May 17, 2018 / 7:55 AM / 4 months ago

Investec sees steady earnings growth as it prepares for changing of the guard

JOHANNESBURG (Reuters) - Anglo-South African investment bank and asset manager Investec Plc (INVP.L) (INLJ.J) reported an increase in operating profit on Thursday, with funds managed by its asset management business topping 100 billion British pounds for the first time.

The 5.6 percent rise in operating profit for the year ended in March indicates stability as Investec heads for a changing of the guard this year with co-founder Stephen Koseff set to step down as CEO in October and two other founding members of the business - Bernard Kantor and Glynn Burger - also due to retire.

Analysts do not expect any big strategy shift for the group, which reported ongoing operating profit of 701 million pounds for the full-year ended March 31, up from 663.7 million pounds a year earlier.

“Operating performance during the year was underpinned by sound growth in loans and funds under management and a solid recurring income base, despite a challenging backdrop in South Africa and the UK,” Koseff said in a statement.

Adjusted earnings per share before goodwill, acquired intangibles and non-operating items jumped 13.3 percent to 61.3 pence, the company said in a statement.

The board proposed a final dividend of 13.5 pence per ordinary share, equating to a full year dividend of 24 pence, up from 23 pence last year.

Uncertainty about the terms of Britain’s departure from the European Union and political uncertainty in South Africa continued to affect corporate and consumer confidence in those two markets during the period under review, Investec said.

The group’s wealth & investment and asset management businesses generated substantial net inflows taking fund management’s assets under management above 100 billion pounds, Koseff said.

Shares in Johannesburg-listed Investec were up 1 percent at 95.99 rand by 0704 GMT, while in London the group’s shares were flat.

Chairman Fani Titi and Hendrik du Toit - head of Investec’s asset management business - have been picked as the group’s new joint chief executives and will formally take charge in October.

Reporting by Nqobile Dludla; Editing by Susan Fenton

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