20th Sep 2019 09:27
(Alliance News) - Banking and asset management group Investec PLC on Friday said that first-half adjusted operating profit will be slightly behind the prior-year period due to challenging market conditions, persistent uncertainty relating to Brexit, and depreciation of the South African rand against sterling.
The dual-listed company forecasts adjusted earnings per share for the six months to September 30 to be 4% to 7% lower year-on-year. Headline earnings per share for the first half are expected to be 15% to 18% behind the prior period.
On a divisional basis, the company's banking and wealth management businesses are expected to report year-on-year falls in adjusted operating profit, while the asset management business is expected to report a rise in adjusted operating profit.
Investec also expects first half revenue and costs to be slightly lower than a year before.
Investec said the proposed demerger and separate listing of its asset management business remains on track. The demerger and separate listing of Investec Asset Management received regulatory approval in August.
At August 31, assets under management stood at GBP177.65 billion, up 6.7% from GBP166.54 billion as at March 31.
Investec expects costs related to the asset management demerger, along with other restructuring measures, to dent first-half earnings by GBP42.2 million. This compares to a earnings drag of GBP21.5 million in the prior period.
"In spite of challenging trading conditions, the group remains well positioned for the long term and continues to concentrate on the execution of its strategy of simplification, focus and disciplined growth," the company said.
The company is slated to release its full interim results on November 21.
Investec shares in London were down 5.2% lower at 463.90 pence each. Johannesburg listed shares were down 4.1% at ZAR87.91.
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