Investec announces tiny profit increase

Investec announces tiny profit increase

Investec announced a 1 per cent increase in full year profits against a "challenging backdrop".

The Anglo-South African investment group said profits had been hit by Brexit-related uncertainty, while it also made a £13m loss from its exposure to Steinhoff, a South African retailer where it had derivative exposure to the company’s tumbling share price.

Investec announced a 1.4 per cent increase in operating profit to £607.5m, from £599m the previous year but this was a decrease if currency appreciation was taken into account. The company said revenues were up 6.9 per cent to £2.4 billion.

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Stephen Koseff, chief executive of Investec said: "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."

The UK legacy portfolio of banking assets from before the financial crisis continued to be managed down and it reduced from £476m in March 2017 to £313m through asset sales, redemptions and write-offs.

The figures come as the London and Johannesburg-listed group shakes up its management team. In February, the company said Herik du Toit, the head of asset management, and chairman Fani Titi would take over as co-chief executives from October.

Bernard Kantor, managing director of Investec, said: "Over the last 40 years we have been building a platform that is capable of being leveraged for further growth. Investec is now a meaningful player across many business areas, both in the UK and South Africa, and we believe the platform is robust, relevant and well positioned for future value creation.

"We are confident that Hendrik du Toit and Fani Titi, as joint chief executives from October, will lead Investec to new successes for the benefit of shareholders and all our stakeholders."

The board proposed a final dividend of 13.5p per ordinary share equating to a full year dividend of 24p, similar to last year's dividend of 23.