Investec's first half operating profit falls on Rand depreciation

21st Nov 2013 07:50

- Operating profit falls 2.3 per cent- Depreciation of Rand hits results- Total income down 2.5 per cent- Investec addressing drag on performanceInvestec reported a 2.3 per cent fall in first half operating profit to 222.8m pounds as the asset manager's results were affected by the depreciation of the South African Rand by about 16 per cent against the pound.Adjusted earnings, attributable to shareholders, fell 1.8% to £164m in the six months through September, compared to a year earlier.A 12.9% decline in operating profit at the Specialist Banking business offset a 6.8% rise in Asset Management and a 35% jump in the Wealth & Investment division. Asset Management and Wealth & Investment benefitted from higher levels of average funds under management and net inflows of £1.4bn and £400m, respectively. Total operating income before impairment losses on loans and advances decreased by 2.5% to £941.8m.Impairments on loans and advances dropped from £115.6m to £83.1m, as a fall in the UK and South African mitigated a rise in Australia.Net asset value per share dipped 2.7% to 374p, largely as a result of the depreciation of the Rand.The company said while economic conditions remain mixed, the overall group is improving in shape and capability. Investec has made progress in addressing the drag on overall performance and said it will continue to realign the business for future growth and the achievement of its financial targets."We have delivered results at the top end of what we anticipated, despite a sharp fall in the Rand without which we would have shown a 13% increase in earnings," said Chief Executive Officer, Stephen Koseff. "We have worked hard to deal with many of the legacy issues within the group and will continue to take decisive action in order to ensure Investec is in the right shape to take advantage of the recovery in the world economy and markets."Shares fell 0.54% to 424.30p at 08:19 on Thursday.RD