Wrap Text
Reviewed combined consolidated financial results for the six months ended 30 September 2019
Investec plc Investec Limited
Incorporated in England and Wales Incorporated in the Republic of South Africa
Registration number 3633621 Registration number 1925/002833/06
JSE ordinary share code: INP JSE ordinary share code: INL
LSE ordinary share code: INVP NSX ordinary share code: IVD
ISIN: GB00B17BBQ50 BSE ordinary share code: INVESTEC
LEI: 2138007Z3U5GWDN3MY22 ISIN: ZAE000081949
LEI: 213800CU7SM6O4UWOZ70
INVESTEC PLC AND INVESTEC LIMITED (COMBINED RESULTS)
REVIEWED COMBINED CONSOLIDATED FINANCIAL RESULTS FOR THE SIX MONTHS
ENDED 30 SEPTEMBER 2019
This announcement covers the statutory results of Investec plc and Investec Limited (together "the Investec group" or "the group") for
the six months ended 30 September 2019. The financial impact of strategic actions undertaken to simplify and focus the group has
been separately disclosed from adjusted operating profit. These actions include the closure, sale and restructure of certain businesses.
The prior period has been restated to reflect a like-for-like basis. Unless stated otherwise, comparatives relate to the restated six month
period ended 30 September 2018. Further information is contained in the Group's 2019 Interim Report.
Solid performance against challenging market conditions
- The Group has delivered a solid operational performance with results in line with the pre-close trading update.
- Group adjusted operating profit of GBP373.6 million was broadly consistent with the prior period (1.7% behind prior period and in line
on a neutral currency basis).
- Asset Management generated strong net inflows of GBP3.2 billion, which, together with supportive markets, boosted average assets
under management (AUM) and increased adjusted operating profit by 6.3%.
- The Specialist Banking business had a sound performance from its lending franchises. The South African Specialist Bank's adjusted
operating profit increased by 6.7% (8.5% in Rands). The UK Specialist Bank demonstrated cost discipline, achieving a reduction of
9.1% (GBP25 million) in operating costs. The decrease in the UK Specialist Bank's adjusted operating profit of 18.9% reflects lower
investment banking fees in weak market conditions and base effects of a liability management exercise to restructure subordinated
debt in the prior period, which boosted prior year adjusted operating profit.
- Wealth & Investment generated positive net inflows with growth in AUM supporting higher revenue. An increase in technology spend
to support growth over the longer term, as well as higher than expected regulatory levies in the UK, resulted in a decrease in adjusted
operating profit of 10.8%.
- Group return on equity (ROE) is 13.1% (2018: 14.2%). The group contained costs in a challenging environment and maintained the cost
to income ratio at 67.3%. We are committed to improving these ratios.
- The Bank and Wealth business remains fully committed to delivering its 2022 financial year targets.
- The Group declared an interim dividend of 11.0p per share, in line with the prior period.
Neutral
First half First half currency %
Financial highlights 2020 2019(1) % change change
Adjusted operating profit (GBP'm) 373.6 379.9 (1.7%) 0.0%
Adjusted earnings attributable to shareholders (GBP'm) 273.6 282.1 (3.0%) (1.4%)
Adjusted basic earnings per share (pence) 28.9 30.1 (4.0%) (2.7%)
Basic earnings per share (pence) 24.7 27.6 (10.5%) (9.1%)
Headline earnings per share (pence) 22.7 27.4 (17.2%) (15.7%)
Dividend per share (pence) 11.0 11.0
Dividend cover (times) 2.6 2.7
Annualised credit loss ratio 0.23% 0.34%
Cost to income ratio 67.3% 67.2%
ROE 13.1% 14.2%
(1) Restated.
Neutral
currency
Financial highlights (continued) 30 September 2019 31 March 2019 % change % change
Third party assets under management (GBP'bn) 177.9 167.2 6.4% 6.2%
Customer accounts (deposits) (GBP'bn) 32.0 31.3 2.3% 2.0%
Core loans and advances (GBP'bn) 25.4 24.9 2.0% 1.7%
Common equity tier 1 ratio - Investec Limited 11.6% 10.5%(2)
Common equity tier 1 ratio - Investec plc 10.7% 10.8%
Leverage ratio(3) - Investec Limited 7.3% 7.6%
Leverage ratio(3) - Investec plc 7.8% 7.9%
Net asset value per share (pence) 448.3 434.1 3.3% 2.5%
(2) Investec Limited adopted the Foundation Internal Ratings Based (FIRB) approach, effective 1 April 2019, resulting in a pro-forma CET1 ratio of 11.6% had
the FIRB approach been applied as of 31 March 2019.
(3) Current Leverage ratios calculated on an end quarter basis.
Strategic and operational highlights
- We remain committed to our objective of simplifying and focusing the business in pursuit of growth over the long term.
- The proposed demerger and separate listing of Investec Asset Management is on track, with key regulatory approvals received and
publication of the related Shareholder Circular expected around the end of this month.
- We are growing our client base across the businesses, evidenced by an increase in assets under management, customer deposits
and the loan book. We have continued to grow the client base in the Private Banking business in both the UK and South Africa and
have made good progress in implementing our business banking offerings. Collaborative initiatives across the Bank and Wealth
business, including our digital private client investment management platform in South Africa and our newly launched intermediary
offerings in both geographies, should further extend the client base.
- We have taken decisive action to further focus the Bank and Wealth business (closure of Click & Invest operations, closure and
rundown of Hong Kong direct investments business, sale of Irish Wealth & Investment business, restructure of the Irish branch, sale of
the UK Property Fund). This will continue where necessary.
- The cost of these strategic actions, including the costs incurred in relation to the proposed demerger, of GBP45.3 million (2018:
GBP20.7 million) have been disclosed separately from adjusted operating profit.
- We remain focused on cost containment. The Bank and Wealth business has identified executable central Group cost savings
of approximately GBP10 million and infrastructure rationalisation opportunities of approximately GBP7.5 million by the end of the
2021 financial year and will continue to review the cost base.
- Strategies to reduce the equity investment portfolio over the medium term are progressing. We will aim for optimal timing and intend
to maximise value. Implementation of these strategies in South Africa is expected to result in an approximate R2.5 billion reduction in
required capital.
- We have successfully converted to the Foundation Internal Ratings Based (FIRB) measurement of credit capital in South Africa,
resulting in a 1.1% uplift to the Investec Limited CET1 ratio, effective 1 April 2019. Application has been made to adopt the Advanced
Internal Ratings Based (AIRB) approach in South Africa, with an estimated R3 billion to R4 billion reduction in required capital (circa 1%
CET1 ratio uplift) expected in the medium term.
Fani Titi and Hendrik du Toit, Joint Chief Executive Officers of Investec said:
"The preparations for the demerger of Investec Asset Management (becoming Ninety One) are on schedule. In spite of the challenging
economic environment in which we operate, we are pleased to report further growth in assets under management, customer deposits
and the loan book. Profitable and sustainable growth with improved cost control remain priorities. We are committed to our stated
objective to simplify, focus and grow for the long term, in the interest of all our stakeholders."
Outlook
In the second half we plan to conclude the demerger of the Asset Management business (subject to Investec shareholder and other
customary approvals) and deliver the benefits of focus and simplicity. Despite the challenging economic environment, we remain
committed to revenue growth, cost containment and improving long-term shareholder returns.
On behalf of the boards of Investec plc and Investec Limited
Perry Crosthwaite Fani Titi Hendrik du Toit
Chairman Joint Chief Executive Officer Joint Chief Executive Officer
20 November 2019
Review conclusion
The combined consolidated financial results for the period ended 30 September 2019 have been reviewed by Ernst & Young LLP & Ernst
& Young Inc., who expressed an unmodified review conclusion. A copy of the auditors' review opinion is available for inspection at the
company's registered office together with the financial statements identified in the auditors' report.
The auditors' report does not necessarily report on all of the information contained in these financial results. Shareholders are therefore
advised that in order to obtain a full understanding of the nature of the auditors' engagement, they should obtain a copy of the auditors'
report together with the accompanying financial information from the issuer's registered office.
This short-form announcement is the responsibility of the directors. It is only a summary of the information contained in the full
announcement and does not contain full or complete details. Any investment decision should be based on the full viewed announcement
which can be accessed from Thursday 21 November 2019, using the following JSE link: https://senspdf.jse.co.za/documents/2019/jse/isse/INP/interims.pdf
Alternatively the full announcement is available on our website www.investec.com.
The full announcement is also available at our registered offices for inspection at no charge, during office hours.
Copies of the full announcement may be requested by contacting
Investor Relations on:
Telephone: (+27 11) 286 7000
e-mail: investorrelations@investec.com
Company Secretary:
D Miller~
Registered office:
100 Grayston Drive
Sandown, Sandton, 2196
Transfer secretaries:
Computershare Investor Services (Pty) Ltd
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
Company Secretary:
N van Wyk
Directors:
PKO Crosthwaite~ (Chairman)
HJ du Toit (Joint Chief Executive Officer)
F Titi (Joint Chief Executive Officer)
NA Samujh (Group Finance Director)*
S Koseff (Executive)**
B Kantor (Executive)**
KM McFarland (Executive)
HC Baldock~***
ZBM Bassa
LC Bowden~**
CA Carolus**
D Friedland
PA Hourquebie
CR Jacobs^
IR Kantor(#)
Lord Malloch-Brown KCMG~
KL Shuenyane
PG Sibiya***
~British (#)Dutch ^Irish
* NA Samujh appointed 01 April 2019
** S Koseff, B Kantor, LC Bowden and CA Carolus retired on 08 August 2019
*** HC Baldock and P Sibiya appointed on 09 August 2019
Sponsor:
Investec Bank Limited
Investec plc
Incorporated in England and Wales
Registration number 3633621
LSE ordinary share code: INVP
JSE ordinary share code: INP
ISIN: GB00B17BBQ50
LEI: 2138007Z3U5GWDN3MY22
Ordinary share dividend announcement
In terms of the DLC structure, Investec plc shareholders registered on the United Kingdom share register 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 registered on the South African branch register 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.
Declaration of dividend number 35
Notice is hereby given that an interim dividend number 35, being a gross dividend of 11 pence (2018: 11 pence) per ordinary share has
been declared by the Board from income reserves in respect of the six months ended 30 September 2019 payable to shareholders
recorded in the shareholders' register of the company at the close of business on Friday, 06 December 2019.
- For Investec plc shareholders, registered on the United Kingdom share register, through a dividend
payment by Investec plc from income reserves of 11 pence per ordinary share
- For Investec plc shareholders, registered on the South African branch register, through a dividend payment by Investec Limited, on the
SA DAS share, payable from income reserves, equivalent to 11 pence per ordinary share.
The relevant dates for the payment of dividend number 35 are as follows:
Last day to trade cum-dividend
On the Johannesburg Stock Exchange (JSE) Tuesday, 03 December 2019
On the London Stock Exchange (LSE) Wednesday, 04 December 2019
Shares commence trading ex-dividend
On the Johannesburg Stock Exchange (JSE) Wednesday, 04 December 2019
On the London Stock Exchange (LSE) Thursday, 05 December 2019
Record date (on the JSE and LSE) Friday, 06 December 2019
Payment date (on the JSE and LSE) Wednesday, 18 December 2019
Share certificates on the South African branch register may not be dematerialised or rematerialised between Wednesday, 04 December
2019 and Friday, 06 December 2019, both dates inclusive, nor may transfers between the United Kingdom share register and the South
African branch register take place between Wednesday, 04 December 2019 and Friday, 06 December 2019, both dates inclusive.
Additional information for South African resident shareholders of Investec plc
- Shareholders registered on the South African branch register are advised that the distribution of 11 pence, equivalent to a gross
dividend of 211 cents per share, has been arrived at using the Rand/Pound Sterling average buy/sell forward rate, as determined at
11:00 (SA time) on Wednesday, 20 November 2019
- Investec plc United Kingdom tax reference number: 2683967322360
- The issued ordinary share capital of Investec plc is 696 082 618 ordinary shares
- The dividend paid by Investec plc to South African resident shareholders registered on the
South African branch register and the dividend paid by Investec Limited to Investec plc shareholders on
the SA DAS share are subject to South African Dividend Tax (Dividend Tax) of 20% (subject to any available exemptions as legislated)
- Shareholders registered on the South African branch register who are exempt from paying
the Dividend Tax will receive a net dividend of 211 cents per share, paid by Investec Limited on the SA DAS share
- Shareholders registered on the South African branch register who are not exempt from paying
the Dividend Tax will receive a net dividend of 168.8 cents per share (gross dividend of 211 cents per share less Dividend Tax of
42.2 cents per share) paid by Investec Limited on the SA DAS share.
By order of the board
D Miller
Company Secretary
20 November 2019
Investec Limited
Incorporated in the Republic of South Africa
Registration number 1925/002833/06
JSE ordinary share code: INL
NSX ordinary share code: IVD
BSE ordinary share code: INVESTEC
ISIN: ZAE000081949
LEI: 213800CU7SM6O4UWOZ70
Ordinary share dividend announcement
Declaration of dividend number 128
Notice is hereby given that interim dividend number 128, being a gross dividend of 211 cents (2018: 206 cents) per ordinary share has
been declared by the Board from income reserves in respect of the six months ended 30 September 2019 payable to shareholders
recorded in the shareholders' register of the company at the close of business on Friday, 06 December 2019.
The relevant dates for the payment of dividend number 128 are as follows:
Last day to trade cum-dividend Tuesday, 03 December 2019
Shares commence trading ex-dividend Wednesday, 04 December 2019
Record date Friday, 06 December 2019
Payment date Wednesday, 18 December 2019
The interim gross dividend of 211 cents per ordinary share has been determined by converting the Investec plc distribution of 11 pence
per ordinary share into Rands using the Rand/Pounds Sterling average buy/sell forward rate at 11h00 (SA time) on Wednesday,
20 November 2019.
Share certificates may not be dematerialised or rematerialised between Wednesday, 04 December 2019 and Friday, 06 December 2019,
both dates inclusive.
Additional information to take note of:
- Investec Limited South African tax reference number: 9800/181/71/2
- The issued ordinary share capital of Investec Limited is 318 904 709 ordinary shares
- The dividend paid by Investec Limited is subject to South African Dividend Tax (Dividend Tax) of 20% (subject to any available
exemptions as legislated)
- Shareholders who are exempt from paying the Dividend Tax will receive a net dividend of 211 cents per ordinary share
- Shareholders who are not exempt from paying the Dividend Tax will receive a net dividend of 168.8 cents per ordinary share
(gross dividend of 211 cents per ordinary share less Dividend Tax of 42.2 cents per ordinary share).
By order of the board
N van Wyk
Company Secretary
20 November 2019
Investec plc
Incorporated in England and Wales
Registration number 3633621
LSE share code: INPP
ISIN: GB00B19RX541
LEI: 2138007Z3U5GWDN3MY22
Preference share dividend announcement
Non-redeemable non-cumulative non-participating preference shares ("preference shares")
Declaration of dividend number 27
Notice is hereby given that preference dividend number 27 has been declared by the Board from income reserves for the period
01 April 2019 to 30 September 2019 amounting to a gross preference dividend of 8.77397 pence per preference 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, 06 December 2019.
For shares trading on the Johannesburg Stock Exchange (JSE), the dividend of 8.77397 pence per preference share is equivalent to a
gross dividend of 168.39530 cents per share, which has been determined using the Rand/Pound Sterling average buy/sell forward rate
as at 11h00 (SA time) on Wednesday, 20 November 2019.
The relevant dates for the payment of dividend number 27 are as follows:
Last day to trade cum-dividend
On the Johannesburg Stock Exchange (JSE) Tuesday, 03 December 2019
On the International Stock Exchange (TISE) Wednesday, 04 December 2019
Shares commence trading ex-dividend
On the Johannesburg Stock Exchange (JSE) Wednesday, 04 December 2019
On the International Stock Exchange (TISE) Thursday, 05 December 2019
Record date (on the JSE and TISE) Friday, 06 December 2019
Payment date (on the JSE and TISE) Tuesday, 17 December 2019
Share certificates may not be dematerialised or rematerialised between Wednesday, 04 December 2019 and Friday, 06 December 2019,
both dates inclusive, nor may transfers between the United Kingdom share register and the South African branch register take place
between Wednesday, 04 December 2019 and Friday, 06 December 2019, both dates inclusive.
Additional information for South African resident shareholders of Investec plc
- Investec plc United Kingdom tax reference number: 2683967322360
- The issued preference share capital of Investec plc is 2 754 587 preference shares
- The dividend paid by Investec plc to shareholder recorded on the South African branch
register is subject to South African Dividend Tax (Dividend Tax) of 20% (subject to any available exemptions as legislated)
- The net dividend amounts to 134.71624 cents per preference share for preference shareholders liable to pay the Dividend Tax and
168.39530 cents per preference share for preference shareholders exempt from paying the Dividend Tax.
By order of the board
D Miller
Company Secretary
20 November 2019
Investec plc
Incorporated in England and Wales
Registration number 3633621
JSE share code: INPPR
ISIN: GB00B4B0Q974
LEI: 2138007Z3U5GWDN3MY22
Rand-denominated preference share dividend announcement
Rand-denominated non-redeemable non-cumulative non-participating perpetual preference
shares ("preference shares")
Declaration of dividend number 17
Notice is hereby given that preference dividend number 17 has been declared by the Board from income reserves for the period
01 April 2019 to 30 September 2019 amounting to a gross preference dividend of 488.20890 cents per preference share payable to
holders of the Rand-denominated non-redeemable non-cumulative non-participating perpetual preference shares as recorded in the
books of the company at the close of business on Friday, 06 December 2019.
The relevant dates for the payment of dividend number 17 are as follows:
Last day to trade cum-dividend Tuesday, 03 December 2019
Shares commence trading ex-dividend Wednesday, 04 December 2019
Record date Friday, 06 December 2019
Payment date Tuesday, 17 December 2019
Share certificates may not be dematerialised or rematerialised between Wednesday, 04 December 2019 and Friday, 06 December 2019,
both dates inclusive.
Additional information for South African resident shareholders of Investec plc
- Investec plc United Kingdom tax reference number: 2683967322360
- The issued Rand-denominated preference share capital of Investec plc is 131 447 preference shares
- The dividend paid by Investec plc to shareholders recorded on
the South African branch register is subject to South African Dividend Tax (Dividend Tax) of 20% (subject to any available exemptions
a legislated)
- The net dividend amounts to 390.56712 cents per preference share for preference shareholders liable to pay the Dividend Tax and
488.20890 cents per preference share for preference shareholders exempt from paying the Dividend Tax.
By order of the board
D Miller
Company Secretary
20 November 2019
Investec Limited
Incorporated in the Republic of South Africa
Registration number 1925/002833/06
JSE share code: INPR
NSX ordinary share code: IVD
BSE ordinary share code: INVESTEC
ISIN: ZAE000063814
LEI: 213800CU7SM6O4UWOZ70
Preference share dividend announcement
Non-redeemable non-cumulative non-participating preference shares ("preference shares")
Declaration of dividend number 30
Notice is hereby given that preference dividend number 30 has been declared by the Board from income reserves for the period
01 April 2019 to 30 September 2019 amounting to a gross preference dividend of 395.72146 cents per preference 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, 13 December 2019.
The relevant dates for the payment of dividend number 30 are as follows:
Last day to trade cum-dividend Tuesday, 10 December 2019
Shares commence trading ex-dividend Wednesday, 11 December 2019
Record date Friday, 13 December 2019
Payment date Tuesday, 17 December 2019
Share certificates may not be dematerialised or rematerialised between Wednesday, 11 December 2019 and Friday, 13 December 2019,
both dates inclusive.
Additional information to take note of:
- Investec Limited South African tax reference number: 9800/181/71/2
- The issued preference share capital of Investec Limited is 32 214 499 preference shares
- The dividend paid by Investec Limited is subject to South African Dividend Tax (Dividend Tax) of 20% (subject to any available
exemptions as legislated)
- The net dividend amounts to 316.57717 cents per preference share for shareholders liable to pay the Dividend Tax and 395.72146 cents
per preference share for preference shareholders exempt from paying the Dividend Tax.
By order of the board
N van Wyk
Company Secretary
20 November 2019
Date: 21/11/2019 09:02:00
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