Investec operating profit to edge higher despite rand depreciation of rand

20th Mar 2014 12:21

Overall performance in the second half was negatively affected by the depreciation of the rand against sterling, Investec said in a pre-close trading statement on Thursday, while operating profit is expected to be marginally ahead of the prior year. Although revenue is likely to be marginally behind the prior year, expenses are expected to have decreased "moderately" and impairments are due to be around 35% lower than a year earlier. Earnings per share are set to come in 0-7% higher in sterling and 22-27% higher in rands. Divisionally, Wealth & Investment's results are expected to increase substantially and Asset Management is expected to report results moderately ahead of the prior year. Both divisions have benefited from higher levels of average funds under management supported by net inflows of £1.1bn and £2.5bn, respectively, it said. The South African Specialist Banking business is expected to report results 'substantially ahead' of the prior year in rands, whilst the UK Specialist Banking business is also expected to report results well ahead of the prior year as a result of a notable decline in impairments. As a result of the impact of the strategic restructuring on the Australian business, the global Specialist Banking business is expected to report results marginally ahead of the prior year. The group continued to work towards the sale of its Australian business, which it said had been progressing well, with strong interest from a range of parties with which discussions are ongoing. The potential sale of Kensington, the group's intermediary mortgage business in the UK, which it said was at an early stage in the process. Investec also said that its cash balance remained strong at £9.1bn in cash. The share price was virtually unchanged following the announcement. NR