| Thu 19 May 2011, 10:47 | | INP/INL - Investec plc/Investec Limited - Unaudite |
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INL INP INPR INPP
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INP/INL - Investec plc/Investec Limited - Unaudited combined consolidated
financial results in Pounds Sterling for the year ended 31 March 2011
Investec plc Investec Limited
(Registration number 3633621) (Registration number 1925/002833/06)
JSE Code: INP JSE Code: INL
ISIN: GB00B17BBQ50 ISIN: ZAE000081949
Investec plc and Investec Limited (combined results)
Unaudited combined consolidated financial results in Pounds Sterling
for the year ended 31 March 2011
Salient Features
31 March 31 March %
2011 2010 change
Operating profit before goodwill, 434 406 432 258 0.5
acquired intangibles, non-operating
items,taxation and after non-controlling
interests (GBP`000)
Earnings attributable to shareholders 420 516 346 133 21.5
(GBP`000)
Adjusted earnings before goodwill, 327 897 309 710 5.9
acquired intangibles and non-operating
items (GBP`000)
Adjusted earnings per share (pence) 43.2 45.1 (4.2)
Earnings per share (pence) 49.7 44.0 13.0
Headline earnings per share (pence) 37.7 40.1 (6.0)
Dividends per share (pence) 17.0 16.0 6.3
Total equity (GBP`million) 3 961 3 292 20.3
Third party assets under management 88 878 74 080 20.0
(GBP`million)
Combined consolidated income statement
Year to 31 March Unaudited Audited*
GBP`000 2011 2010
Interest income 2 238 783 2 041 153
Interest expense (1 557 314) (1 428 067)
Net interest income 681 469 613 086
Fee and commission income 896 300 612 574
Fee and commission expense (108 642) (67 497)
Principal transactions 418 686 457 759
Investment income on assurance activities 64 834 94 914
Premiums and reinsurance recoveries on 6 110 31 938
insurance contracts
Other operating income 54 003 34 332
Other income 1 331 291 1 164 020
Claims and reinsurance premiums on (57 774) (119 918)
insurance business
Total operating income net of insurance 1 954 986 1 657 188
claims
Impairment losses on loans and advances (318 230) (286 581)
Operating income 1 636 756 1 370 607
Operating costs (1 196 865) (957 151)
Depreciation on operating leased assets (16 447) -
Operating profit before goodwill and 423 444 413 456
amortisation of acquired intangibles
Impairment of goodwill (6 888) (3 526)
Amortisation of acquired intangibles (6 341) -
Operating profit 410 215 409 930
Profit arising from associate converted 73 465 -
to subsidiary
Net loss on sale of subsidiaries (17 302) -
Profit before taxation 466 378 409 930
Taxation on operating profit before (65 075) (82 599)
goodwill and acquired intangibles
Taxation on intangibles and sale of 6 610 -
subsidiaries
Profit after taxation 407 913 327 331
Operating losses attributable to non- 10 962 18 802
controlling interests
Loss on subsidiaries attributable to non- 1 641 -
controlling interests
Earnings attributable to shareholders 420 516 346 133
Earnings attributable to shareholders 420 516 346 133
Impairment of goodwill 6 888 3 526
Amortisation of acquired intangibles, net 3 509 -
of taxation
Loss on subsidiaries attributable to non- (1 641) -
controlling interests
Profit arising from associate converted (73 465) -
to subsidiary
Net loss on sale of subsidiaries, net of 13 524 -
taxation
Preference dividends paid (43 019) (43 860)
Additional earnings attributable to other 1 585 3 911
equity holders
Adjusted earnings before goodwill, 327 897 309 710
acquired intangibles and non-operating
items
Headline adjustments (gain on investment (41 238) (34 579)
properties and available for sale
instruments recognised in income)
Headline earnings 286 659 275 131
Earnings per share (pence)
- Basic 49.7 44.0
- Diluted 46.7 41.5
Adjusted earnings per share (pence)
- Basic 43.2 45.1
- Diluted 40.6 42.5
Headline earnings per share (pence)
- Basic 37.7 40.1
- Diluted 35.5 37.8
Number of weighted average shares
- basic (millions) 759.8 686.3
* As restated for reclassifications detailed in the commentary section of this
report.
Summarised combined consolidated statement of total comprehensive income
Year to 31 March Unaudited Audited
GBP`000 2011 2010
Profit after taxation 407 913 327 331
Other comprehensive income:
Cash flow hedge movements taken directly 9 929 14 202
to other comprehensive income+
Fair value movements on available for 27 631 20 370
sale assets taken directly to other
comprehensive income+
Gains on realisation of available for (4 845) (8 887)
sale assets recycled through the income
statement+
Foreign currency adjustments on 39 588 239 789
translating foreign operations
Pension fund actuarial gains/(losses) 10 157 (8 180)
Total comprehensive income 490 373 584 625
Total comprehensive income attributable (10 710) 9 918
to non-controlling interests
Total comprehensive income attributable 458 064 493 073
to ordinary shareholders
Total comprehensive income attributable 43 019 81 634
to perpetual preferred securities
Total comprehensive income 490 373 584 625
+Net of taxation of GBP5.7 million (2010: GBP10.0 million).
Summarised combined consolidated statement of changes in equity
Year to 31 March Unaudited Audited
GBP`000 2011 2010
Balance at beginning of the year 3 291 861 2 620 537
Total comprehensive income 490 373 584 625
Share based payment adjustments 69 518 56 942
Dividends paid to ordinary shareholders (123 630) (91 946)
Dividends paid to perpetual preference (43 019) (43 860)
shareholders
Dividends paid to non-controlling (356) (578)
interests
Issue of ordinary shares 325 886 84 178
Issue of perpetual preference shares 16 138 40 869
Share issue expenses (3 632) (3 559)
Movement of treasury shares (45 461) 40 974
Issue of equity instruments by 1 493 3 547
subsidiaries
Movement of non-controlling interests on (3 970) 132
disposals and acquisitions
Non-controlling interest relating to (14 099) -
disposal of subsidiaries
Balance at end of the year 3 961 102 3 291 861
Combined consolidated balance sheet
At 31 March Unaudited Audited*
GBP`000 2011 2010
Assets
Cash and balances at central banks 1 769 078 2 338 234
Loans and advances to banks 1 468 705 2 781 630
Cash equivalent advances to customers 535 983 581 117
Reverse repurchase agreements and cash 2 467 775 911 432
collateral on securities borrowed
Trading securities 5 114 322 4 221 645
Derivative financial instruments 1 799 204 1 591 841
Investment securities 3 328 609 1 996 073
Loans and advances to customers 18 758 524 17 414 691
Loans and advances to customers - 1 612 181 1 776 525
Kensington warehouse assets
Securitised assets 4 924 293 5 334 453
Interests in associated undertakings 23 481 104 059
Deferred taxation assets 114 838 134 355
Other assets 1 410 593 1 240 624
Property and equipment 279 801 161 255
Investment properties 379 527 273 038
Goodwill 456 608 274 417
Intangible assets 136 452 36 620
44 579 974 41 172 009
Other financial instruments at fair value
through profit or loss in respect of
- Liabilities to customers 6 361 296 5 397 014
- Assets related to reinsurance - 2 842
contracts
50 941 270 46 571 865
Liabilities
Deposits by banks 1 858 893 2 439 670
Deposits by banks - Kensington warehouse 975 542 1 213 042
funding
Derivative financial instruments 1 486 419 1 193 421
Other trading liabilities 716 556 504 618
Repurchase agreements and cash collateral 1 599 646 1 110 508
on securities lent
Customer accounts (deposits) 24 441 260 21 934 044
Debt securities in issue 2 145 213 2 187 040
Liabilities arising on securitisation 4 340 864 4 714 556
Current taxation liabilities 206 957 196 965
Deferred taxation liabilities 148 750 136 974
Other liabilities 1 411 137 1 177 589
Pension fund liabilities - 1 285
39 331 237 36 809 712
Liabilities to customers under investment 6 358 732 5 392 662
contracts
Insurance liabilities, including unit- 2 564 4 352
linked liabilities
Reinsured liabilities - 2 842
45 692 533 42 209 568
Subordinated liabilities 1 287 635 1 070 436
46 980 168 43 280 004
Equity
Ordinary share capital 208 195
Perpetual preference share capital 153 152
Share premium 2 242 067 1 928 296
Treasury shares (42 713) (66 439)
Other reserves 315 878 246 718
Retained income 1 131 980 846 060
Shareholders` equity excluding non- 3 647 573 2 954 982
controlling interests
Non-controlling interests 313 529 336 879
- Perpetual preferred securities issued 317 997 314 944
by subsidiaries
- Non-controlling interests in partially (4 468) 21 935
held subsidiaries
Total equity 3 961 102 3 291 861
Total liabilities and equity 50 941 270 46 571 865
*As restated for reclassifications detailed in the commentary section of this
report.
Summarised combined consolidated cash flow statement
Year to 31 March Unaudited Audited
GBP`000 2011 2010
Cash inflows from operations 779 885 731 000
Increase in operating assets (4 032 844) (3 336 695)
Increase in operating liabilities 2 752 392 4 115 640
Net cash (outflow)/inflow from operating (500 567) 1 509 945
activities
Net cash outflow from investing (292 272) (19 368)
activities
Net cash inflow/(outflow) from financing 156 748 (127 794)
activities
Effects of exchange rate changes on cash 101 032 274 915
and cash equivalents
Net (decrease)/increase in cash and cash (535 059) 1 637 698
equivalents
Cash and cash equivalents at the 3 922 047 2 284 349
beginning of the year
Cash and cash equivalents at the end of 3 386 988 3 922 047
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).
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, Johannesburg, 70 Marshall Street, Johannesburg,
2001 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
B Fried, P K O Crosthwaite, H J du Toit and O C Dickson were appointed to the
board of directors with effect from 1 April 2010, 18 June 2010, 15 December 2010
and 31 March 2011 respectively.
Sir Chips Keswick, A Tapnack and G M T Howe resigned from the board of directors
on 13 August 2010, 15 December 2010 and 31 December 2010 respectively.
Segmental geographic and business analysis of operating profit before goodwill,
acquired intangibles, non-operating items and taxation for the year ended 31
March 2011
United Kingdom
GBP`000 and Europe Southern Australia Total
Africa group
Asset Management 53 002 74 306 - 127 308
Wealth and 25 008 15 418 - 40 426
Investment
Property Activities 375 40 178 7 155 47 708
Private Banking (84 041) 2 990 (10 390) (91 441)
Investment Banking 8 887 65 191 (6 716) 67 362
Capital Markets 139 978 92 211 9 860 242 049
Group Services and (9 583) 9 780 797 994
Other Activities
Operating profit 133 626 300 074 706 434 406
after non-
controlling
interests
Non-controlling (10 962)
interest - equity
Operating profit 423 444
before goodwill and
acquired intangibles
Segmental geographic and business analysis of operating profit before goodwill,
acquired intangibles, non-operating items and taxation for the year ended 31
March 2010
United Kingdom
GBP`000 and Europe Southern Australia Total
Africa group
Asset Management 25 335 58 077 - 83 412
Wealth and 11 637 14 250 - 25 887
Investment
Property Activities 825 31 582 1 072 33 479
Private Banking 6 545 29 330 1 177 37 052
Investment Banking (4 399) 45 694 273 41 568
Capital Markets 93 163 70 572 15 404 179 139
Group Services and (9 407) 40 862 266 31 721
Other Activities
Operating profit 123 699 290 367 18 192 432 258
after non-
controlling
interests
Non-controlling (18 802)
interest - equity
Operating profit 413 456
before goodwill and
acquired intangibles
Commentary
Investec plc and Investec Limited (combined results)
Unaudited combined consolidated financial results in pounds sterling for the
year ended 31 March 2011
Overall group performance
The group has delivered a sound operational performance underpinned by a strong
recurring income base with five of its six core businesses recording increased
earnings. The group`s non-capital intensive asset management and wealth
management businesses reported a strong increase in their contribution to group
earnings as a result of the acquisition of Rensburg Sheppards plc and
significant net inflows. Whilst some of the group`s banking businesses have
performed well, notably Capital Markets, overall group results have been
constrained by lower levels of transactional activity and the slow recovery of
non-performing loans in the Private Bank. The balance sheet remains strong, with
an increase in capital and liquidity over the year.
Against this backdrop the main features of the year under review are:
- Operating profit before goodwill, acquired intangibles, non-operating items
and taxation and after non-controlling interests ("operating profit") increased
0.5% to GBP434.4 million (2010: GBP432.3 million).
- Impairments on loans and advances increased 11.0% to GBP318.2 million (2010:
GBP286.6 million).
- Adjusted earnings attributable to shareholders before goodwill, acquired
intangibles and non-operating items increased 5.9% to GBP327.9 million (2010:
GBP309.7 million).
- Adjusted earnings per share (EPS) before goodwill, acquired intangibles and
non-operating items decreased 4.2% from 45.1 pence to 43.2 pence, largely as a
result of an increase in the number of shares in issue.
- Third party assets under management increased 20.0% to GBP88.9 billion (2010:
GBP74.1 billion).
- Customer accounts (deposits) increased 11.4% to GBP24.4 billion (2010: GBP21.9
billion).
- Core loans and advances increased 4.8% to GBP18.8 billion (2010: GBP17.9
billion).
- Net asset value per share increased 14.3% to 416.0 pence and net tangible
asset value per share (which excludes goodwill and intangible assets) increased
by 6.1% to 343.8 pence.
- The board proposes a final dividend of 9.0 pence per ordinary share equating
to a full year dividend of 17.0 pence (2010: 16.0 pence) resulting in a dividend
cover based on the group`s adjusted EPS before goodwill and non-operating items
of 2.5 times (2010: 2.8 times), consistent with the group`s dividend policy.
Strategic review
The group has realigned 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
been successful, resulting in a substantial rise in funds under management and
an increase in operating profit from these businesses of 53.5% to GBP167.7
million (2010: GBP109.3 million). This has resulted in a change in the
proportion of the group`s earnings, with the asset management and wealth
management businesses now accounting for 38.6% of the group`s operating profit
during the last year, compared to 25.3% in 2010.
The banking environment remains fluid as regulators continue their review and
adjustment of the regulatory framework in an attempt to strengthen the system
and avoid future crises. The group has as a consequence continued to maintain
high levels of liquidity and capital as it adjusts to a system where higher
levels of liquidity and capital will become the norm.
Operational review
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 (2010: GBP9.1 billion).
Capital adequacy
The group targets 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 are strong in
Investec plc and Investec Limited, as reflected in the table below.
Basel II ratios 31 Mar 2011 31 Mar 2010
Investec plc
Capital adequacy ratio 16.8% 15.9%
Tier 1 ratio 11.6% 11.3%
Investec Limited
Capital adequacy ratio 15.9% 15.6%
Tier 1 ratio 11.9% 12.1%
The group has conducted a review of the proposed Basel III requirements and
believes that its current capital structure and capital ratios exceed the
minimum capital requirements for 2013.
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. Defaults on core loans and advances have increased but are fully
collateralised, as detailed in the "Financial statement analysis" below.
Investec continues to focus on improving the quality of its loan portfolio in
all geographies.
Business unit review
Asset Management
Asset Management increased operating profit 52.6% to GBP127.3 million (2010:
GBP83.4 million) benefiting from substantially higher funds under management and
a solid investment performance. The division recorded strong net inflows of
GBP7.4 billion contributing to an increase in assets under management of 26.7%
from GBP46.4 billion to GBP58.8 billion.
Wealth and Investment
Wealth and Investment increased operating profit 56.2% to GBP40.4 million (2010:
GBP25.9 million) benefiting from higher funds under management and the
acquisition of Rensburg Sheppards plc. Total funds under management increased by
8.5% from GBP27.1 billion to GBP29.4 billion.
Property Activities
Property Activities generated an increase in operating profit of 42.5% to
GBP47.7 million (2010: GBP33.5 million). The results of the division were
largely supported by a good performance from the investment property portfolio
in South Africa.
Private Banking
Private Banking posted a loss of GBP91.4 million (2010: profit of GBP37.1
million) as a result of low activity levels, increased impairments and write
offs. The private client core lending book increased by 3.1% from GBP12.9
billion to GBP13.3 billion and the deposit book increased by 5.9% from GBP11.8
billion to GBP12.5 billion.
Investment Banking
Investment Banking increased operating profit 62.1% to GBP67.4 million (2010:
GBP41.6 million). Principal Investments recorded a robust result, primarily
driven by an improved performance from certain investments held in the UK and
South African portfolio. The Agency divisions benefitted from a good deal
pipeline, however, trading conditions in the Institutional Stockbroking business
remain difficult.
Capital Markets
Capital Markets reported an increase in operating profit of 35.1% to GBP242.0
million (2010: GBP179.1 million). The division benefited from satisfactory
levels of activity across the advisory and structuring businesses, notably
within the Principal Finance, Structured Finance and Structured Equity Finance
teams. Core loans and advances increased 7.2% from GBP4.5 billion to GBP4.8
billion.
Group Services and Other Activities
Group Services and Other Activities posted a profit of GBP1.0 million (2010:
profit of GBP31.7 million). Central Funding`s results were impacted by lower
levels of interest rates and a weaker performance from equity investments held
within the South African portfolio. Central Services incurred an increase in
both personnel and marketing 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 18.0% to GBP1 955.0
million (2010: GBP1 657.2 million), with recurring income as a percentage of
total operating income amounting to 62.3% (2010: 60.3%).
Net interest income increased by 11.2% to GBP681.5 million (2010: GBP613.1
million) largely as a result of improved margins within the South African
Private Bank and a sound performance from the group`s fixed income portfolios.
Net fee and commission income increased by 44.5% to GBP787.7 million (2010:
GBP545.1 million). Funds under management have grown substantially, supported by
improved market indices and strong net inflows. The banking businesses recorded
an increase in net fees and commissions, although transactional activity levels
remain mixed.
Income from principal transactions decreased by 8.5% to GBP418.7 million (2010:
GBP457.8 million). The group has benefited from a solid performance from its
investment banking, fixed income and property investment portfolios. This was
offset by a weaker performance from some of the equity investments held within
the South African central funding portfolio.
Other operating income includes the operating results of certain investments
which were consolidated; associate income, and income earned on operating leases
acquired during the year.
Impairment losses on loans and advances
The uncertain pace of economic recovery has slowed the improvement in the level
of non-performing loans and defaults have continued to increase. Impairment
losses on loans and advances have increased from GBP205.4 million to GBP248.3
million (excluding Kensington). The credit loss charge as a percentage of
average gross loans and advances has increased from 1.16% to 1.27%. The group
expects this ratio to decrease during the forthcoming financial year. The
percentage of default loans (net of impairments but before taking collateral
into account) to core loans and advances has increased from 4.0% to 4.7%. The
ratio of collateral to default loans (net of impairments) remains satisfactory
at 1.36 times (2010: 1.33 times).
Impairment losses on loans and advances relating to the Kensington business
amount to GBP69.9 million (2010: GBP81.2 million). The Kensington book has
reduced from GBP4.7 billion to GBP4.2 billion.
Operating costs and depreciation
The ratio of total operating costs to total operating income amounts to 61.7%
(2010: 57.8%).
Total expenses grew by 26.8% to GBP1 213.3 million (2009: GBP957.2 million) as a
result of the appreciation of the Rand and Australian Dollar; the acquisitions
of Rensburg Sheppards plc, Masterlease UK and Lease Direct Finance Limited; an
increase in variable remuneration in certain divisions given improved
profitability; an increase in headcount in certain divisions; and increased
spending on brand development.
Impairment of goodwill
The current period goodwill impairment relates to Asset Management businesses
acquired in prior years.
Amortisation of acquired intangibles
The current period amortisation of acquired intangibles relates to the
acquisition of Rensburg Sheppards plc and mainly comprises amortisation of
amounts attributable to client relationships.
Profit arising from associate converted to a subsidiary
A net gain of GBP73.5 million has arisen on the acquisition of Rensburg
Sheppards plc, as detailed in the "Notes to the commentary" section below.
Net loss on sale of subsidiaries
The net loss on sale of subsidiaries of GBP17.3 million arose from a loss on
sale and deconsolidation of previously consolidated group investments, partially
offset by a gain on the sale of Rensburg Fund Management Limited.
Taxation
The operational effective tax rate (excluding taxation on intangibles and sale
of subsidiaries) of the group decreased from 20.6% to 15.5%, due to the
resolution of matters for which a provision was previously held.
Losses attributable to non-controlling interests
Losses attributable to non-controlling interests of GBP11.0 million largely
comprise:
- GBP9.2 million relating to investments consolidated in the Private Equity
division;
- GBP1.4 million relating to Euro denominated preferred securities issued by a
subsidiary of Investec plc which are reflected on the balance sheet as part of
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 2010:
- Total shareholders` equity (including non-controlling interests) increased by
20.3% to GBP4.0 billion largely as a result of retained earnings and the issue
of shares.
- Total assets increased from GBP46.6 billion to GBP50.9 billion largely as a
result of increased cash and near cash balances and advances, as well as an
increase in goodwill and intangibles associated with the acquisition of Rensburg
Sheppards plc.
- Core loans and advances (excluding own originated securitised assets) as a
percentage of customer deposits improved from 76.2% to 72.4%.
- The return on adjusted average shareholders` equity declined from 13.5% to
11.2%.
The group`s gearing ratios remain low with core loans and advances to equity at
4.7 times (2010: 5.4 times) and total assets (excluding assurance assets) to
equity at 11.3 times (2010:12.5 times).
Outlook
Over the past two years, we have re-positioned the group as a "specialist bank
and asset manager" and made substantial progress in realigning our business
model in response to the challenging and uncertain regulatory landscape. Whilst
our performance remains sensitive to the global economy, our current assessment
of the environment is for an improvement in impairments and growth in the
overall business for the year ahead.
On behalf of the boards of Investec plc and Investec Limited
Hugh Herman Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
18 May 2011
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 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 2010.
- 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 31 Mar 2011 Year to 31 Mar 2010
Currency per GBP1.00 Close Ave Close Ave
South African Rand 10.88 11.16 11.11 12.38
Australian Dollar 1.55 1.65 1.66 1.88
Euro 1.13 1.17 1.12 1.13
Dollar 1.60 1.55 1.52 1.59
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 9.9% and the
closing rate has appreciated by 2.1% since 31 March 2010.
- Acquisition of Rensburg Sheppards plc
On 30 March 2010, it was announced that Investec and Rensburg Sheppards plc had
reached agreement on the terms of a recommended all share offer under which
Investec would acquire the entire issued and to be issued ordinary share capital
of Rensburg Sheppards plc not already owned by it. Following shareholder and
regulatory approvals the acquisition became effective on 25 June 2010. Prior to
this date Investec`s 47.1% interest in Rensburg Sheppards plc was accounted for
as an associate. As a result of requirements under new accounting rules, the
group was required to fair value its existing 47.1% holding in Rensburg
Sheppard`s plc at the point it acquired the remaining 52.9%. This has resulted
in an exceptional gain of GBP73.5 million (net of acquisition costs). The group
issued 37.9 million shares to acquire the remaining shares in Rensburg Sheppards
plc for a consideration of GBP180.4 million. This consideration combined with
the existing fair valued holding resulted in the recognition of goodwill and
intangibles of GBP198.5 million and GBP133.4 million, respectively.
- Accounting policies and disclosures
The accounting policies applied in the preparation of the results for the year
ended 31 March 2011 are consistent with those adopted in the financial
statements for the year ended 31 March 2010, except for the adoption of the
revised IFRS 3 - Business Combinations. This standard is applicable to all
business combinations effective from 1 April 2010 in the group accounts. The
main change arising from the adoption is that acquisition related costs are
expensed in the period in which the costs are incurred and the services
rendered, except for costs related to the issue of debt (recognised as part of
the effective interest rate) and the cost of issue of equity (recognised
directly in shareholders` equity).
These unaudited condensed summarised combined 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 IAS 34, Interim Financial Reporting.
- Restatements and presentation of information
Offsetting of intergroup interest received and interest paid
On review, it was detected that the gross interest income and expense, as
reported at 31 March 2010, had not appropriately netted certain intergroup
interest income and expense between the two line items. Whilst net interest
income was correctly reported, the restatement to interest received and paid is
noted below:
GBP`000 31 March 2010
Restated
Interest income 2 041 153
Interest expense (1 428 067)
Net interest income 613 086
As previously reported
Interest income 2 726 011
Interest expense (2 112 925)
Net interest income 613 086
Changes to previously reported
Interest income (684 858)
Interest expense 684 858
Net interest income -
The above change has no impact to the income statement (other than as noted
above), balance sheet nor cash flow statement.
Redeemable preference shares
The group had previously included cumulative redeemable preference shares as a
component of other liabilities. The presentation has been amended to include the
cumulative redeemable preference shares as a component of debt securities in
issue.
GBP`000 31 March 2010 31 March 2009
Restated
Debt securities in issue 2 187 040 1 275 615
Other liabilities 1 177 589 1 003 400
As previously reported
Debt securities in issue 1 791 869 1 014 871
Other liabilities 1 572 760 1 264 144
Changes to previously reported
Debt securities in issue 395 171 260 744
Other liabilities (395 171) (260 744)
- 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
18 May 2011.
- The information in the announcement for the year ended 31 March 2011, which
was approved by the board of directors on 18 May 2011, does not constitute
statutory accounts as defined in Section 435 of the UK Companies Act 2006.
Investec plc
Ordinary share 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 final dividend number 18 of 9 pence (2010: 8 pence)
per ordinary share has been recommended by the board in respect of the financial
year ended 31 March 2011 payable to shareholders recorded in the members`
register of the company at the close of business on Friday, 29 July 2011, which
will be paid as follows:
- for non-South African resident Investec plc shareholders, through a dividend
payment by Investec plc of 9 pence per ordinary share
- for South African resident shareholders of Investec plc, through a dividend
payment by Investec plc of 1 pence per ordinary share and through a dividend
paid, on the SA DAS share equivalent to 8 pence per ordinary share
The relevant dates for the payment of dividend number 18 are as follows:
Last day to trade cum-dividend
On the London Stock Exchange (LSE) Tuesday, 26 July 2011
On the Johannesburg Stock Exchange (JSE) Friday, 22 July 2011
Shares commence trading ex-dividend
On the London Stock Exchange (LSE) Wednesday, 27 July 2011
On the Johannesburg Stock Exchange (JSE) Monday, 25 July 2011
Record date (on the JSE and LSE) Friday, 29 July 2011
Payment date (on the JSE and LSE) Monday, 08 August 2011
Share certificates on the South African branch register may not be
dematerialised or rematerialised between Monday, 25 July 2011 and Friday, 29
July 2011, both dates inclusive, nor may transfers between the UK and SA
registers take place between Monday, 25 July 2011 and Friday, 29 July 2011, both
dates inclusive.
Shareholders registered on the South African register are advised that the
distribution of 9 pence, equivalent to 102 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 May 2011.
By order of the board
D Miller
Company Secretary 18 May 2011
Investec Limited
Ordinary share dividend announcement
Registration number: 1925/002833/06
Share code: INL
ISIN: ZAE000081949
Notice is hereby given that a final dividend number 111 of 102 cents (2010: 89
cents) per ordinary share has been recommended by the board in respect of the
financial year ended 31 March 2011 payable to shareholders recorded in the
members` register of the company at the close of business on Friday, 29 July
2011.
The relevant dates for the payment of the dividend number 111 are as follows:
Last day to trade cum-dividend Friday, 22 July 2011
Shares commence trading ex-dividend Monday, 25 July 2011
Record date Friday, 29 July 2011
Payment date Monday, 08 August 2011
The final dividend of 102 cents per ordinary share has been determined by
converting the Investec plc distribution of 9 pence per ordinary share into
Rands using the Rand/Pounds Sterling average buy/sell forward rate at 11h00 (SA
time) on Wednesday, 18 May 2011.
Share certificates may not be dematerialised or rematerialised between Monday,
25 July 2011 and Friday, 29 July 2011, both dates inclusive.
By order of the board
B Coetsee
Company Secretary 18 May 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 10
Notice is hereby given that preference dividend number 10 has been declared for
the period 01 October 2010 to 31 March 2011 amounting to 7.48 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, 17 June 2011.
For shares trading on the Johannesburg Stock Exchange (JSE), the dividend of
7.48 pence per share is equivalent to 84 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 May 2011.
The relevant dates relating to the payment of dividend number 10 are as follows:
Last day to trade cum-dividend
On the Channel Islands Stock Exchange (CISX) Tuesday, 14 June 2011
On the Johannesburg Stock Exchange (JSE) Thursday, 09 June 2011
Shares commence trading ex-dividend
On the Channel Islands Stock Exchange (CISX) Wednesday, 15 June 2011
On the Johannesburg Stock Exchange (JSE) Friday, 10 June 2011
Record date (on the JSE and CISX) Friday, 17 June 2011
Payment date (on the JSE and CISX) Thursday, 30 June 2011
Share certificates may not be dematerialised or rematerialised between Friday,
10 June 2011 and Friday, 17 June 2011, both dates inclusive, nor may transfers
between the UK and SA registers may take place between Friday, 10 June 2011 and
Friday, 17 June 2011, both dates inclusive.
By order of the board
D Miller
Company Secretary 18 May 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 13
Notice is hereby given that preference dividend number 13 has been declared for
the period 01 October 2010 to 31 March 2011 amounting to 318.84 cents per share
payable to holders of the no
