| Thu 15 May 2008, 8:00 | | INL / INP - Investec - Unaudited Combined Consolid |
|
INL INP INPR INPP
INL INP
INL / INP - Investec - Unaudited Combined Consolidated Financial Results In
Pounds Sterling For The Year Ended 31 March 2008
Investec Limited
Incorporated in the Republic of South Africa
Registration number 1925/002833/06
JSE share code: INL
ISIN: ZAE000081949
Investec plc
Incorporated in England and Wales
Registration number 3633621
JSE share code: INP
ISIN: GB00B17BBQ50
Investec plc and Investec Limited (combined results)
Unaudited combined consolidated financial results in Pounds Sterling for the
year ended 31 March 2008
Salient Features
31 March 31 March %
2008 2007 Change
Operating profit before goodwill, 537,671 466,585 15.2
non-operating items and taxation
(GBP`000)
Adjusted earnings before goodwill 344,695 300,704 14.6
and non-operating items (GBP`000)
Adjusted earnings per share (before 56.9 53.3 6.8
goodwill and non-operating items)
(pence)
Earnings attributable to 391,558 340,319 15.1
shareholders (GBP`000)
Earnings per share (pence) 57.7 54.7 5.5
Headline earnings per share (pence) 49.7 52.3 (5.0)
Dividends per share (pence) 25.0 23.0 8.7
Dividends per share (cents) 361.5 318.0 13.7
Combined consolidated income statement
Year to 31 March
GBP`000 2008 2007
Interest income 2,083,380 1,233,226
Interest expense (1,499,960) (889,311)
Net interest income 583,420 343,915
Fee and commission income 614,357 577,773
Fee and commission expense (63,061) (56,275)
Principal transactions 276,705 245,463
Operating income from associates 12,138 10,685
Investment income on assurance activities 89,593 36,821
Premiums and reinsurance recoveries on 40,849 80,542
insurance contracts
Other operating income 50,043 49,685
Other income 1,020,624 944,694
Claims and reinsurance premiums on (120,358) (111,492)
insurance business
Total operating income net of insurance 1,483,686 1,177,117
claims
Impairment losses on loans and advances (114,185) (16,530)
Operating income 1,369,501 1,160,587
Administrative expenses (807,500) (680,687)
Depreciation, amortisation and impairment (24,330) (13,315)
of property, equipment and intangibles
Operating profit before goodwill 537,671 466,585
Goodwill (62,765) 2,569
Operating profit 474,906 469,154
Profit on disposal of group operations 72,855 -
Profit before taxation 547,761 469,154
Taxation (127,249) (119,781)
Profit after taxation 420,512 349,373
Earnings attributable to minority 28,954 9,054
interests
Earnings attributable to shareholders 391,558 340,319
420,512 349,373
Earnings attributable to shareholders 391,558 340,319
Goodwill 62,765 (2,569)
Profit on disposal of group operations, (64,345) -
net of taxation
Preference dividends (41,779) (31,850)
Additional earnings attributable to other (3,504) (5,196)
equity holders
Adjusted earnings before goodwill and non- 344,695 300,704
operating items
Further adjusments to derive headline (43,196) (5,823)
earnings
Headline earnings 301,499 294,881
Earnings per share (pence)
- basic 57.7 54.7
- diluted 54.0 50.4
Adjusted earnings per share (pence)
- basic 56.9 53.3
- diluted 53.2 49.2
Headline earnings per share (pence)
- basic 49.7 52.3
- diluted 46.6 48.2
Dividends per share (pence)
- interim 11.5 10.0
- final 13.5 13.0
Number of weighted average shares - basic 606.2 563.8
(millions)
Combined consolidated cash flow statement
Year to 31 March
GBP`000 2008 2007*
Cash inflows from operations 610,449 401,553
Increase in operating assets (654,754) (6,265,563)
Increase in operating liabilities 1,080,435 5,858,320
Net cash inflow/(outflow) from operating 1,036,130 (5,690)
activities
Net cash outflow from investing (66,694) (178,252)
activities
Net cash (outflow)/inflow from financing (54,893) 430,471
activities
Effects of exchange rate changes on cash (97,791) (301,588)
and cash equivalents
Net increase/(decrease) in cash and cash 816,752 (55,059)
equivalents
Cash and cash equivalents at the 1,135,124 1,190,183
beginning of the year
Cash and cash equivalents at the end of 1,951,876 1,135,124
the year
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).
Combined consolidated balance sheet
At 31 March
GBP`000 2008 2007*
Assets
Cash and balances at central banks 788,472 102,751
Loans and advances to banks 2,153,773 2,431,769
Cash equivalent advances to customers 504,382 548,602
Reverse repurchase agreements and cash 794,153 2,324,638
collateral on securities borrowed
Trading securities 1,984,580 2,015,144
Derivative financial instruments 1,305,264 724,492
Investment securities 1,130,872 1,776,601
Loans and advances to customers 14,046,135 9,527,080
Securitised assets 6,082,975 831,742
Interest in associated undertakings 82,576 70,332
Deferred taxation assets 84,493 59,394
Other assets 882,209 1,420,681
Property and equipment 141,352 131,505
Investment properties 134,975 85,424
Goodwill 271,932 195,883
Intangible assets 31,506 35,829
30,419,649 22,281,867
Other financial instruments at fair value
through income in respect of
- liabilities to customers 2,878,894 3,024,997
- assets related to reinsurance 805,009 992,824
contracts
34,103,552 26,299,688
Liabilities
Deposits by banks 3,489,032 2,347,095
Deposits by banks - Kensington warehouse 1,778,438 -
funding
Derivative financial instruments 881,577 509,919
Other trading liabilities 450,580 321,863
Repurchase agreements and cash collateral 382,384 1,765,671
on securities lent
Customer accounts 12,133,120 10,650,102
Debt securities in issue 777,769 1,253,752
Liabilities arising on securitisation 5,760,208 826,627
Current taxation liabilities 132,656 113,967
Deferred taxation liabilities 79,172 48,048
Other liabilities 1,279,373 1,778,488
Pension fund liabilities - 1,467
27,144,309 19,616,999
Liabilities to customers under investment 2,862,916 3,004,254
contracts
Insurance liabilities, including unit- 15,978 20,743
linked liabilities
Reinsured liabilities 805,009 992,824
30,828,212 23,634,820
Subordinated liabilities (including 1,065,321 844,452
convertible debt)
31,893,533 24,479,272
Equity
Called up share capital 177 169
Share premium 1,360,450 1,129,859
Treasury shares (114,904) (109,279)
Equity portion of convertible instruments 2,191 2,191
Perpetual preference shares 272,335 292,173
Other reserves (42,057) 40,545
Profit and loss account 433,012 186,827
Shareholders` equity excluding minority 1,911,204 1,542,485
interests
Minority interests 298,815 277,931
- Perpetual preferred securities issued 251,637 241,081
by subsidiaries
- Minority interests in partially held 47,178 36,850
subsidiaries
Total shareholders` equity 2,210,019 1,820,416
Total liabilities and equity 34,103,552 26,299,688
*As restated for reclassification and corrections detailed in the commentary
section of this report.
Segmental geographic and business analysis of operating profit before goodwill,
non-operating items and taxation for the year ended 31 March 2008
United
Kingdom
and Southern Other Total
GBP`000 Europe Africa Australia Geographies group
Private 91,619 56,760 18,015 - 166,394
Banking
Private 11,929 15,413 - - 27,342
Client
Portfolio
Management
and
Stockbroking
Capital 39,306 68,118 8,326 - 115,750
Markets
Investment 7,607 64,775 4,948 - 77,330
Banking
Asset 24,940 51,881 - - 76,821
Management
Property 144 36,078 99 - 36,321
Activities
Group (10,917) 46,945 1,685 - 37,713
Services and
Other
Activities
Total group 164,628 339,970 33,073 - 537,671
% Change (1.6%) 26.5% 9.7% (100%) 15.2%
since 31
March 2007
Segmental geographic and business analysis of operating profit before goodwill,
non-operating items and taxation for the year ended 31 March 2007
United
Kingdom
and Southern Other Total
GBP`000 Europe Africa Australia Geographies group
Private 96,734 41,413 16,244 - 154,391
Banking
Private 10,065 12,016 - - 22,081
Client
Portfolio
Management
and
Stockbroking
Capital 51,409 56,145 9,737 - 117,291
Markets
Investment 23,294 60,632 7,309 - 91,235
Banking
Asset 17,555 50,557 - - 68,112
Management
Property 1,292 12,852 - - 14,144
Activities
Group (32,967) 35,058 (3,141) 381 (669)
Services and
Other
Activities
Total group 167,382 268,673 30,149 381 466,585
Combined summarised consolidated statement of total recognised income and
expenses
Year to 31 March
GBP`000 2008 2007
Profit after taxation 420,512 349,373
Fair value movements on available for sale (38,907) 12,287
assets
Foreign currency movements (79,591) (184,847)
Pension fund actuarial gains/(losses) 7,619 (2,470)
Total recognised income and expenses 309,633 174,343
Total recognised income and expenses 17,365 (29,931)
attributable to minority shareholders
Total recognised income and expenses 270,327 225,114
attributable to ordinary shareholders
Total recognised income and expenses 21,941 (20,840)
attributable to perpetual preferred
securities
309,633 174,343
Combined summarised consolidated statement of changes in equity
Year to 31 March
GBP`000 2008 2007*
Balance at the beginning of the year 1,820,416 1,512,093
Foreign currency adjustments (79,591) (184,847)
Earnings attributable to ordinary 391,558 340,319
shareholders
Earnings attributable to minority interests 28,954 9,054
Fair value movements on available for sale (38,907) 12,287
assets
Transfer to pension fund deficit 7,619 (2,470)
Total recognised gains and losses for the 309,633 174,343
year
Share based payments adjustments 39,182 33,990
Dividends paid to ordinary shareholders (145,926) (112,592)
Dividends paid to minority shareholders (41,779) (31,850)
Issue of ordinary shares 230,664 47,861
Issue of perpetual preference shares - 131,187
Share issue expenses (65) (1,688)
Movement of treasury shares (5,625) 44,811
Issue of equity instruments by subsidiaries 6,777 20,949
Dividends and capital reductions paid to (3,923) (6,799)
minorities
Movement of minorities on disposals and 665 8,111
acquisitions
Balance at the end of the year 2,210,019 1,820,416
* As restated for reclassifications and corrections detailed in the commentary
section of this report.
Commentary
Investec plc and Investec Limited (combined results)
Unaudited consolidated financial results in Pounds Sterling for the year ended
31 March 2008.
Overall performance
The Investec group has delivered good growth in operational earnings for the
year ended 31 March 2008. The group`s strategy of maintaining a diversified
business model both operationally and geographically has stood it in good stead
over the period, resulting in adjusted earnings per share (EPS) before goodwill
and non-operating items increasing by 6.8% to 56.9 pence (2007: 53.3 pence).
The group assesses its performance against five key growth and financial return
objectives (namely EPS growth, ROE, dividend cover, cost to income and capital
adequacy ratios). The group has met all these targets in the current financial
year other than its stated earnings per share objective (i.e. growth in adjusted
EPS of 10% in excess of the UK retail price index).
The main features of the year under review are:
Operating profit before goodwill, non-operating items and taxation ("operating
profit") increased 15.2% to GBP537.7 million (2007: GBP466.6 million).
Adjusted earnings attributable to ordinary shareholders before goodwill and non-
operating items increased 14.6% to GBP344.7 million (2007: GBP300.7 million).
Earnings attributable to ordinary shareholders after goodwill and non-operating
items increased 15.1% to GBP391.6 million (2007: GBP340.3 million).
The South African and Australian operations posted increases in operating profit
of 26.5% and 9.7%, respectively. The UK operations recorded operating profit
marginally behind the prior period; their results were negatively impacted by
write downs in the Capital Markets Principal Finance division. The group remains
geographically diversified with the UK and Australian operations contributing
36.8% of total operating profit.
Return on adjusted average shareholders` equity (inclusive of compulsorily
convertible instruments) decreased from 26.1% to 23.6% against a target of
greater than 20%.
The ratio of total operating expenses to total operating income improved from
59.0% to 56.1% against a target of below 65%.
Net core loans and advances to customers increased 27.1% to GBP12.8 billion
(2007: GBP10.1 billion).
Third party assets under management decreased 3.4% to GBP54.2 billion (2007:
GBP56.1 billion) largely as a result of the depreciation of the Rand against
Pounds Sterling.
Customer accounts (deposits) increased by 13.9% to GBP12.1 billion (2007:
GBP10.7 billion).
The board proposes an increased final dividend of 13.5 pence per ordinary share
equating to a full year dividend of 25.0 pence (2007: 23.0 pence) resulting in a
dividend cover based on the group`s adjusted EPS before goodwill and non-
operating items of 2.3 times (2007: 2.3 times), consistent with the group`s
dividend policy.
Business unit review
Private Client Activities
Private Client Activities, comprising Private Bank and Private Client Portfolio
Management and Stockbroking divisions, reported growth in operating profit of
9.8% to GBP193.7 million (2007: GBP176.5 million).
* Private Banking
Operating profit from the Private Banking division increased by 7.8% to GBP166.4
million. (2007: GBP154.4 million). Earnings from lending continued to drive
momentum across all geographies. The Private Bank benefited from increased
distribution capacity and greater penetration across all areas of
specialisation, notably Wealth Management and Growth and Acquisition Finance. In
a weaker credit cycle, impairments and defaults increased in all geographies
(refer to Impairment losses on loans and advances below). The private client
core lending book grew by 29.9% to GBP8.9 billion (2007: GBP6.9 billion) and the
division increased its retail deposit book by 18.8% to GBP6.6 billion (2007:
GBP5.6 billion). Funds under advice grew 45.4% to GBP3.7 billion (2007: GBP2.5
billion).
* Private Client Portfolio Management and Stockbroking
Private Client Portfolio Management and Stockbroking reported growth in
operating profit of 23.8% to GBP27.3 million (2007: GBP22.1 million). The
Private Client business in South Africa benefited from the launch of new
products, increased volumes and asset swap activity. Funds under management,
expressed in Rands, increased by 6.8% to R112.7 billion (2007: R105.6 billion).
The results of the UK operations include Investec`s 47.3% share of the
directors` estimate of the post-tax profit of Rensburg Sheppards plc.
Capital Markets
Capital Markets posted a decrease in operating profit of 1.3% to GBP115.8
million (2007: GBP117.3 million). The division`s advisory, structuring and asset
creation activities continued to perform well with a number of mandates
successfully closed in Project Finance, Structured Finance, Equity Finance and
Resource Finance. The division`s treasury and trading activities delivered a
good performance benefiting from increased market volatility. Core loans and
advances increased 22.6% from GBP3.1 billion to GBP3.8 billion. The current
year`s figures include GBP24.3 million pre-tax operating profit for Kensington
Group plc ("Kensington") for the period 8 August 2007 to 31 March 2008.
The performance of the Capital Markets division was however, negatively impacted
by write downs of GBP48.9 million on US structured credit investments held
within the Principal Finance business. The on-balance sheet value of the US
portfolio is GBP71 million of which GBP16 million is dependent on the
performance of the US sub-prime market.
Investment Banking
The Investment Banking division reported a decrease of 15.2% in operating profit
to GBP77.3 million (2007: GBP91.2 million) reflecting a mixed performance across
geographies. The South African operations posted good results supported by a
stable deal pipeline, dividends received, realisations and an increase in value
of underlying investments held. The UK operations were impacted by a lower level
of IPO activity and a weaker performance from some of the investments held
within the Private Equity and Direct Investments division.
Asset Management
Asset Management posted an increase in operating profit of 12.8% to GBP76.8
million (2007: GBP68.1 million) underpinned by a significantly widened
distribution reach, strong retail inflows particularly in the first nine months
of the year and solid long term investment performance. Assets under management
in Pounds Sterling decreased by 3.8% to GBP28.8 billion (2007: GBP29.9 billion)
(assuming a neutral Rand/Pounds Sterling exchange rate would have resulted in an
increase of 3.1% to GBP30.8 billion).
Property Activities
Property Activities generated operating profit of GBP36.3 million (2007: GBP14.1
million), representing growth of 156.8%. The division, based mainly in South
Africa, continued to perform well benefiting from realisations and a solid
contribution from the investment property portfolio.
Group Services and Other Activities
Group Services and Other Activities reported an operating profit of GBP37.7
million (2007: a loss of GBP0.7 million). The Central Funding division performed
well benefiting from a strong increase in net interest income.
Further information on key developments within each of the business units is
provided in a detailed report published on the group`s website:
www.investec.com/grouplinks/investorrelations.
Financial statement analysis
Operating income
Operating income increased by 26.0% to GBP1,484 million (2007: GBP1,177
million). Material movements in total operating income are analysed below.
Net interest income increased by 69.6% to GBP583.4 million (2007: GBP343.9
million) as a result of growth in advances, the acquisition of Kensington, and a
solid performance from the Central Funding division.
Net fees and commissions increased by 5.7% to GBP551.3 million (2007: GBP521.5
million) benefiting from increased transactional activity, particularly in the
first half of the year, and higher average assets under management.
Income from principal transactions increased by 12.7% to GBP276.7 million (2007:
GBP245.5 million). The Growth and Acquisition Finance, Property, Private Equity,
Direct Investments and Capital Markets trading divisions delivered a strong
performance. This result was negatively impacted by write downs on US structured
credit investments.
Operating income from associates increased by 13.6% to GBP12.1 million (2007:
GBP10.7 million). The current year`s figure includes Investec`s 47.3% share of
the directors` estimate of the post-tax profit of Rensburg Sheppards plc for the
year ended 31 March 2008.
Other operating income amounts to GBP50.0 million (2007: GBP49.7 million). The
operating results of two investments held within the Private Equity portfolio
have been consolidated largely into other operating income and administration
expenses.
Impairment losses on loans and advances
As a result of the weaker credit cycle the group has seen a decline in the
performance of the loan portfolio resulting in an increase in impairment losses
on loans and advances from GBP16.5 million to GBP58.8 million (excluding
Kensington). The percentage of gross default loans to core loans and advances
has increased from 1.3% to 1.7% since 31 March 2007. Total impairment coverage
as a percentage of net default loans (gross default loans net of security)
remains satisfactory at 104.9% (2007: 122.7%). Impairment losses on loans and
advances relating to the Kensington business amount to GBP55.4 million.
Administrative expenses and depreciation
Total expenses increased by 19.9% to GBP831.8 million (2007: GBP694.0 million).
Variable remuneration increased slightly from GBP205.8 million to GBP206.7
million. Other operating expenses (excluding variable remuneration) increased by
28.1% to GBP625.1 million largely as a result of an increase in headcount in
certain of the businesses in line with growth initiatives, an increase in costs
associated with complying with regulatory requirements and the acquisition of
Kensington. Total expenses also includes GBP35.4 million from the consolidation
of two private equity investments.
The group achieved the target of less than 65% for operating expenses to total
operating income, with the ratio improving from 59.0% to 56.1%.
Goodwill
The current year goodwill impairment relates to:
An impairment of GBP2.9 million in the South African Asset Management business
relating to businesses acquired in prior years.
An impairment of GBP59.9 million relating to the acquisition of Kensington
taking into account the managed reduction in business volumes and the limited
activity in the securitisation markets.
Profit on disposal of group operations
The sale of the South African property fund management and property
administration business to Growthpoint was approved by the Competition Tribunal
of South Africa on 18 October 2007. A non-operating exceptional gain of GBP72.9
million (pre-tax) was made on the sale of this business.
Taxation
The operational effective tax rate of the group decreased from 26.3% to 22.6% as
a result of certain income accruing in lower tax jurisdictions, and income
earned that is either non-taxable or subject to a lower tax rate.
Earnings attributable to minority interests
Earnings attributable to minority interests of GBP28.9 million largely comprise:
GBP4.8 million relating to investments held in the Private Equity division.
GBP23.4 million relating to Euro denominated preferred securities issued by a
subsidiary of Investec plc which are reflected on the balance sheet as part of
minority interests. The transaction is hedged and a forex transaction gain
arising on the hedge is reflected in operating profit before goodwill with the
equal and opposite impact reflected in earnings attributable to minorities.
Capital resources and total assets
Total shareholders` equity (including minority interests) increased by 21.4% to
GBP2.2 billion (2007: GBP1.8 billion) largely as a result of the issue of
GBP230.7 million of ordinary shares and increased retained earnings.
Net asset value per share increased from 216.0 pence to 260.6 pence and net
tangible asset value per share (which excludes goodwill and intangible assets)
increased from 178.6 pence to 215.0 pence.
Return on adjusted average shareholders` equity (inclusive of compulsorily
convertible instruments) decreased from 26.1% to 23.6% against a target of
greater than 20%.
Disciplined risk and capital management remain a key focus. On balance sheet
assets have increased by 29.7% to GBP34.1 billion (2007:GBP26.3 billion) largely
as a result of the acquisition of Kensington and the growth of core loans and
advances.
The group has successfully implemented Basel II on the standardised approach and
are comfortably meeting those requirements. The capital adequacy of Investec plc
(applying UK Financial Services Authority rules to its capital base) is 15.3%.
The capital adequacy of Investec Limited (applying South African Reserve Bank
rules to its capital base) is 13.9%.
Outlook
The group has a well diversified and resilient business, seasoned management, a
sound balance sheet and strong risk control. This gives us confidence that the
group will be successful in meeting the challenges, and taking advantage of any
opportunities which may arise in the current difficult trading conditions.
On behalf of the boards of Investec plc and Investec Limited
Hugh Herman Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
Notes to the commentary section above
* Presentation of financial information
Investec operates under a Dual Listed Companies (DLC) structure with 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 year end 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 year ended 31 March 2007. Average balances are
based on the period 1 April 2006 to 31 March 2007 and 1 April 2007 to 31 March
2008.
* 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 financial year:
31 March 2008 31 March 2007
Currency per GBP1.00 Year end Average Year end Average
South African Rand 16.17 14.31 14.20 13.38
Australian Dollar 2.18 2.32 2.42 2.47
Euro 1.26 1.42 1.47 1.47
US Dollar 1.99 2.01 1.96 1.90
Exchange rates between local currencies and Pounds Sterling have fluctuated over
the year. The most significant impact arises from the depreciation of the Rand.
The average exchange rate over the year has depreciated by 7.0 % and the closing
rate has depreciated by 13.9 % since 31 March 2007.
* Accounting policies
The year end results are prepared in accordance with the recognition and
measurement requirements of International Financial Reporting Standards. The
accounting policies applied in the preparation of the results for the year ended
31 March 2008 are consistent with those adopted in the financial statements for
the year ended 31 March 2007.
Reclassifications and corrections to prior year financial statements
Comparative figures have been reclassified to conform to changes in presentation
in the current year. These are further described below:
Securitised assets and related liabilities, which continue to be recognised on
balance sheet, are now disclosed as separate line items on the face of the
balance sheet. In prior periods, securitised assets were included within loans
and advances to customers and trading securities and securitised liabilities
were included in debt securities in issue. This change in disclosure follows the
acquisition of Kensington which resulted in a significant increase in these
assets and liabilities, rendering it more appropriate to disclose these
financial instruments on separate lines to provide information more relevant and
useful to users.
Following the implementation and adoption of IFRS 7 , the classification of
certain financial instruments into balance sheet classes were refined to achieve
more appropriate disclosure. Reclassification to the prior year balance sheet
includes:
* GBP131.3 million reclassified from cash equivalent advances to customers to
reverse repurchase agreements and cash collateral on securities borrowed.
* GBP1 265.3 million reclassified from debt securities in issue to customer
accounts
Total assets, total liabilities and amounts recognised in the income statement
were not affected by these reclassifications
Corrections
In the prior year GBP13.7 million of funding raised by certain consolidated
private equity entities was incorrectly classified as minority interest on the
balance sheet. The correct classification was subordinated debt. The impact of
this correction is a reduction to minority interest (equity) from GBP291.7
million to GBP277.9 million at 31 March 2007. There was no effect on reported
earnings or financial reporting periods prior to 31 March 2007.
* Kensington
As outlined in previous announcements Investec plc acquired the entire issued
share capital of Kensington Group plc with effect 8 August 2007. Net assets at
the date of acquisition, total consideration paid and goodwill arising on the
transaction are disclosed in the table below.
GBP`million GBP`million
Value of Investec plc shares issued 216.3
(36,824,432 shares at 587.5 pence)
Acquisition costs 5.0
Kensington net assets at acquisition 147.7
Less: special dividend (13.7)
Less: fair value adjustments (33.8)
100.2
Goodwill arising on acquisition 121.1
Impairment of goodwill (59.9)
Net goodwill as at 31 March 2008 61.2
Challenging credit market conditions have resulted in a significant
restructuring of the business since acquisition in order to maintain a robust
business model that can respond quickly when market conditions change.
Restructuring measures (as outlined in previous announcements) include:
- Managed reduction in new business volumes
- Reduction of overheads
- Tightening of lending criteria
- Appropriate pricing for current market conditions
Warehouse lines of approximately GBP2.0 billion were renewed towards the end of
2007 for a period of 2 to 3 years to support the current strategy.
* 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.
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
15 May 2008.
Ordinary dividend announcements
Investec plc
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 a final dividend (No. 12) has been proposed by the
board in respect of the financial year ended 31 March 2008.
Shareholders in Investec plc will receive a distribution of 13.5 pence (2007:
13.0 pence) per ordinary share, which will be paid as follows:
* for non-South African resident Investec plc shareholders, through a dividend
paid by Investec plc of 13.5 pence per ordinary share.
* for South African resident shareholders of Investec plc, through a dividend
payment by Investec plc of 4.5 pence per ordinary share and through a dividend
paid, on the SA DAS share equivalent to 9.0 pence per ordinary share.
The relevant dates for the payment of the dividends are:
Last day to trade cum-dividend
- On the London Stock Exchange (LSE) Tuesday, 22 July 2008
- On the Johannesburg Stock Exchange Friday, 18 July 2008
(JSE)
Shares commence trading ex-dividend
- On the London Stock Exchange (LSE) Wednesday, 23 July 2008
- On the Johannesburg Stock Exchange Monday, 21 July 2008
(JSE)
Record date (on the LSE and the JSE) Friday, 25 July 2008
Payment date (on the LSE and the JSE) Tuesday, 12 August 2008
Share certificates on the South African branch register may not be
dematerialised or rematerialised between Monday, 21 July 2008 and Friday, 25
July 2008, both dates inclusive, nor may transfers between the UK and SA
registers take place between Monday, 21 July 2008 and Friday, 25 July 2008, both
dates inclusive.
Shareholders registered on the South African register are advised that the total
distribution of 13.5 pence, equivalent to 202 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, 14 May 2008.
By order of the board
D Miller
Company Secretary
15 May 2008
Investec Limited
Notice is hereby given that a final dividend (No. 105) of 202 cents (2007: 180
cents) per ordinary share has been proposed by the board in respect of the
financial year ended 31 March 2008.
The dividend is payable to shareholders recorded in the members` register of the
company at the close of business on Friday, 25 July 2008.
The relevant dates for the payment of the dividend are:
Last day to trade cum-dividend Friday, 18 July 2008
Shares commence trading ex-dividend Monday, 21 July 2008
Record date Friday, 25 July 2008
Payment date Tuesday, 12 August 2008
The final dividend of 202 cents per ordinary share has been determined by
converting the Investec plc distribution of 13.5 pence per ordinary share into
Rands using the Rand/Pounds Sterling average buy/sell forward rate at 11h00 (SA
time) on Wednesday, 14 May 2008.
Share certificates may not be dematerialised or rematerialised between Monday,
21 July 2008 and Friday, 25 July 2008, both dates inclusive.
By order of the board
B Coetsee
Company Secretary
15 May 2008
Non-redeemable non-cumulative non-participating preference shares dividend
announcements
Investec plc
Share Code: INPP
ISIN: GB00B19RX541
Declaration of dividend number 4
Notice is hereby given that preference dividend number 4 has been declared for
the period 1 October 2007 to 31 March 2008 amounting to 32.67 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, 20 June 2008.
For shares trading on the JSE, the dividend of 32.67 pence per share is
equivalent to 485.87 cents per share, which has been determined using the
Rand/Pound Sterling average buy/sell forward rate as at 11h00 (SA Time) on
Wednesday,14 May 2008.
The relevant dates relating to the payment of dividend number 4 are as follows:
Last day to trade cum dividend:
On the Johannesburg Stock Exchange Thursday, 12 June 2008
(JSE)
On the Channel Island Stock Exchange Tuesday, 17 June 2008
(CISX)
Shares commence trading ex dividend:
On the Johannesburg Stock Exchange Friday, 13 June 2008
(JSE)
On the Channel Island Stock Exchange Wednesday, 18 June 2008
(CISX)
Record date (on the JSE and CISX) Friday, 20 June 2008
Payment date (on the JSE and CISX) Thursday, 3 July 2008
Share certificates may not be dematerialised or rematerialised between Friday,
13 June 2008 and Friday, 20 June 2008, both dates inclusive, nor may transfers
between the UK and SA registers take place between Friday, 13 June 2008 and
Friday, 20 June 2008, both dates inclusive.
By order of the board
D Miller
Company Secretary
15 May 2008
Investec Limited
Share Code: INPR
ISIN: ZAE000063814
Declaration of dividend number 7
Notice is hereby given that preference dividend number 7 has been declared for
the period 1 October 2007 to 31 March 2008 amounting to 501.41 cents per share.
The dividend is 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, 20 June 2008.
The relevant dates for the payment of dividend number 7 are as follows:
Last day to trade cum-dividend Thursday, 12 June 2008
Shares commence trading ex-dividend Friday, 13 June 2008
Record date Friday, 20 June 2008
Payment date Thursday, 3 July 2008
Share certificates may not be dematerialised or rematerialised between Friday,
13 June 2008 and Friday, 20 June 2008, both dates inclusive.
By order of the board
B Coetsee
Company Secretary
15 May 2008
Further information
Information provided on the Company`s website at www.investec.com includes:
* Copies of this statement.
* The results presentation.
* Additional report produced for the investment community including more detail
on the results.
* Excel worksheets containing the salient financial information under IFRS in
Pounds Sterling.
Alternatively for further information please contact the
Investor Relations division on e-mail investorrelations@investec.com
or telephone +44 207 597 5546 / +27 11 286 7070.
Date: 15/05/2008 08:00:26 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.
