| Fri 20 Nov 2009, 9:32 | | INLP - Investec Bank - Reviewed interim condensed |
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INL INP INPP
INL INP
INP/INL - Investec Plc / Investec Limited - Unaudited consolidated financial
results in Pounds Sterling for the six months to 30 September 2009
Investec plc
(Registration number 3633621)
JSE Code: INP
ISIN: GB00B17BBQ50
Investec Limited
(Registration number
1925/002833/06)
JSE Code: INL
ISIN: ZAE000081949
Salient Features
30 Sept. 30 Sept. % 31 March
2009 2008 Change 2009
Operating profit before 350,275 318,538 10.0 652,939
impairment of loans and
advances, goodwill, non-
operating items, taxation
and after minorities
(GBP`000)
Operating profit before 215,979 241,758 (10.7) 396,766
goodwill, non-operating
items, taxation and after
minorities (GBP`000)
Earnings attributable to 178,534 189,504 (5.8) 292,022
shareholders (GBP`000)
Adjusted earnings before 160,422 165,632 (3.1) 269,215
goodwill and non-operating
items (GBP`000)
Adjusted earnings per share 24.0 26.3 (8.7) 42.4
(before goodwill and non-
operating items) (pence)
Earnings per share (pence) 22.2 25.6 (13.3) 38.5
Headline earnings per share 20.4 25.4 (19.7) 41.2
(pence)
Dividends per share (pence) 8.0 8.0 - 13.0
Dividends per share (cents) 100.0 128.0 (21.9) 194.0
Tangible net asset value per 296.9 233.2 27.3 266.3
share (pence)
Third party assets under 62,855 51,798 20.9 48,828
management (GBP million)
Combined consolidated income statement
6 months to 6 months to Year to
30 Sept. 30 Sept. 31 March
GBP`000 2009 2008 2009
Interest income 974,116 1,335,403 2,596,913
Interest expense (676,759) (991,775) (1,902,882)
Net interest income 297,357 343,628 694,031
Fee and commission income 256,650 332,610 592,814
Fee and commission expense (30,222) (30,822) (61,292)
Principal transactions 230,821 82,298 276,521
Operating income from associates 5,929 7,724 12,438
Investment income on assurance 68,573 26,682 74,584
activities
Premiums and reinsurance 2,179 13,106 18,773
recoveries on insurance contracts
Other operating income/(loss) 10,470 (13,744) (30,240)
Other income 544,400 417,854 883,598
Claims and reinsurance premiums on (68,777) (37,753) (88,108)
insurance business
Total operating income net of 772,980 723,729 1,489,521
insurance claims
Impairment losses on loans and (134,296) (76,780) (256,173)
advances
Operating income 638,684 646,949 1,233,348
Administrative expenses (417,960) (405,480) (803,158)
Depreciation, amortisation and (15,588) (14,439) (30,102)
impairment of property, equipment
and intangibles
Operating profit before goodwill 205,136 227,030 400,088
Goodwill (1,234) - (32,467)
Operating profit 203,902 227,030 367,621
Profit on disposal of group - - 721
operations
Profit before taxation 203,902 227,030 368,342
Taxation (36,211) (52,254) (81,675)
Profit after taxation 167,691 174,776 286,667
Losses attributable to minority 10,843 14,728 5,355
interests
Earnings attributable to 178,534 189,504 292,022
shareholders
Earnings attributable to 178,534 189,504 292,022
shareholders
Goodwill 1,234 - 32,467
Goodwill attributable to - - (8,677)
minorities
Profit on disposal of group - - (721)
operations, net of taxation
Preference dividends (29,922) (28,749) (47,503)
Additional earnings attributable 10,576 4,877 1,627
to other equity holders
Adjusted earnings before goodwill 160,422 165,632 269,215
and non-operating items
Further adjustments to derive (24,005) (6,000) (7,588)
headline earnings (headline
adjustments)
Headline earnings 136,417 159,632 261,627
Earnings per share (pence)
- basic 22.2 25.6 38.5
- diluted 21.2 24.5 36.1
Adjusted earnings per share
(pence)
- basic 24.0 26.3 42.4
- diluted 22.9 25.2 39.7
Headline earnings per share
(pence)
- basic 20.4 25.4 41.2
- diluted 19.5 24.3 38.6
Dividends per share 8.0 8.0 13.0
Number of weighted average shares 669.2 629.0 634.6
- basic (millions)
Combined summarised consolidated statement of comprehensive income
6 months to 6 months to Year to
30 Sept. 30 Sept. 31 March
GBP`000 2009 2008 2009
Profit after taxation 167,691 174,776 286,667
Fair value movements on cash flow 9,905 (4,477) (16,293)
hedges
Fair value movements on available 18,192 342 (4,223)
for sale assets
Foreign currency movements 111,476 64,474 215,653
Pension fund actuarial losses - - (9,722)
Total recognised income and 307,264 235,115 472,082
expenses
Total recognised income and (3,018) (4,022) 21,285
expenses attributable to minority
shareholders
Total recognised income and 257,815 199,055 376,020
expenses attributable to ordinary
shareholders
Total recognised income and 52,467 40,082 74,777
expenses attributable to perpetual
preferred securities
Total recognised income and 307,264 235,115 472,082
expenses
Combined consolidated balance sheet
30 Sept. 31 March 30 Sept.
GBP`000 2009 2009 2008
Assets
Cash and balances at central banks 1,474,204 1,105,089 410,744
Loans and advances to banks 1,779,104 2,018,089 2,574,796
Cash equivalent advances to 496,792 396,173 484,996
customers
Reverse repurchase agreements and 560,424 569,770 1,124,368
cash collateral on securities
borrowed
Trading securities 3,569,743 2,313,845 2,134,927
Derivative financial instruments 1,453,804 1,582,908 1,261,730
Investment securities 1,236,293 1,063,569 809,348
Loans and advances to customers 16,438,919 15,390,519 13,882,520
Loans and advances to customers - 1,873,778 1,897,878 1,697,373
Kensington warehouse assets
Securitised assets 5,369,003 5,628,347 5,547,412
Interest in associated 98,467 93,494 87,045
undertakings
Deferred taxation assets 139,611 136,757 87,259
Other assets 1,022,061 894,062 1,001,754
Property and equipment 159,062 174,532 150,468
Investment properties 200,695 189,156 161,207
Goodwill 260,987 255,972 273,928
Intangible assets 35,914 34,402 31,584
36,168,861 33,744,562 31,721,459
Other financial instruments at
fair value through income in
respect of
- liabilities to customers 4,162,088 3,358,338 3,308,208
- assets related to reinsurance 3,196 1,768 909,121
contracts
40,334,145 37,104,668 35,938,788
Liabilities
Deposits by banks 3,050,282 3,781,153 3,703,112
Deposits by banks - Kensington 1,354,737 1,412,961 1,389,603
warehouse funding
Derivative financial instruments 1,154,535 1,196,326 862,124
Other trading liabilities 305,770 344,561 451,856
Repurchase agreements and cash 655,556 915,850 1,165,651
collateral on securities lent
Customer accounts 18,013,512 14,572,568 12,898,703
Debt securities in issue 1,166,386 1,014,871 875,818
Liabilities arising on 4,749,629 5,203,473 5,371,746
securitisation
Current taxation liabilities 168,088 155,395 125,561
Deferred taxation liabilities 139,283 120,135 98,233
Other liabilities 1,342,718 1,264,144 1,308,836
Pension fund liabilities 934 1,212 -
32,101,430 29,982,649 28,251,243
Liabilities to customers under 4,155,535 3,352,863 3,288,073
investment contracts
Insurance liabilities, including 6,553 5,475 20,135
unit-linked liabilities
Reinsured liabilities 3,196 1,768 909,121
36,266,714 33,342,755 32,468,572
Subordinated liabilities 1,074,041 1,141,376 1,110,783
37,340,755 34,484,131 33,579,355
Equity
Called up share capital 195 190 177
Perpetual preference share capital 151 151 151
Share premium 1,861,329 1,769,040 1,683,510
Treasury shares (74,208) (173,068) (126,955)
Other reserves 150,510 42,509 (66,665)
Retained income 734,845 658,129 574,250
Shareholders` equity excluding 2,672,822 2,296,951 2,064,468
minority interests
Minority interests 320,568 323,586 294,965
- Perpetual preferred securities 307,330 295,084 257,134
issued by subsidiaries
- Minority interests in partially 13,238 28,502 37,831
held subsidiaries
Total equity 2,993,390 2,620,537 2,359,433
Total liabilities and equity 40,334,145 37,104,668 35,938,788
Segmental geographic and business analysis of operating profit before goodwill,
non-operating items and taxation for the six months to 30 September 2009
United
Kingdom
Southern and Total
GBP`000 Africa Europe Australia group
Private Banking 8,283 8,754 (328) 16,709
Private Client Portfolio
Management and 6,619 5,389 - 12,008
Stockbroking
Capital Markets 30,695 41,161 1,781 73,637
Investment Banking 27,192 (1,527) 1,119 26,784
Asset Management 21,419 7,513 - 28,932
Property Activities 9,464 619 1,650 11,733
Group Services and Other 21,485 24,816 (125) 46,176
Operating profit after 125,157 86,725 4,097 215,979
minorities
Minority interest - equity (10,843)
Operating profit before 205,136
goodwill
Segmental geographic and business analysis of operating profit before goodwill,
non-operating items and taxation for the six months to 30 September 2008
United
Kingdom
Southern and Total
GBP`000 Africa Europe Australia group
Private Banking 22,614 35,080 5,532 63,226
Private Client Portfolio
Management and 6,549 6,579 - 13,128
Stockbroking
Capital Markets 31,212 39,488 1,430 72,130
Investment Banking 29,402 1,199 (2,045) 28,556
Asset Management 22,495 11,189 - 33,684
Property Activities 11,173 (363) 334 11,144
Group Services and Other 34,199 (18,287) 3,978 19,890
Operating profit after 157,644 74,885 9,229 241,758
minorities
Minority interest - equity (14,728)
Operating profit before 227,030
goodwill
Combined summarised consolidated cash flow statement
6 months to 6 months to Year to
30 Sept. 30 Sept. 31 March
GBP`000 2009 2008 2009
Cash inflows from operations 300,664 284,850 631,378
(Increase)/decrease in (355,873) (1,163,368) 46,724
operating assets
Increase/(decrease) in 405,987 666,641 (323,255)
operating liabilities
Net cash inflow/(outflow) 350,778 (211,877) 354,847
from operating activities
Net cash inflow/(outflow) 2,195 (22,981) (63,670)
from investing activities
Net cash outflow from (20,229) (83,206) (184,981)
financing activities
Effects of exchange rate 172,102 53,136 226,277
changes on cash and cash
equivalents
Net increase/(decrease) in 504,846 (264,928) 332,473
cash and cash equivalents
Cash and cash equivalents at 2,284,349 1,951,876 1,951,876
the beginning of the period
Cash and cash equivalents at 2,789,195 1,686,948 2,284,349
the end of the period
Cash and cash equivalents is 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 summarised consolidated statement of changes in equity
6 months to 6 months to Year to
30 Sept. 30 Sept. 31 March
GBP`000 2009 2008 2009
Balance at the beginning of 2,620,537 2,210,019 2,210,019
the period
Foreign currency movements 111,476 64,474 215,653
Profit attributable to 178,534 189,504 292,022
ordinary shareholders
Losses attributable to (10,843) (14,728) (5,355)
minority interests
Fair value movements on cash 9,905 (4,477) (16,293)
flow hedges
Fair value movements on 18,192 342 (4,223)
available for sale assets
Transfer to pension fund - - (9,722)
deficit
Total recognised income and 307,264 235,115 472,082
expenses
Share based payments 25,000 21,857 92,848
adjustments
Dividends paid to ordinary (35,833) (89,092) (143,995)
shareholders
Dividends paid to perpetual (29,922) (28,749) (47,503)
preference shareholders
Issue of ordinary shares 87,572 22,162 91,764
Share issue expenses (3,554) - -
Movement of treasury shares 22,326 (12,051) (58,164)
Issue of equity instruments - - 3,486
by subsidiaries
Movement of minorities on - 172 -
disposals and acquisitions
Balance at the end of the 2,993,390 2,359,433 2,620,537
period
Commentary
Investec plc and Investec Limited (combined results)
Unaudited combined consolidated financial results in Pounds Sterling for the six
months ended 30 September 2009.
Overall performance
Investec has maintained its focus on managing risk, holding capital and
preserving liquidity. This, together with the group`s geographical and
operational diversity has delivered a satisfactory first half performance.
Although improving, operating fundamentals remain mixed with activity levels
below historic trends. In addition, lower average funds under management and an
increase in impairments have resulted in an 8.7% decline in adjusted earnings
per share (EPS) before goodwill and non-operating items to 24.0 pence (2008:
26.3 pence). This performance is however, significantly ahead of that of the
second half of the 2009 financial year.
The main features of the period under review are:
* Operating profit before goodwill, non-operating items and taxation and after
minorities ("operating profit") and before impairment losses on loans and
advances increased 10.0% to GBP350.3 million (2008: GBP318.5 million).
* Operating profit decreased 10.7% to GBP216.0 million (2008: GBP241.8 million).
* Adjusted earnings attributable to shareholders before goodwill and non-
operating items decreased 3.1% to GBP160.4 million (2008: GBP165.6 million).
* Net asset value per share increased by 8.6% to 335.5 pence (31 March 2009:
308.8 pence) and net tangible asset value per share (which excludes goodwill and
intangible assets) increased by 11.5% to 296.9 pence (31 March 2009: 266.3
pence).
* Core loans and advances to customers increased 6.9% to GBP17.3 billion (31
March 2009: GBP16.2 billion) - a decrease of 1.3% on a currency neutral basis.
* Third party assets under management increased by 28.7% to GBP62.8 billion (31
March 2009: GBP48.8 billion).
* Customer accounts (deposits) increased 23.6% to GBP18.0 billion (31 March
2009: GBP14.6 billion).
* Cash and near cash balances amounted to GBP6.6 billion (31 March 2009: GBP4.9
billion).
* Core advances (excluding own originated securitised assets) as a percentage of
customer deposits improved from 103.6% at 31 March 2009 to 89.5%.
* Tier 1 capital adequacy ratios have strengthened in both Investec plc and
Investec Limited (refer to "Operational review" section below).
* Low gearing ratios represented by core loans and advances to equity at 5.8
times (31 March 2009: 6.2 times) and total assets (excluding assurance assets)
to equity at 12.1 times (31 March 2009: 12.9 times).
* The board declared a dividend of 8.0 pence per ordinary share (2008: 8.0
pence) resulting in a dividend cover based on the group`s adjusted EPS before
goodwill and non-operating items of 3.0 times (2008: 3.3 times), consistent with
the group`s dividend policy, as revised in November 2008.
Operational review
Liquidity and funding
A core strategy for many years has been the maintenance of cash reserves and a
stock of readily available, high quality liquid assets well in excess of minimum
regulatory requirements. During the period the group has on average held
approximately GBP5.4 billion of cash and near cash to support its activities.
These balances have ranged between GBP4.3 billion and GBP6.8 billion over the
period, representing 20% to 30% of the group`s liability base. The group
continues to focus on diversifying its funding sources and maintaining a low
reliance on interbank wholesale funding to fund core lending. Customer deposits
have increased substantially as a result of a number of initiatives implemented
across the group, with average monthly net flows for the period amounting to
GBP570 million.
Capital adequacy
The group holds capital well in excess of regulatory requirements and intends to
perpetuate this philosophy and ensure that it remains well capitalised in a
vastly changing banking world. Accordingly, as announced in November 2008, the
group has adjusted its capital adequacy targets and is focusing on increasing
its capital base, targeting a minimum tier one capital ratio of 11% and a total
capital adequacy ratio of 14% to 17% on a consolidated basis for Investec plc
and Investec Limited, respectively. Investec has made good progress in this
regard and has achieved its Tier 1 targets in the period.
Basel II ratios 30 Sep 2009 31 Mar 2009 30 Sep 2008
Investec plc
Capital adequacy ratio 15.5% 16.2% 16.1%
Tier 1 ratio 11.0% 10.1% 9.7%
Capital adequacy- pre operational 17.7% 18.6% 18.3%
risk
Tier 1 ratio - pre operational risk 12.6% 11.6% 11.0%
Investec Limited
Capital adequacy ratio 14.7% 14.2% 13.9%
Tier 1 ratio 11.3% 10.8% 10.3%
Capital adequacy- pre operational 16.7% 16.0% 15.4%
risk
Tier 1 ratio - pre operational risk 12.8% 12.2% 11.5%
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 the Capital Markets division
primarily transacts with mid to large sized corporates, public sector bodies and
institutions. Investec continues to focus on asset quality and credit risk in
all geographies. Impairments and defaults on core loans and advances have
increased in line with guidance previously provided, as detailed in the
"Financial statement analysis" below.
Business unit review
Private Client Activities
Private Client Activities, comprising Private Bank and Private Client Portfolio
Management and Stockbroking divisions, reported a decline in operating profit of
62.4% to GBP28.7 million (2008: GBP76.3 million).
Private Banking
Operating profit from the Private Banking division decreased by 73.6% to GBP16.7
million. (2008: GBP63.2 million). Activity levels have declined and impairment
losses on loans and advances have increased in all geographies. The private
client core lending book grew by 8.8% to GBP12.1 billion (31 March 2009: GBP11.1
billion) and the division increased its deposit book by 25.8% to GBP9.7 billion
(31 March 2009: GBP7.7 billion). Funds under advice increased 3.1% to GBP3.4
billion (31 March 2009: GBP3.3 billion).
Private Client Portfolio Management and Stockbroking
Private Client Portfolio Management and Stockbroking reported a decrease in
operating profit of 8.5% to GBP12.0 million (2008: GBP13.1 million). The Private
Client business in South Africa was negatively impacted by lower turnover and
average funds under management. The results of the UK operations include
Investec`s 47.3% share of the post-tax profit of Rensburg Sheppards plc.
Capital Markets
Capital Markets reported an increase in operating profit of 2.1% to GBP73.6
million (2008: GBP72.1 million). The division has experienced reasonable levels
of activity across the advisory businesses and has also taken advantage of
select debt and credit opportunities. Trading and balance sheet management
activities have, however, been impacted by the lower rate environment and
declining volatility and impairments have increased across all geographies. Core
loans and advances increased 1.8% to GBP4.9 billion from GBP4.8 billion at 31
March 2009. Kensington Group plc ("Kensington") produced a stable performance
and reported operating profit of GBP25.1 million (2008: GBP19.3 million).
Investment Banking
The Investment Banking division reported a decrease of 6.2% in operating profit
to GBP26.8 million (2008: GBP28.6 million). The Agency divisions closed fewer
transactions in comparison to the prior year and commissions were impacted by
lower volumes. The Principal Investments division recorded a solid result,
primarily driven by an improved performance from some of the investments held in
the UK and Australian portfolio.
Asset Management
Asset Management reported a decrease in operating profit of 14.1% to GBP28.9
million (2008: GBP33.7 million) largely as a result of lower average funds under
management. The division continued to benefit from good investment performance
and substantial net inflows. Since 31 March 2009, assets under management
increased by 32.6% from GBP28.8 billion to GBP38.2 billion.
Property Activities
Property Activities generated an increase in operating profit of 5.3% to GBP11.7
million (2008: GBP11.1 million). The results of the division, based mainly in
South Africa, were supported by a satisfactory performance from the investment
property portfolio.
Group Services and Other Activities
Group Services and Other Activities contributed GBP46.2 million to operating
profit (2008: GBP19.9 million). The Central Funding division performed well
benefiting from the repurchase of group debt, partially offset by a lower return
on surplus cash.
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 has increased by 6.8% to GBP773.0
million (2008: GBP723.7 million). Material movements in total operating income
are analysed below.
Net interest income decreased by 13.5% to GBP297.4 million (2008: GBP343.6
million) largely as a result of the endowment impact, with a lower return
generated on excess cash held given the declining rate environment.
Net fee and commission income decreased by 25.0% to GBP226.4 million (2008:
GBP301.8 million). Transactional activity and average asset levels, although
improving, have been impacted by the economic environment over the period.
Income from principal transactions increased from GBP82.3 million to GBP230.8
million. The group has benefitted from the repurchase of its debt, opportunities
taken in the dislocated credit markets and good trading conditions across all
geographies.
Operating income from associates decreased by 23.2% to GBP5.9 million (2008:
GBP7.7 million). The figure includes Investec`s 47.3% share of the post-tax
profit of Rensburg Sheppards plc for the six months ended 30 September 2009.
The consolidation of the operating results of certain investments held within
the group`s Private Equity portfolio is partly reflected in other operating
income/loss, which increased from a loss of GBP13.7 million to a gain of GBP10.5
million.
As a result of the foregoing factors, recurring income as a percentage of total
operating income decreased to 61.1% (2008: 74.3%).
Impairment losses on loans and advances
The weaker credit cycle has caused a decline in the performance of the group`s
loan portfolio. In line with previous guidance provided, impairment losses on
loans and advances have increased from GBP48.3 million to GBP94.3 million
(excluding Kensington). The credit loss charge as a percentage of average gross
core loans and advances is 1.1%, in line with 31 March 2009. The percentage of
default loans (net of impairments but before taking collateral into account) to
core loans and advances has increased from 3.3% to 3.9% since 31 March 2009. The
ratio of collateral to default loans (net of impairments) remains satisfactory
at 1.28 times (31 March 2009: 1.22 times).
Impairment losses on loans and advances relating to the Kensington business
amount to GBP40.0 million (2008: GBP28.5 million). The total Kensington book has
been managed down to GBP4.9 billion from GBP5.2 billion at 31 March 2009. The
percentage of accounts in arrears has increased as the book continues to run
off.
Administrative expenses and depreciation
The ratio of total operating expenses to total operating income improved to
56.1% from 58.0%.
Total expenses increased by 3.2% to GBP433.5 million (2008: GBP419.9 million).
Variable remuneration decreased by 15.0% to GBP69.4 million. Other operating
expenses increased by 7.7% to GBP364.1 million largely as a result of the
appreciation of the Rand. Total headcount is being tightly managed and has
decreased by 5.6%.
Impairment of goodwill
The current period goodwill impairment relates to Asset Management businesses
acquired in prior years.
Taxation
The operational effective tax rate of the group decreased from 23.8% to 18.2% as
a result of certain legislative changes in the UK and an increase in income
earned that is subject to lower tax rates or is non-taxable.
Losses attributable to minority interests
Losses attributable to minority interests of GBP10.8 million largely comprise:
* GBP8.7 million relating to investments consolidated in the Private Equity
division;
* GBP2.3 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 profit
arising on the hedge is reflected in operating profit before goodwill with the
equal and opposite impact reflected in earnings attributable to minorities).
Balance sheet analysis
Since 31 March 2009:
* Total shareholders` equity (including minority interests) increased by 14.2%
to GBP3.0 billion largely as a result of retained earnings, foreign currency
translation gains and the issue of shares.
* Total assets increased from GBP37.1 billion to GBP40.3 billion largely as a
result of increased cash holdings and movement in exchange rates.
* The return on annualised adjusted average shareholders` equity remained at
14.8%.
Strategy
Investec is a focused, specialist banking and asset management group striving to
be distinctive in all that it does. In order to deliver value to shareholders
through economic cycles and achieve the group`s growth objectives the group will
focus on:
* Selectively growing its loan portfolio, diversifying its deposit base and
shifting emphasis to increasing the proportion of its non-lending revenue base;
* Strictly managing risk, liquidity and capital;
* Creating additional operational efficiencies and containing costs;
* Building business depth rather than business breadth by deepening existing
client relationships and generating high quality income through diversified,
sustainable revenue streams.
Outlook
Over the past two years the group has successfully focused on maintaining a
sound balance sheet, increasing both capital and liquidity. The group`s trading
performance in the first half was comfortably ahead of the second half of last
year. Looking ahead, assets under management have grown substantially,
impairments appear to have peaked, and the group`s business divisions appear to
be moving onto the front foot. The group believes that it is well placed to
capitalise on a much changed banking landscape.
On behalf of the boards of Investec plc and Investec Limited
Hugh Herman Stephen Koseff Bernard Kantor
Chairman Chief Executive Managing Director
Officer
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 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 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 period:
Year to date 30 Sep 2009 31 Mar 2009 30 Sep 2008
Currency per Close Ave Close Ave Close Ave
GBP1.00
South African 11.99 12.74 13.58 14.83 14.98 14.95
Rand
Australian 1.81 1.87 2.07 2.19 2.26 2.12
Dollar
Euro 1.09 1.11 1.08 1.21 1.27 1.26
Dollar 1.60 1.61 1.43 1.73 1.78 1.94
Exchange rates between local currencies and Pounds Sterling have fluctuated over
the period. The most significant impact arises from the appreciation of the
Rand. The average exchange rate over the period has appreciated by 14.8% and the
closing rate has appreciated by 11.7% since 31 March 2009.
* Accounting policies and disclosures
The accounting policies applied in the preparation of the results for the period
ended 30 September 2009 are consistent with those adopted in the financial
statements for the year ended 31 March 2009,except for the adoption of the
following standards and interpretations:
* IAS 1 Presentation of Financial Statements (revised)
* IFRIC 13 Customer Loyalty Programmes
The adoption of these standards and interpretations had no material effect on
the results and no resulting prior year restatements.
These preliminary condensed consolidated financial statements have been prepared
in terms of the recognition and measurement criteria of International Financial
Reporting Standards, and the presentation and disclosure requirements of IAS34,
Interim Financial Reporting.
* 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
19 November 2009.
* The information in this announcement for six months to 30 September 2009,
which was approved by the board of directors on 18 November 2009, does not
constitute statutory accounts as defined in Section 435 of the UK Companies Act
2006 ("Act"). Statutory accounts for the year ended 31 March 2009, which
contained an unqualified audit report, have been delivered to the Registrar of
Companies in accordance with the Act.
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 an interim dividend (No. 15) of 8.0 pence (2008: 8.0
pence) per ordinary share has been declared by the board in respect of the six
months ended 30 September 2009 payable to shareholders recorded in the members`
register of the company at the close of business on Friday, 11 December 2009,
which will be paid as follows:
* for non-South African resident Investec plc shareholders, through a dividend
payment by Investec plc of 8.0 pence per ordinary share
* for South African resident shareholders of Investec plc, through a dividend
payment by Investec plc of 3.0 pence per ordinary share and through a dividend
paid, on the SA DAS share equivalent to 5.0 pence per ordinary share
The relevant dates for the payment of the dividends are as follows:
Last day to trade cum-dividend
On the London Stock Exchange (LSE) Tuesday, 08 December 2009
On the Johannesburg Stock Exchange Friday, 04 December 2009
(JSE)
Shares commence trading ex-dividend
On the London Stock Exchange (LSE) Wednesday, 09 December 2009
On the Johannesburg Stock Exchange Monday, 07 December 2009
(JSE)
Record date (on the LSE and the JSE) Friday, 11 December 2009
Payment date (on the LSE and the JSE) Friday, 18 December 2009
Share certificates on the South African branch register may not be
dematerialised or rematerialised between Monday, 07 December 2009 and Friday, 11
December 2009, both dates inclusive, nor may transfers between the UK and SA
registers take place between Monday, 07 December 2009 and Friday, 11 December
2009, both dates inclusive.
Shareholders registered on the South African register are advised that the
distribution of 8.0 pence, equivalent to 100.0 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, 18 November 2009.
By order of the board
D Miller
Company Secretary
18 November 2009
Investec Limited
Notice is hereby given that an interim dividend (No. 108) of 100.0 cents (2008:
128.0 cents) per ordinary share has been declared by the board in respect of the
six months ended 30 September 2009 payable to shareholders recorded in the
members` register of the company at the close of business on Friday, 11 December
2009.
The relevant dates for the payment of the dividend are as follows:
Last day to trade cum-dividend Friday, 04 December 2009
Shares commence trading ex-dividend Monday, 07 December 2009
Record date Friday, 11 December 2009
Payment date Friday, 18 December 2009
The interim dividend of 100.0 cents per ordinary share has been determined by
converting the Investec plc distribution of 8.0 pence per ordinary share into
Rands using the Rand/Pound Sterling average buy/sell forward rate at 11h00 (SA
time) on Wednesday, 18 November 2009.
Share certificates may not be dematerialised or rematerialised between Monday,
07 December 2009 and Friday, 11 December 2009, both dates inclusive.
By order of the board
B Coetsee
Company Secretary
18 November 2009
Non-redeemable non-cumulative non-participating preference shares dividend
announcements
Investec plc
Share Code: INPP
ISIN: GB00B19RX541
Declaration of dividend number 7
Notice is hereby given that preference dividend number 7 has been declared for
the period 01 April 2009 to 30 September 2009 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, 27 November 2009.
For shares trading on the Johannesburg Stock Exchange (JSE), the dividend of
7.52 pence per share is equivalent to 94.0 cents per share, which has been
determined using the Rand/Pound Sterling average buy/sell forward rate as at
11h00 (SA Time) on Wednesday, 18 November 2009.
The relevant dates relating to the payment of dividend number 7 are as follows:
Last day to trade cum-dividend
On the Johannesburg Stock Exchange Friday, 20 November 2009
(JSE)
On the Channel Islands Stock Exchange Tuesday, 24 November 2009
(CISX)
Shares commence trading ex-dividend
On the Johannesburg Stock Exchange Monday, 23 November 2009
(JSE)
On the Channel Islands Stock Exchange Wednesday, 25 November 2009
(CISX)
Record date (on the JSE and CISX) Friday, 27 November 2009
Payment date (on the JSE and CISX) Tuesday, 08 December 2009
Share certificates may not be dematerialised or rematerialised between Monday,
23 November 2009 and Friday, 27 November 2009, both dates inclusive, nor may
transfers between the UK and SA registers may take place between Monday, 23
November 2009 and Friday, 27 November 2009, both dates inclusive.
By order of the board
D Miller
Company Secretary
18 November 2009
Investec Limited
Share Code: INPR
ISIN: ZAE 000063814
Declaration of dividend number 10
Notice is hereby given that preference dividend number 10 has been declared for
the period 01 April 2009 to 30 September 2009 amounting to 398.91 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, 27 November 2009.
The relevant dates for the payment of dividend number 10 are as follows:
Last day to trade cum-dividend Friday, 20 November 2009
Shares commence trading ex-dividend Monday, 23 November 2009
Record date Friday, 27 November 2009
Payment date Tuesday, 08 December 2009
Share certificates may not be dematerialised or rematerialised between Monday,
23 November 2009 and Friday, 27 November 2009, both dates inclusive.
By order of the board
B Coetsee
Company Secretary
18 November 2009
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.
Registered office Registered office
2 Gresham Street 100 Grayston Drive
London, EC2V 7QP Sandown
United Kingdom Sandton 2196
Transfer secretaries Transfer secretaries
Computershare Investor Computershare Investor
Services (Pty) Ltd Services (Pty) Ltd
70 Marshall Street 70 Marshall Street
Johannesburg, 2001 Johannesburg, 2001
Company secretary: D Miller+ Company secretary: 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, H Fukuda OBE+, G M T Howe+, I R Kantor, Sir Chips Keswick+, M P
Malungani, Sir David Prosser+, A Tapnack*+, P R S Thomas, F Titi.
*Executive +British
Date: 19/11/2009 09:00:01 Produced by the JSE SENS Department.
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