| Thu 18 May 2006, 11:30 | | Investec plc / Investec Limited - Unaudited IFRS c |
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INL INP
INL INP
Investec plc / Investec Limited - Unaudited IFRS consolidated financial
results in Pounds Sterling for the year ended 31 March 2006
Investec plc
(Incorporated in the United Kingdom)
(Registration number 3633621)
Share code: INP & ISIN: GB0031773103
Investec Limited
(Incorporated in the Republic of South Africa)
(Registration number 1925/002833/06)
Share code: INL & ISIN code: ZAE000040531
("Investec")
Investec plc and Investec Limited (combined results)
Unaudited IFRS consolidated financial results in Pounds Sterling
for the year ended 31 March 2006
Salient Features
Pro forma
31 March 31 March %
2006 2005* Change
Adjusted earnings before 230,017 149,510 53.8%
goodwill impairment and non-
operating items (GBP"000)
Operating profit before goodwill 388,767 224,124 73.5%
impairment, non-operating items
and taxation (GBP"000)
Earnings attributable to 315,101 110,888 184.2%
shareholders (GBP"000)
Adjusted earnings per share 209.5 134.6 55.6%
(before goodwill impairment and
non-operating items) (pence)
Earnings per share (pence) 268.9 89.2 201.5%
Headline earnings per share 203.0 132.4 53.3%
(pence)
Dividends per share (pence) 91.0 67.0 35.8%
Dividends per share (cents) 1,073.0 772.0 39.0%
Combined consolidated income statements
Pro forma
IFRS restated IFRS restated
Year to year to year to
31 March 31 March 31 March
GBP"000 2006 2005* 2005
Interest receivable 934,389 758,513 734,765
Interest payable (675,237) (587,945) (587,945)
Net interest income 259,152 170,568 146,820
Fees and commissions 478,465 403,543 439,958
receivable
Fees and commissions (41,591) (25,818) (25,818)
payable
Principal transactions 246,059 140,158 135,358
Operating income from 6,694 14,474 14,474
associates
Investment income on 141,559 258,855 258,855
assurance activities
Premiums and reinsurance 164,631 246,537 246,537
recoveries on insurance
contracts
Other operating income 2,721 6,120 6,120
Other income 998,538 1,043,869 1,075,484
Claims and reinsurance (293,135) (478,894) (478,894)
premiums on insurance
business
Total operating income net 964,555 735,543 743,410
of insurance claims
Impairment losses on loans (9,160) (15,845) (27,796)
and advances
Net operating income 955,395 719,698 715,614
Administrative expenses (558,887) (485,444) (485,444)
Depreciation and impairment (7,741) (10,130) (10,130)
of property and equipment
Operating profit before 388,767 224,124 220,040
goodwill impairment
Impairment of goodwill (21,356) (37,010) (37,010)
Operating profit 367,411 187,114 183,030
Profit/(loss) on 73,573 (14,629) (14,629)
termination or disposal of
group operations
Profit before taxation 440,984 172,485 168,401
Taxation (111,616) (59,226) (60,463)
Profit after taxation 329,368 113,259 107,938
Earnings attributable to 14,267 2,371 2,371
minority interests
Earnings attributable to 315,101 110,888 105,567
shareholders
Earnings attributable to 329,368 113,259 107,938
shareholders" equity
Earnings attributable to 315,101 110,888 105,567
shareholders
Impairment of goodwill 21,356 37,010 37,010
(Profit)/loss on (73,573) 14,629 14,629
termination or disposal of
group operations
Preference dividends paid (19,940) (11,742) (11,742)
Additional earnings (12,927) (1,275) (1,275)
attributable to other
equity holders
Earnings before goodwill 230,017 149,510 144,189
impairment and non-
operating items
Adjustments to derive (7,212) (2,473) (2,473)
headline earnings
Headline earnings 222,805 147,037 141,716
Earnings per share (pence)
- basic 268.9 89.2 84.5
- diluted 249.8 85.4 81.0
Adjusted earnings per share
(pence)
- basic 209.5 134.6 129.8
- diluted 195.2 127.5 123.1
Dividends per share (pence)
- interim 38.0 30.0 30.0
- final 53.0 37.0 37.0
Headline earnings per share 203.0 132.4 127.6
(pence)
Number of weighted average
shares
- basic (million) 109.8 111.1 111.1
Combined consolidated cash flow statements
Year to Year to
31 March 31 March
GBP"000 2006 2005
Cash inflow from operations 369,197 234,204
Increase in operating assets (2,939,470) (3,228,141)
Increase in operating liabilities 2,739,262 2,909,285
Net cash inflow/(outflow) from 168,989 (84,652)
operating activities
Net cash outflow from investing (473,159) (183,269)
activities
Net cash inflow from financing 38,076 129,478
activities
Effects of exchange rate changes on 73,721 5,899
cash and cash equivalents
Net decrease in cash and cash (192,373) (132,544)
equivalents
Cash and cash equivalents at the 1,382,556 1,515,100
beginning of the year
Cash and cash equivalents at the end 1,190,183 1,382,556
of the year
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 consolidated balance sheets at
31 March 1 April 31 March
GBP"000 2006 2005* 2005
Assets
Cash and balances at central 190,838 105,130 105,130
banks
Treasury bills and other eligible 323,622
bills
Loans and advances to banks 1,830,603 1,563,066 3,017,326
Cash equivalent advances to 690,236 710,721
customers
Reverse repurchase agreements and
cash
collateral on securities borrowed 756,645 2,318,745
Trading securities 1,640,088 1,279,111
Derivative financial instruments 1,081,287 929,783
Investment securities 1,266,673 1,188,405
Loans and advances to customers 9,604,589 6,408,368 7,402,460
Debt securities 2,001,682
Equity shares 531,262
Interests in associated 63,099 13,219 13,219
undertakings
Deferred taxation assets 60,035 52,686 49,023
Other assets 1,272,787 885,577 1,346,017
Property and equipment 26,916 28,729 28,729
Investment properties 163,049 202,352 202,352
Goodwill 183,560 199,313 199,313
Intangible assets 10,094 7,373 7,373
18,840,499 15,892,578 15,227,508
Financial instruments at fair
value through income in respect
of
- liabilities to customers 3,628,574 2,815,137
- assets related to reinsurance 1,431,876 1,209,165
contracts
Long-term assurance assets
attributable to
policyholders 2,815,137
23,900,949 19,916,880 18,042,645
Liabilities
Deposits by banks 1,879,483 780,829 912,526
Derivative financial instruments 705,764 838,578
Other trading liabilities 457,254 1,892,732
Repurchase agreements and cash
collateral on
securities lent 358,278 508,301
Customer accounts 8,699,165 6,458,714 6,805,429
Debt securities in issue 2,950,103 1,926,889 1,925,124
Current taxation liabilities 137,426 72,834 72,834
Deferred taxation liabilities 26,210 20,784 7,445
Other liabilities 1,582,856 1,809,207 3,700,989
Accruals and deferred income 226,763
Pension fund liabilities 2,013 10,991 10,991
16,798,552 14,319,859 13,662,101
Liabilities to customers under 2,694,539 2,664,434
investment contracts
Insurance liabilities, including 934,035 145,136
unit-linked liabilities
Reinsured liabilities 1,431,876 1,209,165
Long-term assurance liabilities
attributable to
policyholders 2,815,137
21,859,002 18,338,594 16,477,238
Subordinated liabilities 529,854 502,675 499,995
(including convertible debt)
22,388,856 18,841,269 16,977,233
Equity
Called up share capital 165 165 165
Share premium 1,028,737 1,029,242 1,029,242
Treasury shares (96,300) (109,362) (99,873)
Shares to be issued 2,191
Equity portion of convertible 2,191 2,191
instruments
Perpetual preference shares 215,305 196,742 323,800
Other reserves 156,103 78,054 39,617
Profit and loss account (79,709) (266,530) (248,975)
Shareholders" equity excluding 1,226,492 930,502 1,046,167
minority interests
Minority interests 285,601 145,109 19,245
- Perpetual preferred securities 278,459 127,058
issued by subsidiaries
- Other 7,142 18,051
Total equity 1,512,093 1,075,611 1,065,412
Total liabilities and 23,900,949 19,916,880 18,042,645
shareholders" equity
* As detailed in the commentary, a pro forma income statement has been
produced to enhance comparability.
A geographical breakdown of business operating profit before goodwill
impairment and non-operating items - for the year to 31 March 2006
United
Kingdom
Southern and Other Total
GBP"000 Africa Europe Australia geographies group
Private 31,981 61,533 8,009 - 101,523
Banking
Private 9,243 7,399 - - 16,642
Client
Portfolio
Management
and
Stockbroking
Treasury and 43,560 22,507 849 - 66,916
Specialised
Finance
Activities
Investment 65,887 29,631 5,412 - 100,930
Banking
Asset 48,767 10,609 - - 59,376
Management
Property 16,575 2,023 - - 18,598
Activities
Group 49,397 (25,966) 1,473 (122) 24,782
Services and
Other
265,410 107,736 15,743 (122) 388,767
A geographical breakdown of business operating profit before goodwill
impairment and non-operating items - pro forma for the year to 31 March 2005
United
Kingdom
Southern and Other Total
GBP"000 Africa Europe Australia geographies group
Private 24,815 35,282 4,341 2,052 66,490
Banking
Private 5,396 8,408 - - 13,804
Client
Portfolio
Management
and
Stockbroking
Treasury and 31,335 14,051 1,193 (210) 46,369
Specialised
Finance
Activities
Investment 26,975 16,632 3,514 2,165 49,286
Banking
Asset 31,259 4,859 - 185 36,303
Management
Property 13,095 5,113 - - 18,208
Activities
Group 17,055 (24,267) 1,909 (1,033) (6,336)
Services and
Other
149,930 60,078 10,957 3,159 224,124
Summarised combined consolidated statements of changes in equity
Year Year
to to
31 March 31 March
GBP"000 2006 2005
Balance at the beginning of the year 1,065,412 869,123
As previously reported 967,256 766,373
Changes in accounting policies arising from
adoption of IFRS
- Minority interests included within 13,195 39,029
reconciliation of reserves
- IFRS 2 - share based payments 554 (272)
- IFRS 3 - business combinations 10,943 -
- IAS 10 - events after balance sheet date 49,593 38,474
- IAS 12 - income taxes 7,298 81
- IAS 17 - leases (6,933) (594)
- IAS 19 - employee benefits (140) (140)
- IAS 27/28/31 - consolidations, associates 23,646 26,172
and joint ventures
- IAS 32 & 39 - financial instruments 10,199 -
(adopted from 1 April 2005)**
Foreign currency adjustments 52,564 (15,263)
Retained profit for the year attributable 315,101 105,567
to ordinary shareholders
Retained profit for the year attributable 14,267 2,371
to minority interests
Share based payments adjustments 19,221 8,849
Fair value movements on available for sale 8,480 -
assets
Dividends paid to ordinary shareholders (84,435) (55,398)
Dividends paid to minority shareholders (19,940) (11,738)
Issue of perpetual preference shares - 207,313
Share issue expenses (556) (838)
Re-issue of treasury shares 13,113 2,146
Purchase of treasury shares - (16,159)
Transfer from pension fund deficit 2,035 2,370
Issue of equity instruments of subsidiaries 132,520 -
Movement on minorities on disposals and (15,888) (32,931)
acquisitions
Balance at the end of the year 1,512,093 1,065,412
** Per the Transition to IFRS Report (issued on 21 September 2005) the
adjustment on adoption of IAS 32 and IAS 39 increased reserves by GBP17.6
million. This increase has been adjusted downward by GBP7.4 million (after
taxation effects) to GBP10.2 million as a result of interpretation resulting
in model enhancements relating to the recognition of certain fee income as a
component of the effective yield of lending transactions and improvement to
certain fair value models adopted by the group. These adjustments are
isolated to Private Banking and Treasury and Specialised Finance Activities.
Similarly, adjusted EPS for the year ended 31 March 2005 has been revised
downward to 134.6 pence.
Investec plc and Investec Limited
Combined financial results for the year ended 31 March 2006 prepared using
International Financial Reporting Standards and expressed in Pounds Sterling.
Overall performance
We are pleased to announce that for the year ended 31 March 2006, adjusted
earnings per share (EPS) before goodwill impairment and non-operating items
increased by 55.6% to 209.5 pence from 134.6 pence.
This strong performance is a reflection of the initiatives we have taken over
the past few years in the pursuit of a sustainable, distinctive growth
strategy. This has been supported by increased investment in brand
recognition while we have built our scale, expertise and capabilities. This
has enabled us to take advantage of favourable market conditions with most of
our businesses delivering strong performance. We have achieved all our stated
growth and financial return objectives.
The salient features of the year under review are:
Operating profit before goodwill impairment, non-operating items and taxation
increased 73.5% from GBP224.1 million to GBP388.8 million.
Earnings attributable to ordinary shareholders before goodwill impairment and
non-operating items increased 53.8% from GBP149.5 million to GBP230.0
million.
Return on adjusted shareholders" equity (inclusive of compulsorily
convertible instruments) increased from 20.0% to 25.5% against a target of
greater than 20%.
The ratio of total operating expenses to total operating income improved from
67.4% to 58.7% against a target of below 65%.
Loans and advances to customers increased 49.9% from GBP6.4 billion to GBP9.6
billion. Asset quality remains satisfactory with the percentage of gross non-
performing loans to loans and advances improving from 0.88% to 0.75%.
Third party assets under management increased 60.8% from GBP33.9 billion to
GBP54.4 billion, supported by favourable markets and the corporate
transactions undertaken (mentioned below).
The board proposes an increased final dividend of 53 pence per ordinary share
equating to a full year dividend of 91 pence (2005: 67.0 pence) resulting in
a dividend cover based on the group"s adjusted EPS before impairment of
goodwill and non-operating items of 2.3 times (2005: 2.0 times), consistent
with our dividend policy.
Business unit review
Unless the context indicates otherwise, reference to "operating profit" in
the business unit review below, refers to profit before goodwill impairment,
non-operating items and taxation.
Private Client Activities
Our Private Client Activities, comprising the Private Banking and Private
Client Portfolio Management and Stockbroking divisions, reported strong
growth in operating profit of 47.2% to GBP118.1 million (2005: GBP80.3
million).
Private Banking
Operating profit of our Private Banking division increased by 52.7% to
GBP101.5 million (2005: GBP66.5 million) driven by solid growth in total
advances and strong performances recorded across the division"s areas of
specialisation. The private client lending book has grown by 43.2% to GBP6.2
billion (2005: GBP4.3 billion) and the division increased its retail deposit
book by 46.3% to GBP4.8 billion (2005: GBP3.3 billion).
Private Client Portfolio Management and Stockbroking
Private Client Portfolio Management and Stockbroking recorded strong growth,
generating operating profit of GBP16.6 million (2005: GBP13.8 million), an
increase of 20.6%. The Private Client business in South Africa benefited from
positive equity market conditions and the acquisition of HSBC"s Private
Client business in South Africa. Total funds under management increased
significantly to GBP7.8 billion (2005: GBP3.6 billion). The 2006 results of
the UK operations include our 47.7% associate shareholding in Rensburg
Sheppards plc post tax profit.
Treasury and Specialised Finance
Treasury and Specialised Finance posted strong growth in operating profit of
44.3% to GBP66.9 million (2005: GBP46.4 million). Growth was underpinned by a
solid performance from the division"s advisory, structuring, asset creation
and distribution activities, with advances increasing by 50.8% to GBP3.0
billion (2005: GBP2.0 billion).
Investment Banking
Our Investment Banking division recorded a significant increase in operating
profit from GBP49.3 million to GBP100.9 million. Institutional Stockbroking
performed well against a backdrop of buoyant equity markets and Corporate
Finance benefited from a strong deal pipeline across all geographies. Our
Direct Investments and Private Equity divisions continued to perform solidly
across the board reflecting our increasing presence in this activity.
Asset Management
Asset Management delivered substantial growth in operating profit of 63.6% to
GBP59.4 million (2005: GBP36.3 million). The division"s performance was
boosted by favourable market conditions, growth in performance fee revenue
and excellent mutual fund sales. Assets under management have increased by
38.1% to GBP31.7 billion (2005: GBP22.9 billion) with net inflows amounting
to GBP443 million. The division has established a durable platform for growth
on the back of competitive long term investment performance, management
continuity and growing brand recognition in its markets.
Property Activities
Operating profit of our Property Activities division of GBP18.6 million was
marginally ahead of that of the prior year (2005: GBP18.2 million). The
division in South Africa posted solid results driven by an increase in funds
under management and principal transactions given the favourable property
market conditions. These results were offset by a weaker performance from the
UK business which had benefited from several exit fees earned in the prior
year.
Group Services and Other Activities
Group Services and Other Activities earned an operating profit of GBP24.8
million compared to the prior year loss of GBP6.3 million. Our Central
Funding division benefited from a solid performance of its portfolio of
assets and increased cash holdings arising out of the number of corporate
actions undertaken as highlighted below. These results were partially offset
by higher Central Services costs largely as a result of increased incentive
based remuneration.
Financial statements analysis
Operating income
Operating income increased by 31.1% to GBP964.6 million (2005: GBP735.5
million). The movements in total operating income are analysed below.
Net interest income increased by 51.9% to GBP259.2 million (2005: GBP170.6
million) as a result of very strong growth in loans and advances of 49.9% to
GBP9.6 billion and increased cash holdings within the Central Funding
division.
The growth in net fees and commissions of 15.7% to GBP436.9 million (2005:
GBP377.7 million) is impacted by the sale of Carr Sheppards Crosthwaite Ltd
to Rensburg plc. Our retained interest in Rensburg Sheppards plc is now
accounted for as "operating income from associates". Excluding the
consolidated income earned from Carr Sheppards Crosthwaite Ltd in both years
results in an increase in net fees and commissions of 30.3% to GBP433.3
million. This result was supported by favourable market and economic
conditions and increased transactional activity in our businesses.
Income from principal transactions increased 75.6% to GBP246.1 million (2005:
GBP140.2 million) mainly as a result of a strong performance of the
underlying assets within the Direct Investments, Private Equity, Property and
Central Funding portfolios; an improved performance from our market making
and financial markets activities; and an increased contribution from the
Growth and Acquisition Finance team within the Private Bank.
Operating income from associates decreased by 53.8% to GBP6.7 million (2005:
GBP14.5 million). The current years figure includes Investec"s 47.7% share of
the reported post tax profit of Rensburg Sheppards plc for the period 6 May
2005 to 31 March 2006 (tax amounted to GBP3.6 million). In the prior year our
most significant associate investment was Capital Alliance Holdings Limited.
The decline in net income from assurance activities is as a result of the
reinsurance of the group risk business during the prior year. A post tax
profit of GBP1.0 million (2005: GBP6.7 million) was generated from assurance
activities, which represents the residual earnings from the businesses that
were retained.
Impairment losses on loans and advances
The decrease in impairment losses on loans and advances of 42.2% to GBP9.2
million (2005: GBP15.8 million) reflects an improvement in impairments in the
Private Banking and Central Funding divisions, partially offset by an
increase in specific impairments in the Treasury and Specialised Finance
division.
The percentage of gross non-performing loans (NPLs) to loans and advances
improved from 0.88% to 0.75%. Total impairment coverage remains highly
satisfactory both as a percentage of gross NPLs and net NPLs (gross NPLs net
of security), at 56.9% and 146.4% respectively.
Administrative expenses
Total administrative expenses increased by 15.1% to GBP558.9 million (2005:
GBP485.4 million), and by 28.0% to GBP556.0 million if the costs of Carr
Sheppards Crosthwaite Ltd and the Israeli operations are excluded in both
years. Variable remuneration increased by 64.9% to GBP156.3 million due to
increased profitability. Other operating expenses (excluding variable
remuneration) increased by 17.7% to GBP399.7 million largely as a result of
an increase in headcount in certain of the businesses in line with our growth
initiatives and the introduction of a long-term incentive plan (charge of
GBP11.5 million) for a group of senior employees in June 2005.
We achieved our target of operating expenses to total operating income of
less than 65% with the ratio improving from 67.4% to 58.7%, principally as a
result of the strong growth in operating income of 31.1%.
Goodwill impairment
The charge for goodwill impairment decreased from GBP37.0 million to GBP21.4
million. The current charge largely relates to impairment of goodwill
attributable to property management contracts with respect to a portfolio of
properties sold, and the Institutional Asset Management business in South
Africa (relating to the loss of assets resulting from corporate actions). The
prior year included an amount of GBP5 million relating to negative goodwill
arising from a structured finance transaction offset by goodwill impairments
largely relating to acquisitions made in South Africa and in the United
Kingdom.
Non-operating items
Non-operating items of GBP73.6 million principally includes a profit of
GBP79.5 million arising out of the effective 52.3% sale of Carr Sheppards
Crosthwaite Ltd to Rensburg plc offset by Investec"s GBP3 million share of
integration costs relating to the transaction.
Taxation
The operational effective tax rate of the group increased from 28.2% to
29.2%, and from 25.9 % to 26.5% if the impact of the gross up on assurance
activities is excluded in both years.
Earnings attributable to minority interests
Earnings attributable to minority interests increased from GBP2.4 million to
GBP14.3 million largely as a result of:
- An increase in the value of a portfolio of investment properties in
which minorities have an approximate 23.1% holding.
- A loss arising on the translation of the preferred securities issued by
a subsidiary of Investec plc from Euros into Pounds Sterling. In accordance
with IFRS these preferred securities are reflected on the balance sheet as
part of minority interests. The transaction is hedged and income arising on
the hedge is reflected in operating profit before goodwill impairment.
Capital resources
Since 1 April 2005 total capital resources (including total equity and
subordinated liabilities) increased by 29.3% to GBP2.0 billion largely as a
result of the issue of euro 200 million (GBP132 million) preferred securities
by a subsidiary of Investec plc in June 2005, the gain on the sale of Carr
Sheppards Crosthwaite Ltd and increased operating earnings.
The annualised return on adjusted shareholders" equity (inclusive of
compulsorily convertible instruments) increased from 20.0% to 25.5%,
exceeding our target of greater than 20%.
Investec plc and Investec Limited have capital adequacy ratios exceeding the
minimum regulatory requirements. The capital adequacy of Investec plc
(applying UK Financial Services Authority rules to its capital base) is 17.7%
(1 April 2005: 16.1%). The capital adequacy of Investec Limited (applying
South African Reserve Bank rules to its capital base) is 16.3% (1 April 2005:
17.9%).
Total assets and third party assets under management
Third party assets under management have increased by 60.8% from GBP33.9
billion to GBP54.4 billion as a result of the corporate actions mentioned
below and sound growth across all ranges of funds. On balance sheet assets
grew by 20.0% from GBP19.9 billion to GBP23.9 billion with strong growth in
loans and advances to customers partially offset by the closure of the Stock
Lending matched book in the UK (reflected in the balance sheet as reverse
repurchase agreements and cash collateral on securities borrowed).
Outlook
We continue to make significant strides in enhancing the quality and
sustainability of our earnings. While the levels of activity and momentum
have continued into the new financial year, we remain mindful of the volatile
operating environment to which some of our businesses are exposed.
We look forward to the future with the firm belief that our niche focus,
distinctive offering and capability at our people will enable us to take
advantage of growth opportunities as they arise.
On behalf of the boards of Investec plc and Investec Limited
Hugh Herman Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
Intent to subdivide Investec plc and Investec Limited ordinary shares
Investec shareholders are advised that the board of directors of Investec plc
and Investec Limited intend to ask shareholders to approve resolutions at the
Annual General Meeting which will result in the subdivision of Investec plc
and Investec Limited ordinary shares. A further announcement will be made in
due course.
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.
Our reporting currency is Pounds Sterling. Other foreign currency denominated
values included in this announcement have been translated into Pounds
Sterling, in the case of the income statement at the weighted average rate
for the relevant financial year, and in the case of the balance sheets at the
relevant closing rate. The following table sets out the movements in certain
relevant exchange rates against Pounds Sterling over the financial year:
31 March 2006 31 March 2005
Currency per GBP1.00 Year end Average Year end Average
South African Rand 10.72 11.43 11.73 11.47
Australian Dollar 2.44 2.37 2.44 2.50
Euro 1.43 1.47 1.46 1.47
US Dollar 1.74 1.78 1.89 1.85
Unless the context indicates otherwise, all comparatives included in the
commentary above relate to the pro forma results (as explained in the
"Accounting policies and disclosures" section below) for the year ended 31
March 2005.
- Significant corporate actions
A number of significant corporate actions have been undertaken during the
year under review and the previous financial year which have a bearing on our
performance and these are highlighted below.
- A subsidiary of Investec plc issued euro 200 million non-voting, non-
cumulative, perpetual preferred securities in June 2005.
- The sale of our UK Private Client Stockbroking business, Carr Sheppards
Crosthwaite Ltd, to Rensburg plc on 6 May 2005. We retain a 47.7% interest in
the combined entity, Rensburg Sheppards plc.
- The acquisition of HSBC"s private client business in South Africa effective
1 April 2005.
- The sale of our associate investment in Capital Alliance Holdings Limited
(CAL), to Liberty Group Limited effective on 31 March 2005.
- Investec Limited issued R2.3 billion (GBP207.3 million) of non-redeemable,
non-cumulative, non-participating preference shares in February 2005.
- The reinsurance of the group risk business conducted by Investec Employee
Benefits to CAL executed on 31 December 2004.
- The sale of our 80.28% stake in Investec Bank (Israel) Limited to The First
International Bank of Israel Ltd on 22 December 2004.
Accounting policies and disclosures
Transition to International Financial Reporting Standards
From 1 April 2005 we were required to prepare our consolidated results
(comprising the results of Investec plc and Investec Limited) in accordance
with IFRS. Previously these were prepared in accordance with UK Generally
Accepted Accounting Practice (UK GAAP). The financial statements for the year
ended 31 March 2006 represent the first full year IFRS compliant financial
statements prepared by us.
Our transition to IFRS has been performed in accordance with IFRS 1 "First-
Time Adoption of International Reporting Standards" and other relevant
standards applicable at 31 March 2006.
The following dates are applicable for the transition to IFRS:
- 1 April 2004 - date of transition to IFRS, being the start of the earliest
period of comparative information.
- 31 March 2005 - twelve month comparative period to 31 March 2006.
In accordance with the provisions of IFRS 1, we have elected not to apply the
requirements of IAS 32, "Financial Instruments: Disclosure and Recognition",
IAS 39, "Financial Instruments: Recognition and Measurement" and IFRS 4,
"Insurance Contracts" to the comparative period. The impact of adoption of
these standards is reflected as an adjustment to the opening balance sheet at
1 April 2005. To facilitate comparability, a pro-forma income statement is
presented which incorporates the impact of the adoption of IAS 32 and IAS 39
in the following respects:
- recognising certain fees on an effective yield basis,
- the release of general provisions on loans and advances and
- fair value adjustments for embedded derivatives.
IFRS 4 only effects the presentation of the balance sheet.
On 21 September 2005 we released a stock exchange announcement and a
transition to IFRS report detailing the impact of IFRS on our previously
reported UK GAAP consolidated results. This information can be found on our
website at www.investec.com.
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. 8) has been proposed by the
board in respect of the financial year ended 31 March 2006. The Annual
General Meeting of members at which the proposed dividend will be considered
for approval is scheduled to take place on Thursday, 10 August 2006.
Subject to the aforegoing approval, shareholders in Investec plc will receive
a total distribution of 53 pence (2005: 37 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 53 pence per ordinary share.
- for South African resident shareholders of Investec plc, through a dividend
paid by Investec plc of 38 pence per ordinary share and through a dividend
paid on the SA DAS share equivalent to 15 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 Tuesday, 25 July 2006
- On the JSE Limited Friday, 21 July 2006
Shares commence trading ex-dividend:
- On the London Stock Exchange Wednesday, 26 July 2006
- On the JSE Limited Monday, 24 July 2006
Record date:
- On the London Stock Exchange Friday, 28 July 2006
- On the JSE Limited Friday, 28 July 2006
Payment date:
- United Kingdom register Monday, 14 August 2006
- South African register Monday, 14 August 2006
Share certificates on the South African branch register may not be
dematerialised or rematerialised between Monday, 24 July 2006 and Friday, 28
July 2006, both dates inclusive, nor may transfers between the UK and SA
registers take place between Monday, 24 July 2006 and Friday, 28 July 2006,
both dates inclusive.
Shareholders registered on the South African register are advised that the
total distribution of 53 pence, equivalent to 627 cents per share, has been
arrived at using the Rand/Pounds Sterling average buy/sell forward rate, as
at 11h00 (SA time) on 17 May 2006.
By order of the board
R Vardy
Company Secretary
18 May 2006
Investec Limited
Notice is hereby given that a final dividend (No. 101) of 627 cents (2005:
437 cents) per ordinary share has been proposed by the board in respect of
the financial year ended 31 March 2006.
The Annual General Meeting of members at which the proposed dividend will be
considered for approval is scheduled to take place on Thursday, 10 August
2006.
The dividend is payable to shareholders recorded in the members" register of
the company at the close of business on Friday, 28 July 2006.
The relevant dates for the payment of the dividend are:
Last day to trade cum-dividend Friday, 21 July 2006
Shares commence trading ex-dividend Monday, 24 July 2006
Record date Friday, 28 July 2006
Payment date Monday, 14 August 2006
The final dividend of 627 cents per ordinary share, has been determined using
the Investec plc distribution of 53 pence per ordinary share into Rands using
the Rand/Pounds Sterling average buy/sell forward rate, as at 11h00 (SA time)
on 17 May 2006.
Share certificates may not be dematerialised or rematerialised between
Monday, 24 July 2006 and Friday, 28 July 2006, both dates inclusive.
By order of the board
S Noik
Company Secretary
18 May 2006
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 in UK GAAP
Pounds Sterling.
Alternatively for further information please contact the Investor Relations
division on e-mail investorrelations@investec.com or telephone +27 11 286
7070 / +44 207 597 5546.
Investec Limited Investec plc
(Registration number (Registration number 3633621)
1925/002833/06)
JSE Code: INL JSE Code: INP
ISIN: ZAE000040531 ISIN: GB0031773103
Company secretary: S Noik Company secretary: R Vardy+
Directors:
H S Herman (Chairman), S Koseff* (Chief Executive), B Kantor* (Managing), S E
Abrahams, G F O Alford+, G R Burger*, C A Carolus, H Fukuda (OBE)+, G M T
Howe+, D E Jowell, I R Kantor, Sir Chips Keswick+, M P Malungani, Sir David
Prosser++, A Tapnack*+, P R S Thomas, F Titi.
*Executive +British
+ Appointed on 23 March 2006 to the boards of Investec Limited and Investec
plc.
Date: 18/05/2006 08:00:26 AM Produced by the JSE SENS Department
