Investec expects double-digit earnings growth after year of change
Investec Group published its pre-close trading update for the financial year to the end of March 2024, saying it expects double-digit earnings growth after a year of change.
The trading update followed what has been a period of significant change for the group. During the current fiscal year, the company completed the combination of Investec Wealth & Investment UK (IW&I UK) with the Rathbones Group and disposed of its property management companies to Investec Property Fund (IPF) – now known as Burstone Group – which has been consolidated.
The group also restructured its Bud Group Holdings business to facilitate a sale.
In the past few years Investec also spun off its wealth management business Ninety One and sold its remaining 15 per cent stake in 2021.
The group also unlocked capital from its South African arm, which was subsequently used for a £300m share buyback.
For the year to the end of March, the group said it expects adjusted earnings per share of 76p to 80p, 10 per cent to 16 per cent ahead of the prior year.
However, when including the corporate changes noted above and profit on the UK Wealth & Investment combination, the company said it had pencilled in basic earnings per share of between 102.9p and 106.8p.
The group said it expected to report adjusted operating profit before tax for the year of between £866.9m and £909.6m. Return on equity is towards the high end of the group’s 12 per cent to 16 per cent target.
At the firm’s UK arm, Investec said adjusted operating profit is expected to be 15 per cent up on the prior thanks to growth at its specialist bank and wealth management joint venture.
The Southern African business’ adjusted operating profit to be at least 10 per cent ahead of prior year in rand. The rand to sterling exchange rate depreciated by 15 per cent in the reporting period.
Investec said: “The group remains committed to its strategic priority to optimise shareholder returns while creating enduring worth for all our stakeholders. We have made significant progress on the share repurchase programme announced in November 2022 and concluded the disposal of the property management companies to Burstone Group.
“The Bud Group Holdings announced the proposed disposal of Assupol to Sanlam. Assupol is a significant asset within the group of assets earmarked to facilitate Investec’s and other shareholders’ exit from The Bud Group Holdings,” it added.