Interim Results
Investec PLC
17 November 2005
17 November 2005 -Investec plc (incorporating the results of Investec Limited)
Investec reports substantial growth in first half
Operating profit increased by 58.2%; Adjusted EPS increased by 40.4%; Dividend
increased by 26.7%
Investec, the international specialist banking group, announces today its
interim results for the six months ended 30 September 2005
Financial highlights
• Operating profit before taxation* increased 58.2% to £152.8 million
(2004: £96.6 million)
• Profit after tax, impairment of goodwill and non-operating items
increased significantly to £181.5 million (2004: £62.7 million)
• Adjusted earnings per share* increased 40.4% to 85.2p (2004: 60.7p)
• Interim dividend per share increased 26.7% to 38p (2004: 30p) -
equating to a cover of 2.2 times
• Annualised return on adjusted shareholders' equity of 22.1% (2004: 18.7%)
• Cost to income ratio of 61.9% (2004: 68.7%)
• Core loans and advances increased 23.3% to £7.9 billion (1 April 2005:
£6.4 billion). Asset quality remains highly satisfactory with the percentage
of gross non-performing loans to core loans and advances decreasing from
0.9% to 0.7%.
• Third party assets under management increased 37.0% to £46.4 billion (1
April 2005: £33.9 billion)
Business highlights
• Strong operating profit growth from all businesses:
- Private Client Activities: increase of 28.5% to £50.1 million (2004:
£39.0 million)*
- Treasury and Specialised Finance: increase of 34.0% to £28.7 million
(2004: £21.4 million)*
- Investment Banking: increase of 123.9% to £42.1 million (2004: 18.8
million)*
- Asset Management: increase of 56.7% to £21.8 million (2004: £13.9
million)*
- Property Activities: increase of 8.7% to £7.2 million (2004: £6.6
million)*
*before a non-operating gain of £75.7 million (2004: a non-operating loss of
£16.5 million) and goodwill impairments of £6.6 million (2004: negative goodwill
of £4.3 million)
Stephen Koseff, Chief Executive Officer of Investec, said:
'These results reflect strong performances across the board and demonstrate the
strides we have taken over the last few years to refocus and build a sustainable
earnings base. The scale we have built in many of our businesses and strong
focus on client delivery has enabled us to take advantage of more favourable
market conditions.'
Bernard Kantor, Managing Director of Investec, said:
'The growth achieved in the first half illustrates the progress we have made on
building a distinctive franchise across South Africa, Australia and the UK. All
of our businesses continue to perform well and we remain confident on the
outlook for the remainder of the financial year.'
For further information please contact:
Investec +27 (0)11 286 7070 Citigate Dewe Rogerson
Stephen Koseff, Chief Executive Officer +44(0)20 7638 9571
Bernard Kantor, Managing Director Jonathan Clare
Ursula Munitich, Investor Relations Simon Rigby
(+27 (0) 82 552 98808) Sara Batchelor
The management of Investec will host a presentation commencing at 09:00 (UK
time) / 11:00 (SA time) from their office in Johannesburg, and via video linkup
to their office at 2 Gresham Street, London EC2V 7QP. Details of the conference
call facilities and a delayed webcast of the presentation are available at
www.investec.com.
About Investec
Investec is an international specialist banking group that provides a diverse
range of financial products and services to a niche client base in three princi
pal markets, the United Kingdom, South Africa and Australia as well as certain
other countries. The group was established in 1974 and currently has
approximately 4 100 employees.
Investec focuses on delivering distinctive profitable solutions for its clients
in five core areas of activity namely, Private Client Activities, Treasury and
Specialised Finance, Investment Banking, Asset Management and Property
Activities.
In July 2002 the Investec group implemented a dual listed company structure with
listings on the London and Johannesburg Stock Exchanges. Management and staff
own approximately 16% of the equity share capital of the group. The combined
group's current market capitalisation is approximately £2.8 billion
Investec plc (incorporating the results of Investec Limited)
Unaudited consolidated financial results for the six months ended 30 September
2005 prepared using International Financial Reporting Standards and expressed in
Pounds Sterling
Commentary
----------
The financial information contained in this commentary is prepared in accordance
with International Financial Reporting Standards (IFRS). Rand values included in
this section are translated into Pounds Sterling - in the case of the income
statement at the weighted average rate for the relevant period, and in the case
of the balance sheets at the relevant closing rate. The average Rand/Pounds
Sterling exchange rates were 11.76 and 11.74 for the six months ended 30
September 2005 and 30 September 2004, respectively.
Unless the context indicates otherwise, all comparatives relate to the pro-forma
results (as explained in the 'Accounting policies and disclosures' section
below) for the six months ended 30 September 2004. A number of significant
corporate actions have been undertaken during the period which have a bearing on
our performance and these have been highlighted in the 'Presentation of
financial information' section.
Overall performance
-------------------
We are pleased to announce that for the six months ended 30 September 2005,
adjusted earnings per share (EPS) before goodwill impairment and non-operating
items increased by 40.4% to 85.2 pence from 60.7 pence. We have benefited from a
strong performance from all our businesses, supported by favourable economic
conditions, and have achieved our stated growth and financial return objectives.
The salient features of the period under review are:
• Operating profit before goodwill impairment, non-operating items and
taxation increased 58.2% from £96.6 million to £152.8 million.
• Earnings attributable to ordinary shareholders before goodwill
impairment and non-operating items increased 37.4% from £68.0 million to
£93.4 million.
• Annualised return on adjusted shareholders' equity (inclusive of
compulsorily convertible instruments) increased from 18.7% to 22.1% against a
target of greater than 20%.
• The ratio of total operating expenses to total operating income
improved from 68.7% to 61.9% against a target of below 65%.
• Core loans and advances have increased by 23.3% to £7.9 billion since
1 April 2005. Asset quality remains highly satisfactory with the percentage of
gross non-performing loans to core loans and advances decreasing from 0.9% to
0.7%.
• Third party assets under management increased by 37.0% to £46.4
billion since 1 April 2005, supported by favourable markets and the corporate
transactions undertaken.
• The board declared a dividend of 38 pence (2004: 30 pence) per ordinary
share, equating to a dividend cover based on the group's adjusted EPS before
impairment of goodwill and non-operating items of 2.2 times (2004: 2.0
times). This is consistent with our policy of maintaining a dividend cover
range of 1.7 to 2.3 times.
Business unit review
--------------------
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 before goodwill impairment and non-operating items of 28.5% to
£50.1 million (2004: £39.0 million).
• Private Banking
Operating profit of the Private Banking division before goodwill impairment and
non-operating items increased by 28.5% to £42.4 million (2004: £33.0 million)
driven by solid growth in total advances and strong performances recorded across
the majority of the division's areas of activities. Since 1 April 2005, the
private client lending book has grown by 18.2% to £5.1 billion and the division
increased its retail deposit book by 18.8% to £3.9 billion.
• Private Client Portfolio Management and Stockbroking
Private Client Portfolio Management and Stockbroking recorded strong growth,
generating operating profit before goodwill impairment and non-operating items
of £7.7 million (2004: £6.0 million), an increase of 28.3%. The Private Client
business in South Africa has benefited from positive equity market conditions
and the acquisition of HSBC's Private Client business in South Africa. Since 1
April 2005, total funds under management have increased by 72.3% to £6.2
billion. The results of the UK operations include our 47.7% associate
shareholding in Rensburg Sheppards plc's post tax earnings.
Treasury and Specialised Finance
The Treasury and Specialised Finance division posted operating profit before
goodwill impairment and non-operating items of £28.7 million (2004: £21.4
million), an increase of 34.0%. Growth was underpinned by a solid performance
from the division's advisory, structuring, asset creation and distribution
activities with advances increasing by 29.6% to £2.6 billion since 1 April 2005.
Investment Banking
The group's Investment Banking division recorded a significant increase in
operating profit before goodwill impairment and non-operating items from £18.8
million to £42.1 million. The Institutional Stockbroking operations continued to
perform well against a backdrop of favourable equity markets and the Corporate
Finance operations benefited from a sound deal pipeline across all geographies.
The Direct Investments and Private Equity divisions continued to perform
strongly across the board reflecting our increasing presence in this activity.
Asset Management
The Asset Management division delivered substantial growth in operating profit
before goodwill impairment and non-operating items of 56.7% to £21.8 million
(2004: £13.9 million). The division was boosted by favourable market conditions
and net inflows of £494 million with assets under management increasing by 18.2%
to £27.1 billion since 1 April 2005. 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 before goodwill impairment and non-operating items of the
Property Activities division increased by 8.7% to £7.2 million (2004: £6.6
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 partially offset by a
weaker performance in the UK.
Group Services and Other Activities
Group Services and Other Activities earned an operating profit before goodwill
impairment and non-operating items of £3.0 million compared to the prior period
loss of £3.1 million. The 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 a decrease in earnings from Assurance
Activities and associates following the disposal of these activities in the
prior period.
Financial statements analysis
-----------------------------
Operating income
Operating income increased by 23.6% to £414.7 million (2004: £335.4 million).
The movements in total operating income are analysed further below.
Net interest income increased by 44.3% to £114.9 million (2004:£79.6 million) as
a result of a strong growth in core loans and advances of 23.3% to £7.9 billion
since 1 April 2005 and increased cash holdings within the Central Funding
division.
The growth in net fees and commissions of 5.2% to £190.0 million (2004: £180.5
million) is impacted by the sale of Carr Sheppards Crosthwaite to Rensburg plc.
Excluding the consolidated income earned from Carr Sheppards Crosthwaite in both
periods results in an increase of 17.2% to £186.5 million. This result was
supported by favourable market and economic conditions and increased
transactional activity in the majority of our businesses.
Income from principal transactions increased significantly to £93.6 million
(2004: £52.0 million) mainly as a result of the strong performance of the
underlying assets within the Direct Investments, Private Equity, Property and
Central Funding portfolios and an improved performance from our market making
activities.
Operating income from associates decreased by 58.7% to £2.9 million (2004: £7.1
million). The current period figures include Investec's 47.7% share of the
reported operating earnings of Rensburg Sheppards plc for the period 6 May 2005
to 30 September 2005. In the prior period 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 period. A net profit of
£1.5 million (2004: £5.2 million) was generated from assurance activities, which
represents the residual earnings from the businesses that were retained.
Other operating income of £3.9 million (2004: £3.6 million) principally
represents net rental income earned by the Central Funding division.
Impairment losses on loans and advances
Impairment losses on loans and advances decreased by 38.3% to £5.2 million
(2004: £8.5 million) largely as a result of a large provision made in the prior
period.
The percentage of gross non-performing loans (NPLs) to core loans and advances
decreased from 0.9% to 0.7%. Total impairment coverage remains highly
satisfactory both as a percentage of gross NPLs and net NPLs (gross NPLs net of
security), at 69.6% and 150.0% respectively.
Administrative expenses
Total administrative expenses increased by 12.0% to £252.8 million (2004: £225.7
million), and by 21.6% if the costs of Carr Sheppards Crosthwaite are excluded
in both periods. Variable remuneration increased by 37.4% to £60.1 million due
to increased profitability. Other operating expenses increased by 5.9% to £192.7
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 for a group of senior employees in June 2005.
We achieved our target of operating expenses to total operating income of less
than 65% as the ratio decreased from 68.7% to 61.9%, principally as a result of
the strong growth in operating income of 23.6%.
Goodwill impairment
The charge for goodwill impairment increased from negative £4.3 million to £6.6
million. The current charge largely relates to impairment of goodwill
attributable to property management contracts with respect to a portfolio of
properties sold. The prior period included an amount of £5 million relating to
negative goodwill arising from a structured finance transaction.
Non-operating items
• Non-operating items principally includes a profit of £79.5 million
arising out of the effective 52.3% sale of Carr Sheppards Crosthwaite to
Rensburg plc offset by Investec's £3 million share of integration costs
relating to the transaction.
• The prior period included provisions for losses arising on the sale of
the banking subsidiary in Israel and losses arising on the closure of the
Traded Endowments operation in the UK.
Taxation
• The operational effective tax rate of the group increased from 24.2% to
26.9% due to a reduction in the level of non-taxable income.
Capital resources
Since 1 April 2005 total capital resources (including total equity and
subordinated liabilities) increased by 21.2% to £1.9 billion largely as a result
of the issue of €200 million (£132 million) preferred securities by a subsidiary
of Investec plc in June 2005, the gain on the sale of Carr Sheppards Crosthwaite
and increased operating earnings.
The annualised return on adjusted shareholders' equity (inclusive of
compulsorily convertible instruments) increased from 18.7% to 22.1%, exceeding
our target of 20%.
Investec plc and Investec Limited are well capitalised with capital adequacy
ratios comfortably exceeding the minimum regulatory requirements. The capital
adequacy of Investec plc (applying UK Financial Services Authority rules to its
capital base) is 18.7% (March 2005: 15.5%). The capital adequacy of Investec
Limited (applying South African Reserve Bank rules to its capital base) is 17.9%
(March 2005: 20.1%).
Assets under administration
Since 1 April 2005 third party assets under management have increased by 37.0%
from £33.9 billion to £46.4 billion, with sound growth across all ranges of
funds. On balance sheet assets grew by 1.2% from £19.9 billion to £20.2 billion
with strong growth in core advances offset by a decline in reverse repurchase
agreements and cash collateral on securities borrowed.
Outlook
-------
Within the context of a competitive operating environment, we have continued to
enhance the quality and sustainability of our earnings. We firmly believe that
our niche focus, our ability to be distinctive and the capability of our people
will enable us to take advantage of favourable market conditions and the board
remains confident on the outlook for the remainder of the financial year.
On behalf of the boards of Investec plc and Investec Limited
Hugh Herman Stephen Koseff Bernard Kantor
Chairman Chief Executive Officer Managing Director
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 consolidating the results and financial position of
both companies.
Accordingly, the interim results for Investec plc 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.
The following significant corporate actions have been undertaken during the
period under review and the previous financial year:
• The sale of our 80.28% stake in Investec Bank (Israel) Limited to The
First International Bank of Israel Ltd on 22 December 2004.
• The reinsurance of the group risk business conducted by Investec Employee
Benefits to Capital Alliance Holdings Limited (CAL) executed on 31 December
2004.
• Investec Limited issued R2.3 billion (£207.3 million) of non-redeemable,
non-cumulative, non-participating preference shares in February 2005.
• The sale of our associate investment in CAL, to Liberty Group Limited
effective on 31 March 2005.
• The acquisition of HSBC's private client business in South Africa
effective 1 April 2005.
• The sale of our UK Private Client Stockbroking business, Carr Sheppards
Crosthwaite Ltd, to Rensburg plc on 6 May 2005. We retain 47.7% interest in
the combined entity, Rensburg Sheppards plc.
• A subsidiary of Investec plc issued €200 million preferred securities in
June 2005.
Accounting policies and disclosures
-----------------------------------
Transition to International Financial Reporting Standards
---------------------------------------------------------
From 1 April 2005 we are 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 first full year IFRS compliant financial
statements that will be prepared by us will be for the year ending 31 March
2006.
Our transition to IFRS has been performed in accordance with IFRS 1 'First-Time
Adoption of International Reporting Standards' and other relevant standards
expected to be 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.
• 30 September 2004 - six month comparative period to 30 September 2005.
• 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 IAS39 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
Future developments under IFRS
The financial information contained in this announcement has been prepared on
the group's expectation of standards that will be applicable at 31 March 2006
(being the first time that the group will prepare annual financial statements
under IFRS). Changes to information presented in this report may be required due
to one or more of the following reasons:
• Further standards and interpretations may be issued that could be
applicable to the financial year ending 31 March 2006.
• Interpretations may differ as practice develops.
• Tax legislation and tax related interpretations may develop further.
Investec plc - dividend announcement
-------------------------------------
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 an interim dividend (No. 7) has been declared by the
board in respect of the six months ended 30 September 2005. Shareholders in
Investec plc will receive a total distribution of 38 pence (2004: 30 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 38 pence per ordinary
share in Investec plc.
- for South African resident shareholders of Investec plc,
through a dividend paid on the SA DAS share equivalent to
38 pence per ordinary share in Investec plc.
The relevant dates for the payment of the dividends are:
Last day to trade cum-dividend:
- On the London Stock Exchange Tuesday, 13 December 2005
- On the JSE Limited Thursday, 8 December 2005
Shares commence trading ex-dividend:
- On the London Stock Exchange Wednesday, 14 December 2005
- On the JSE Limited Friday, 9 December 2005
Record date:
- On the London Stock Exchange Friday, 16 December 2005
- On the JSE Limited Thursday, 15 December 2005
Payment date:
- United Kingdom register Friday, 23 December 2005
- South African register Friday, 23 December 2005
Share certificates on the South African branch register may not be
dematerialised or rematerialised between Friday, 9 December 2005 and Thursday,
15 December 2005, both dates inclusive, nor may transfers between the UK and SA
registers take place between Friday, 9 December 2005 and Thursday, 15 December
2005,both dates inclusive.
Shareholders registered on the South African register are advised that the total
distribution of 38 pence, equivalent to 446 cents per share, has been arrived at
using the Rand/Pounds Sterling average buy/sell forward rate, as determined at
11h00 (SA time) on 16 November 2005.
By order of the board
R Vardy
Company Secretary 17 November 2005
Investec plc (incorporating the results of Investec Limited)
Unaudited consolidated financial results for the six months to 30 September 2005
prepared using International Financial Reporting Standards expressed in Pounds
Sterling
Salient Features
30 Sept % Pro forma Pro forma
2005 Change 30 Sept 31 March
2004 2005
Adjusted earnings before goodwill
impairment and non-operating items
(£'000) 93 357 37.4 67 952 149 510
Operating profit before goodwill
impairment and non-operating items
and taxation (£'000) 152 771 58.2 96 581 224 124
Earnings attributable to
shareholders (£'000) 177 469 188.8 61 443 110 888
Adjusted earnings per share (before
goodwill impairment and
non-operating items) (pence) 85.2 40.4 60.7 134.6
Earnings per share (pence) 155.6 214.3 49.5 89.2
Dividends per share (pence) 38.0 26.7 30.0 67.0
Consolidated income statements
Pro forma Pro forma IFRS IFRS
IFRS IFRS restated restated
restated restated
£'000 6 months 6 months Year to 6 months Year to
to 30 Sept to 30 31 March to 30 Sept 31 March
2005 Sept 2004 2005 2004 2005
Interest receivable 410 559 368 040 758 513 357 317 734 765
Interest payable (295 613) (288 396) (587 945) (288 396) (587 945)
Net interest income 114 946 79 644 170 568 68 921 146 820
Fees and commissions receivable 208 857 191 052 403 543 207 357 439 958
Fees and commissions payable (18 902) (10 515) (25 818) (10 515) (25 818)
Principal transactions 93 592 52 019 140 158 49 619 135 358
Operating income from associates 2 949 7 138 14 474 7 138 14 474
Investment income on assurance
activities 76 387 134 390 258 855 134 390 258 855
Premiums and reinsurance
recoveries on insurance contracts 72 486 118 147 246 537 118 147 246 537
Other operating income 3 851 3 649 6 120 3 649 6 120
Other income 439 220 495 880 1 043 869 509 785 1 075 484
Claims and reinsurance premiums on
insurance business (139 464) (240 117) (478 894) (240 117) (478 894)
Total operating income net of
insurance claims 414 702 335 407 735 543 338 589 743 410
Impairment losses on loans and
advances (5 230) (8 474) (15 845) (13 415) (27 796)
Net operating income 409 472 326 933 719 698 325 174 715 614
Administrative expenses (252 783) (225 679) (485 444) (225 679) (485 444)
Depreciation and impairment of
property, plant and equipment (3 918) (4 673) (10 130) (4 673) (10 130)
Operating profit before goodwill
impairment 152 771 96 581 224 124 94 822 220 040
Impairment of goodwill (6 595) 4 308 (37 010) 4 308 (37 010)
Operating profit 146 176 100 889 187 114 99 130 183 030
Profit/(loss) on disposal or
termination of group operations 75 660 (16 492) (14 629) (16 492) (14 629)
Profit before taxation 221 836 84 397 172 485 82 638 168 401
Taxation (40 323) (21 662) (59 226) (22 058) (60 463)
Profit after taxation 181 513 62 735 113 259 60 580 107 938
Earnings attributable to minority
interests 4 044 1 292 2 371 1 292 2 371
Earnings attributable to
shareholders 177 469 61 443 110 888 59 288 105 567
Earnings attributable to
shareholders' equity 181 513 62 735 113 259 60 580 107 938
Earnings and dividends per share
Pro forma Pro forma IFRS IFRS
IFRS IFRS restated restated
restated restated
For the 6 6 months Year to 31 6 months Year to
months to to 30 Sept March 2005 to 30 Sept 31 March
£'000 30 Sept 2004 2004 2005
2005
Earnings attributable to
shareholders 177 469 61 443 110 888 59 288 105 567
Impairment of goodwill 6 595 (4 308) 37 010 (4 308) 37 010
(Profit)/loss on disposal or
termination of group
operations (75 660) 16 492 14 629 16 492 14 629
Preference dividends (6 917) (5 986) (11 742) (5 986) (11 742)
Additional earnings
attributable to preference
shareholders (8 130) 311 (1 275) 311 (1 275)
Adjusted earnings (before
goodwill impairment and
non-operating items) 93 357 67 952 149 510 65 797 144 189
Earnings per share (pence)
- basic 155.6 49.5 89.2 47.6 84.5
- diluted 146.4 48.2 85.4 46.4 81.0
Adjusted earnings per share
(pence)
- basic 85.2 60.7 134.6** 58.8 129.8
- diluted 80.7 58.5 127.5** 56.7 123.1
Dividends per share (pence)
- interim 38.0 30.0 30.0 30.0 30.0
- final - - 37.0 - 37.0
Number of weighted average
shares
- basic ('000) 109.62 111.92 111.09 111.92 111.09
**Per the Transition to IFRS Report (issued on 21 September 2005) the adjustment
on adoption of IAS 32 and IAS 39 increased reserves of £17.6m This increase has
been adjusted downward by £4.5m (after taxation effects) to £13.1 million as a
result of interpretation and model enhancements relating to the recognition of
certain fee income as a component of the effective yield of a lending
transactions. These adjustments relate only to private banking activities.
Similarly, adjusted EPS for the year ended 31 March 2005 has been revised
downwards to 134.6 pence.
Consolidated balance sheets at
£'000 1 April 30 Sept
30 Sept 2005 31 March 2004
2005 2005
Assets
Cash and balances at central
banks 125 343 105 130 105 130 217 460
Treasury bills and other eligible
bills 323 622 277 583
Loans and advances to banks
1 368 108 1 563 066 3 017 326 2 751 353
Reverse repurchase agreements and
cash collateral
on securities borrowed 682 354 2 318 745
Trading securities 1 308 753 1 279 111
Derivative financial instruments 868 549 936 097
Cash equivalent advances to
customers 683 731 710 721
Investment securities 1 220 405 1 188 405
Loans and advances to customers 7 903 166 6 408 368 7 402 460 6 544 234
Other assets 1 091 037 883 555 1 346 017 1 402 377
Debt securities 2 001 682 1 813 798
Equity shares 531 262 355 512
Interests in associated
undertakings 58 545 13 219 13 219 81 918
Deferred taxation assets 48 097 51 498 49 023 46 899
Property, plant and equipment 231 812 233 867 233 867 219 720
Goodwill 190 257 199 313 199 313 248 202
Intangible assets 6 474 4 587 4 587 -
15 786 631 15 895 682 15 227 508 13 959 056
Other financial instruments at
fair value through
profit and loss
-in respect of liabilities to
customers under insurance
and investment contracts 3 071 676 2 815 137
-assets related to reinsurance
contracts 1 302 165 1 209 165
Long-term assurance assets
attributable to
policyholders 2 815 137 2 689 767
20,160,472 19,919,984 18,042,645 16,648,823
Liabilities
Deposits by banks 1 282 297 780 829 912 526 886 583
Derivative financial instruments 617 201 838 578
Other trading liabilities 408 279 1 892 732
Repurchase agreements and cash
collateral on
securities lent 83 117 508 301
Customer accounts 7 583 753 6 458 714 6 805 429 7 233 545
Debt securities in issue 2 296 949 1 926 889 1 925 124 1 165 994
Other liabilities 1 482 760 1 809 403 3 700 989 3 012 160
Current taxation liabilities 85 155 72 834 72 834 58 940
Deferred taxation liabilities 22 352 20 784 7 445 9 973
Accruals and deferred income 226 763 191 299
Pension fund liability 9 141 10 991 10 991 17 295
13 871 004 14 320 055 13 662 101 12 575 789
Liabilities to customers under
investment contracts 2 939 994 2 664 434
Insurance liabilities, including
unit-linked liabilities 131 682 145 136
Reinsured liabilities 1 302 165 1 209 165
Long-term assurance liabilities
attributable to
policyholders 2 815 137 2 689 767
18 244 845 18 338 790 16 477 238 15 265 556
Subordinated liabilities
(including convertible debt) 526 578 502 675 499 995 500 326
18 771 423 18 841 465 16 977 233 15 765 882
Equity
Called up share capital 165 165 165 165
Share premium account 1 029 120 1 029 242 1 029 242 1 027 539
Treasury shares (99 753) (109 362) (99 873) (83 907)
Equity portion of convertible
instruments 2 191 2 191 2 191 2 384
Perpetual preference shares 205 587 196 742 323 800 127 622
Other reserves 117 101 78 054 39 617 50 291
Profit and loss account (155 184) (263 622) (248 975) (284 123)
Shareholders' equity excluding
minority interests 1 099 227 933 410 1 046 167 839 971
Minority interests 289 822 145 109 19 245 42 970
Total shareholders' equity 1 389 049 1 078 519 1 065 412 882 941
Total liabilities and
shareholders' equity 20 160 472 19 919 984 18 042 645 16 648 823
Summarised consolidated statements of changes in equity
6 months to 6 months to 12 months to
£'000 30 Sept 30 Sept 31 March
2005 2004 2005
Balance at the beginning of the
period 1 078 519 869 123 869 123
As previously reported 967 256 766 373 766 373
Changes in accounting policies
arising from adoption of IFRS
-Minority interests included within
reconciliation of reserves 13 195 39 029 39 029
-IFRS 2 - share based payments 554 (272) (272)
-IFRS 3 - business combinations 10 943 - -
-IAS 10 - events after balance sheet
date 49 593 38 474 38 474
-IAS 12 - income taxes 7 298 81 81
-IAS 17 - leases (6 933) (594) (594)
-IAS 19 - employee benefits (140) (140) (140)
-IAS 27/28/31 - consolidations,
associates and joint ventures 23 646 26 172 26 172
Restated prior to adoption of IAS 32 & 39 1 065 412 869 123 869 123
-IAS 32/39 - financial instruments
(adopted from 1 April 2005) 13 107 - -
Foreign currency adjustments 31 450 (7 446) (15 263)
Earnings for the period attributable
to ordinary shareholders 177 469 59 288 105 567
Earnings for the period attributable
to minority interests 4 044 1 292 2 371
Share based payments adjustments 9 403 4 565 8 849
Fair value movements on available for
sale assets (5 245) - -
Dividends paid to ordinary
shareholders (41 681) (30 213) (55 394)
Dividends paid to minority
shareholders (6 917) (5 986) (11 742)
Issue of perpetual preference shares - - 207 313
Share issue expenses (556) - (838)
Re-issue of treasury shares 10 043 443 2 146
Purchase of treasury shares - - (16 159)
Release of pension fund deficit - - 2 370
Issue of equity instruments of
subsidiaries 132 520 - -
Movement on minorities on disposals
and acquisitions - (8 125) (32 931)
Balance at the end of the period 1 389 049 882 941 1 065 412
Consolidated cash flow statements
£'000 6 months to 30
Sept 6 months to Year to 31
2005 30 Sept March 2005
2004
Cash inflows from operations 149 274 128 703 234 204
Increase in operating assets (1 015 495) (1 417 645) (3 228 141)
Increase in operating liabilities 398 799 1 165 468 2 909 285
Net cash outflow from operating
activities (467 422) (123 474) (84 652)
Net cash outflow from investing
activities (7 867) (14 439) (183 269)
Net cash inflow/(outflow) from
financing activities 92 144 (42 123) 129 478
Effects of exchange rate changes
on cash and cash equivalents 39 770 2 994 5 899
Net decrease in cash and cash
equivalents (343 375) (177 042) (132 544)
Cash and cash equivalents at the
beginning of the period 1 382 556 1 515 100 1 515 100
Cash and cash equivalents at the
end of the period 1 039 181 1 338 058 1 382 556
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).
Segmental analysis - geographical and business analysis of operating profit
before goodwill impairment and non-operating items and taxation
For the six months to 30 September 2005
£'000 Southern United Australia Other Total
Africa Kingdom geographies group
and Europe
Private Client Activities 16 244 28 629 5 183 - 50 056
Treasury and Specialised
Finance 21 399 7 501 (239) - 28 661
Investment Banking 23 525 15 787 2 777 - 42 089
Asset Management 18 325 3 484 - - 21 809
Property Activities 6 530 675 - - 7 205
Group Services and Other
Activities 11 393 (9 709) 814 453 2 951
97 416 46 367 8 535 453 152 771
For the six months to 30 September 2004
£'000 Southern United Australia Other Total
Africa Kingdom geographies group
and Europe
Private Client Activities 13 308 22 427 1 466 1 753 38 954
Treasury and Specialised
Finance 15 133 6 159 442 (343) 21 391
Investment Banking 11 712 3 709 1 544 1 840 18 805
Asset Management 12 074 1 693 - 152 13 919
Property Activities 2 467 4 162 - - 6 629
Group Services and Other
Activities 6 943 (11 708) 1 628 20 (3 117)
61 637 26 442 5 080 3 422 96 581
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 under IFRS
in Pounds Sterling.
Alternatively for further information please contact the Investor Relations
division on e-mail investorrelations@investec.com or telephone +44 20 7597 5546
/ +27 11 286 7070.
This information is provided by RNS
The company news service from the London Stock Exchange
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