Investec Limited Hugh Herman Stephen Koseff Bernard Kantor Chairman Chief Executive Officer Managing Director 16 November 2011 Additional information On 09 September 2011 Investec announced a recommended all share offer for The Evolution Group plc. The transaction is being implemented via a Scheme of Arrangement and at a Court meeting on 27 October 2011, Evolution shareholders voted by the requisite majority to approve the Scheme to implement the acquisition. The transaction is expected to complete by mid-December, subject to all necessary regulatory approvals being received. Investec believes that the Evolution business represents a compelling strategic fit and that the combination of Investec`s existing private client investment management business with that of Evolution`s, Williams de Broe business, will create a stronger platform, allowing it to significantly enhance its market position. Furthermore, there is great potential to generate longer term value for the combined business and its employees. Investec also believes a combination of Evolution Securities with Investec Investment Banking will contribute to its existing strategy to be the leading mid-market investment bank in the UK. Notes to the commentary section above - Presentation of financial information Investec operates under a Dual Listed Companies (DLC) structure with premium/primary listings of Investec plc on the London Stock Exchange and Investec Limited on the JSE Limited. In terms of the contracts constituting the DLC structure, Investec plc and Investec Limited effectively form a single economic enterprise in which the economic and voting rights of ordinary shareholders of the companies are maintained in equilibrium relative to each other. The directors of the two companies consider that for financial reporting purposes, the fairest presentation is achieved by combining the results and financial position of both companies. Accordingly, the interim results for Investec plc and Investec Limited present the results and financial position of the combined DLC group under IFRS, denominated in Pounds Sterling. In the commentary above, all references to Investec or the group relate to the combined DLC group comprising Investec plc and Investec Limited. Unless the context indicates otherwise, all comparatives included in the commentary above relate to the six months ended 30 September 2010. Amounts represented on a currency neutral basis assume that the closing exchange rates of the group`s relevant exchange rates, as reflected below, remain the same as at 30 September 2011 when compared to 31 March 2011. - Foreign currency impact The group`s reporting currency is Pounds Sterling. Certain of the group`s operations are conducted by entities outside the UK. The results of operations and the financial condition of the individual companies are reported in the local currencies in which they are domiciled, including Rands, Australian Dollars, Euros and US Dollars. These results are then translated into Pounds Sterling at the applicable foreign currency exchange rates for inclusion in the group`s combined consolidated financial statements. In the case of the income statement, the weighted average rate for the relevant period is applied and, in the case of the balance sheet, the relevant closing rate is used. The following table sets out the movements in certain relevant exchange rates against Pounds Sterling over the period: Six months to Six months to Year to 30 September 2011 30 September 2010 31 March 2011
Currency per Close Ave Close Ave Close Ave GBP1.00 South African 12.62 11.25 11.00 11.29 10.88 11.16 Rand Australian 1.60 1.53 1.63 1.70 1.55 1.65 Dollar Euro 1.16 1.13 1.15 1.18 1.13 1.17 Dollar 1.56 1.63 1.57 1.52 1.60 1.55 Exchange rates between local currencies and Pounds Sterling have fluctuated over the period. The most significant impact arises from the volatility of the Rand. The average exchange rate over the period has remained relatively flat and the closing rate has depreciated by 16.0% since 31 March 2011. - Accounting policies and disclosures These unaudited consolidated financial results have been prepared in terms of the recognition and measurement criteria of International Financial Reporting Standards, and the presentation and disclosure requirements of IAS 34, Interim Financial Reporting and the South African Companies Act 71 of 2008. The accounting policies applied in the preparation of the results for the period ended 30 September 2011 are consistent with those adopted in the financial statements for the year ended 31 March 2011. The financial results have been prepared under the supervision of Glynn Burger the Group Risk and Finance Director. - Restatements and presentation of information Redeemable preference shares At 31 March 2011 the group disclosed a restatement to the balance sheet to present redeemable preference share liabilities as a component of debt securities in issue rather than other liabilities. The impact of this presentational amendment to 30 September 2010 and 30 September 2009 is noted below: Changes to As previously previously GBP`000 Restated reported reported 30 September 2010 Debt securities in issue 2 183 112 1 815 113 367 999 Other liabilities 1 193 942 1 561 941 (367 999) 30 September 2009 Debt securities in issue 1 481 971 1 166 386 315 585 Other liabilities 1 027 133 1 342 718 (315 585) The above change has no impact to the income statement, balance sheet (other than as noted above) or cash flow statement. - Proviso Please note that matters discussed in this announcement may contain forward looking statements which are subject to various risks and uncertainties and other factors, including, but not limited to: - the further development of standards and interpretations under International Financial Reporting Standards (IFRS) applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS; - domestic and global economic and business conditions; and - market related risks. - A number of these factors are beyond the group`s control. - These factors may cause the group`s actual future results, performance or achievements in the markets in which it operates to differ from those expressed or implied. - Any forward looking statements made are based on the knowledge of the group at 16 November 2011. - The information in the announcement for the six months ended 30 September 2011, which was approved by the board of directors on 16 November 2011, does not constitute statutory accounts as defined in Section 435 of the UK Companies Act 2006. Investec plc Ordinary dividend announcement Registration number: 3633621 Share code: INP ISIN: GB00BI7BBQ50 In terms of the DLC structure, Investec plc shareholders who are not South African resident shareholders may receive all or part of their dividend entitlements through dividends declared and paid by Investec plc on their ordinary shares and/or through dividends declared and paid on the SA DAN share issued by Investec Limited. Investec plc shareholders who are South African residents, may receive all or part of their dividend entitlements through dividends declared and paid by Investec plc on their ordinary shares and/or through dividends declared and paid on the SA DAS share issued by Investec Limited. Notice is hereby given that an interim dividend number 19 of 8 pence (2010: 8 pence) per ordinary share has been declared by the board in respect of the six months ended 30 September 2011 payable to shareholders recorded in the members` register of the company at the close of business on Friday, 09 December 2011, which will be paid as follows: - for non-South African resident Investec plc shareholders, through a dividend payment by Investec plc of 8 pence per ordinary share - for South African resident shareholders of Investec plc, through a dividend payment by Investec plc of 0.5 pence per ordinary share and through a dividend paid by Investec Limited, on the SA DAS share equivalent to 7.5 pence per ordinary share The relevant dates for the payment of dividend number 19 are as follows: Last day to trade cum-dividend On the Johannesburg Stock Exchange (JSE) Friday, 02 December 2011 On the London Stock Exchange (LSE) Tuesday, 06 December 2011 Shares commence trading ex-dividend On the Johannesburg Stock Exchange (JSE) Monday, 05 December 2011 On the London Stock Exchange (LSE) Wednesday, 07 December 2011 Record date (on the JSE and LSE) Friday, 09 December 2011 Payment date (on the JSE and LSE) Tuesday, 20 December 2011 Share certificates on the South African branch register may not be dematerialised or rematerialised between Monday, 05 December 2011 and Friday, 09 December 2011, both dates inclusive, nor may transfers between the UK and SA registers take place between Monday, 05 December 2011 and Friday, 09 December 2011, both dates inclusive. Shareholders registered on the South African register are advised that the distribution of 8 pence, equivalent to 103 cents per share, has been arrived at using the Rand/Pound Sterling average buy/sell forward rate, as determined at 11h00 (SA time) on Wednesday, 16 November 2011. By order of the board D Miller Company Secretary 16 November 2011 Investec Limited Ordinary dividend announcement Registration number: 1925/002833/06 Share code: INL ISIN: ZAE000081949 Notice is hereby given that an interim dividend number 112 of 103 cents (2010: 90 cents) per ordinary share has been declared by the board in respect of the six months ended 30 September 2011 payable to shareholders recorded in the members` register of the company at the close of business on Friday,09 December 2011. The relevant dates for the payment of dividend number 112 are as follows: Last day to trade cum-dividend Friday, 02 December 2011 Shares commence trading ex-dividend Monday, 05 December 2011 Record date (on the JSE) Friday, 09 December 2011 Payment date (on the JSE) Tuesday, 20 December 2011 The interim dividend of 103 cents per ordinary share has been determined by converting the Investec plc distribution of 8 pence per ordinary share into Rands using the Rand/Pounds Sterling average buy/sell forward rate at 11h00 (SA time) on Wednesday, 16 November 2011. Share certificates may not be dematerialised or rematerialised between Monday, 05 December 2011 and Friday, 09 December 2011, both dates inclusive. By order of the board B Coetsee Company Secretary 16 November 2011 Investec plc Preference share dividend announcement Registration number: 3633621 Share code: INPP ISIN: GB00B19RX541 Non-redeemable non-cumulative non-participating preference shares Declaration of dividend number 11 Notice is hereby given that preference dividend number 11 has been declared for the period 01 April 2011 to 30 September 2011 amounting to 7.52 pence per share payable to holders of the non-redeemable non-cumulative non-participating preference shares as recorded in the books of the company at the close of business on Friday, 02 December 2011. For shares trading on the Johannesburg Stock Exchange (JSE), the dividend of 7.52 pence per share is equivalent to 97 cents per share, which has been determined using the Rand/Pound Sterling average buy/sell forward rate as at 11h00 (SA Time) on Wednesday, 16 November 2011. The relevant dates relating to the payment of dividend number 11 are as follows: Last day to trade cum-dividend On the Johannesburg Stock Exchange (JSE) Friday, 25 November 2011 On the Channel Islands Stock Exchange (CISX) Tuesday, 29 November 2011 Shares commence trading ex-dividend On the Johannesburg Stock Exchange (JSE) Monday, 28 November 2011 On the Channel Islands Stock Exchange (CISX) Wednesday, 30 November 2011 Record date (on the JSE and CISX) Friday, 02 December 2011 Payment date (on the JSE and CISX) Tuesday, 13 December 2011 Share certificates may not be dematerialised or rematerialised between Monday, 28 November 2011 and Friday, 02 December 2011, both dates inclusive, nor may transfers between the UK and SA registers take place between Monday, 28 November 2011 and Friday, 02 December 2011, both dates inclusive. By order of the board D Miller Company Secretary 16 November 2011 Investec plc Rand denominated preference share dividend announcement Registration number: 3633621 Share code: INPPR ISIN: GB00B4B0Q974 Rand denominated non-redeemable, non-cumulative, non-participating perpetual preference shares Declaration of dividend number 1 Notice is hereby given that preference dividend number 1 has been declared for the period 29 June 2011 to 30 September 2011 amounting to 220.19 cents per share payable to holders of the Rand denominated non-redeemable non-cumulative non- participating preference shares as recorded in the books of the company at the close of business on Friday, 02 December 2011. The relevant dates relating to the payment of dividend number 1 are as follows: Last day to trade cum-dividend Friday, 25 November 2011 Shares commence trading ex-dividend Monday, 28 November 2011 Record date Friday, 02 December 2011 Payment date Tuesday, 13 December 2011 Share certificates may not be dematerialised or rematerialised between Monday, 28 November 2011 and Friday, 02 December 2011, both days inclusive. By order of the board D Miller Company Secretary 16 November 2011 Investec Limited Preference share dividend announcement Registration number: 1925/002833/06 Share code: INPR ISIN: ZAE000063814 Non-redeemable non-cumulative non-participating preference shares Declaration of dividend number 14 Notice is hereby given that preference dividend number 14 has been declared for the period 01 April 2011 to 30 September 2011 amounting to 315.86 cents per share payable to holders of the non-redeemable non-cumulative non-participating preference shares as recorded in the books of the company at the close of business on Friday, 02 December 2011. The relevant dates for the payment of dividend number 14 are as follows: Last day to trade cum-dividend Friday, 25 November 2011 Shares commence trading ex-dividend Monday, 28 November 2011 Record date Friday, 02 December 2011 Payment date Tuesday, 13 December 2011 Share certificates may not be dematerialised or rematerialised between Monday, 28 November 2011 and Friday, 02 December 2011, both dates inclusive. By order of the board B Coetsee Company Secretary 16 November 2011 Registered office Registered office 2 Gresham Street 100 Grayston Drive London, EC2V 7QP Sandown United Kingdom Sandton 2196 Transfer secretaries Transfer secretaries Computershare Investor Services Computershare Investor Services (Pty) Ltd (Pty) Ltd 70 Marshall Street, 70 Marshall Street, Johannesburg 2001 Johannesburg 2001 Company secretary: Company secretary: D Miller B Coetsee Directors: H S Herman (Chairman) S Koseff* (Chief Executive) B Kantor* (Managing Director) S E Abrahams G F O Alford G R Burger* C A Carolus P K O Crosthwaite O C Dickson H J du Toit* B Fried H Fukuda OBE I R Kantor M P Malungani Sir David Prosser P R S Thomas F Titi *Executive British www.investec.com Date: 17/11/2011 09:00:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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