17th Nov 2005 07:00
Investec PLC17 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 goodwillof £4.3 million) Stephen Koseff, Chief Executive Officer of Investec, said:"These results reflect strong performances across the board and demonstrate thestrides we have taken over the last few years to refocus and build a sustainableearnings base. The scale we have built in many of our businesses and strongfocus on client delivery has enabled us to take advantage of more favourablemarket conditions." Bernard Kantor, Managing Director of Investec, said:"The growth achieved in the first half illustrates the progress we have made onbuilding a distinctive franchise across South Africa, Australia and the UK. Allof our businesses continue to perform well and we remain confident on theoutlook for the remainder of the financial year." For further information please contact: Investec +27 (0)11 286 7070 Citigate Dewe RogersonStephen Koseff, Chief Executive Officer +44(0)20 7638 9571Bernard Kantor, Managing Director Jonathan ClareUrsula Munitich, Investor Relations Simon Rigby(+27 (0) 82 552 98808) Sara Batchelor The management of Investec will host a presentation commencing at 09:00 (UKtime) / 11:00 (SA time) from their office in Johannesburg, and via video linkupto their office at 2 Gresham Street, London EC2V 7QP. Details of the conferencecall facilities and a delayed webcast of the presentation are available atwww.investec.com. About Investec Investec is an international specialist banking group that provides a diverserange of financial products and services to a niche client base in three principal markets, the United Kingdom, South Africa and Australia as well as certainother countries. The group was established in 1974 and currently hasapproximately 4 100 employees. Investec focuses on delivering distinctive profitable solutions for its clientsin five core areas of activity namely, Private Client Activities, Treasury andSpecialised Finance, Investment Banking, Asset Management and PropertyActivities. In July 2002 the Investec group implemented a dual listed company structure withlistings on the London and Johannesburg Stock Exchanges. Management and staffown approximately 16% of the equity share capital of the group. The combinedgroup'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 September2005 prepared using International Financial Reporting Standards and expressed inPounds Sterling Commentary----------The financial information contained in this commentary is prepared in accordancewith International Financial Reporting Standards (IFRS). Rand values included inthis section are translated into Pounds Sterling - in the case of the incomestatement at the weighted average rate for the relevant period, and in the caseof the balance sheets at the relevant closing rate. The average Rand/PoundsSterling exchange rates were 11.76 and 11.74 for the six months ended 30September 2005 and 30 September 2004, respectively. Unless the context indicates otherwise, all comparatives relate to the pro-formaresults (as explained in the "Accounting policies and disclosures" sectionbelow) for the six months ended 30 September 2004. A number of significantcorporate actions have been undertaken during the period which have a bearing onour performance and these have been highlighted in the "Presentation offinancial 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-operatingitems increased by 40.4% to 85.2 pence from 60.7 pence. We have benefited from astrong performance from all our businesses, supported by favourable economicconditions, 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 ClientPortfolio Management and Stockbroking divisions, reported strong growth inoperating 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 andnon-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 acrossthe majority of the division's areas of activities. Since 1 April 2005, theprivate client lending book has grown by 18.2% to £5.1 billion and the divisionincreased 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 itemsof £7.7 million (2004: £6.0 million), an increase of 28.3%. The Private Clientbusiness in South Africa has benefited from positive equity market conditionsand the acquisition of HSBC's Private Client business in South Africa. Since 1April 2005, total funds under management have increased by 72.3% to £6.2billion. The results of the UK operations include our 47.7% associateshareholding in Rensburg Sheppards plc's post tax earnings. Treasury and Specialised Finance The Treasury and Specialised Finance division posted operating profit beforegoodwill impairment and non-operating items of £28.7 million (2004: £21.4million), an increase of 34.0%. Growth was underpinned by a solid performancefrom the division's advisory, structuring, asset creation and distributionactivities 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 inoperating profit before goodwill impairment and non-operating items from £18.8million to £42.1 million. The Institutional Stockbroking operations continued toperform well against a backdrop of favourable equity markets and the CorporateFinance operations benefited from a sound deal pipeline across all geographies.The Direct Investments and Private Equity divisions continued to performstrongly across the board reflecting our increasing presence in this activity. Asset Management The Asset Management division delivered substantial growth in operating profitbefore goodwill impairment and non-operating items of 56.7% to £21.8 million(2004: £13.9 million). The division was boosted by favourable market conditionsand 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 durableplatform 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 theProperty Activities division increased by 8.7% to £7.2 million (2004: £6.6million). The division in South Africa posted solid results driven by anincrease in funds under management and principal transactions given thefavourable property market conditions. These results were partially offset by aweaker performance in the UK. Group Services and Other Activities Group Services and Other Activities earned an operating profit before goodwillimpairment and non-operating items of £3.0 million compared to the prior periodloss of £3.1 million. The Central Funding division benefited from a solidperformance of its portfolio of assets and increased cash holdings arising outof the number of corporate actions undertaken as highlighted below. Theseresults were partially offset by a decrease in earnings from AssuranceActivities and associates following the disposal of these activities in theprior 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) asa result of a strong growth in core loans and advances of 23.3% to £7.9 billionsince 1 April 2005 and increased cash holdings within the Central Fundingdivision. The growth in net fees and commissions of 5.2% to £190.0 million (2004: £180.5million) is impacted by the sale of Carr Sheppards Crosthwaite to Rensburg plc.Excluding the consolidated income earned from Carr Sheppards Crosthwaite in bothperiods results in an increase of 17.2% to £186.5 million. This result wassupported by favourable market and economic conditions and increasedtransactional 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 theunderlying assets within the Direct Investments, Private Equity, Property andCentral Funding portfolios and an improved performance from our market makingactivities. Operating income from associates decreased by 58.7% to £2.9 million (2004: £7.1million). The current period figures include Investec's 47.7% share of thereported operating earnings of Rensburg Sheppards plc for the period 6 May 2005to 30 September 2005. In the prior period our most significant associateinvestment was Capital Alliance Holdings Limited. The decline in net income from assurance activities is as a result of thereinsurance 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, whichrepresents the residual earnings from the businesses that were retained. Other operating income of £3.9 million (2004: £3.6 million) principallyrepresents 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 priorperiod. The percentage of gross non-performing loans (NPLs) to core loans and advancesdecreased from 0.9% to 0.7%. Total impairment coverage remains highlysatisfactory both as a percentage of gross NPLs and net NPLs (gross NPLs net ofsecurity), at 69.6% and 150.0% respectively. Administrative expenses Total administrative expenses increased by 12.0% to £252.8 million (2004: £225.7million), and by 21.6% if the costs of Carr Sheppards Crosthwaite are excludedin both periods. Variable remuneration increased by 37.4% to £60.1 million dueto increased profitability. Other operating expenses increased by 5.9% to £192.7million largely as a result of an increase in headcount in certain of thebusinesses in line with our growth initiatives and the introduction of along-term incentive plan for a group of senior employees in June 2005. We achieved our target of operating expenses to total operating income of lessthan 65% as the ratio decreased from 68.7% to 61.9%, principally as a result ofthe strong growth in operating income of 23.6%. Goodwill impairment The charge for goodwill impairment increased from negative £4.3 million to £6.6million. The current charge largely relates to impairment of goodwillattributable to property management contracts with respect to a portfolio ofproperties sold. The prior period included an amount of £5 million relating tonegative 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 andsubordinated liabilities) increased by 21.2% to £1.9 billion largely as a resultof the issue of €200 million (£132 million) preferred securities by a subsidiaryof Investec plc in June 2005, the gain on the sale of Carr Sheppards Crosthwaiteand increased operating earnings. The annualised return on adjusted shareholders' equity (inclusive ofcompulsorily convertible instruments) increased from 18.7% to 22.1%, exceedingour target of 20%. Investec plc and Investec Limited are well capitalised with capital adequacyratios comfortably exceeding the minimum regulatory requirements. The capitaladequacy of Investec plc (applying UK Financial Services Authority rules to itscapital base) is 18.7% (March 2005: 15.5%). The capital adequacy of InvestecLimited (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 offunds. On balance sheet assets grew by 1.2% from £19.9 billion to £20.2 billionwith strong growth in core advances offset by a decline in reverse repurchaseagreements and cash collateral on securities borrowed. Outlook-------Within the context of a competitive operating environment, we have continued toenhance the quality and sustainability of our earnings. We firmly believe thatour niche focus, our ability to be distinctive and the capability of our peoplewill enable us to take advantage of favourable market conditions and the boardremains 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 KantorChairman Chief Executive Officer Managing Director Presentation of financial information-------------------------------------Investec operates under a Dual Listed Companies (DLC) structure with primarylistings of Investec plc on the London Stock Exchange and Investec Limited onthe JSE Limited. In terms of the contracts constituting the DLC structure, Investec plc andInvestec Limited effectively form a single economic enterprise in which theeconomic and voting rights of ordinary shareholders of the companies aremaintained in equilibrium relative to each other. The directors of the twocompanies consider that for financial reporting purposes, the fairestpresentation is achieved by consolidating the results and financial position ofboth companies. Accordingly, the interim results for Investec plc present the results andfinancial position of the combined DLC group under IFRS, denominated in PoundsSterling. In the commentary above, all references to Investec or the grouprelate to the combined DLC group comprising Investec plc and Investec Limited. The following significant corporate actions have been undertaken during theperiod 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 withIFRS. Previously these were prepared in accordance with UK Generally AcceptedAccounting Practice (UK GAAP). The first full year IFRS compliant financialstatements that will be prepared by us will be for the year ending 31 March2006. Our transition to IFRS has been performed in accordance with IFRS 1 "First-TimeAdoption of International Reporting Standards" and other relevant standardsexpected 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 therequirements of IAS 32, "Financial Instruments: Disclosure and Recognition", IAS39, "Financial Instruments: Recognition and Measurement" and IFRS 4, "InsuranceContracts" to the comparative period. The impact of adoption of these standardsis reflected as an adjustment to the opening balance sheet at 1 April 2005. Tofacilitate comparability, a pro-forma income statement is presented whichincorporates the impact of the adoption of IAS 32 and IAS39 in the followingrespects: • 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 transitionto IFRS report detailing the impact of IFRS on our previously reported UK GAAPconsolidated results. This information can be found on our website atwww.investec.com Future developments under IFRS The financial information contained in this announcement has been prepared onthe group's expectation of standards that will be applicable at 31 March 2006(being the first time that the group will prepare annual financial statementsunder IFRS). Changes to information presented in this report may be required dueto 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 SouthAfrican resident shareholders may receive all or part of their dividendentitlements through dividends declared and paid by Investec plc on theirordinary shares and/or through dividends declared and paid on the SA DAN shareissued by Investec Limited. Investec plc shareholders who are South African residents, may receive all orpart of their dividend entitlements through dividends declared and paid byInvestec plc on their ordinary shares and/or through dividends declared and paidon the SA DAS share issued by Investec Limited. Notice is hereby given that an interim dividend (No. 7) has been declared by theboard in respect of the six months ended 30 September 2005. Shareholders inInvestec plc will receive a total distribution of 38 pence (2004: 30 pence) perordinary 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 bedematerialised or rematerialised between Friday, 9 December 2005 and Thursday,15 December 2005, both dates inclusive, nor may transfers between the UK and SAregisters take place between Friday, 9 December 2005 and Thursday, 15 December2005,both dates inclusive. Shareholders registered on the South African register are advised that the totaldistribution of 38 pence, equivalent to 446 cents per share, has been arrived atusing the Rand/Pounds Sterling average buy/sell forward rate, as determined at11h00 (SA time) on 16 November 2005. By order of the boardR VardyCompany Secretary 17 November 2005 Investec plc (incorporating the results of Investec Limited)Unaudited consolidated financial results for the six months to 30 September 2005prepared using International Financial Reporting Standards expressed in PoundsSterling Salient Features 30 Sept % Pro forma Pro forma 2005 Change 30 Sept 31 March 2004 2005Adjusted earnings before goodwill impairment and non-operating items(£'000) 93 357 37.4 67 952 149 510Operating profit before goodwill impairment and non-operating itemsand taxation (£'000) 152 771 58.2 96 581 224 124Earnings attributable to shareholders (£'000) 177 469 188.8 61 443 110 888Adjusted earnings per share (before goodwill impairment andnon-operating items) (pence) 85.2 40.4 60.7 134.6Earnings per share (pence) 155.6 214.3 49.5 89.2Dividends 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 765Interest payable (295 613) (288 396) (587 945) (288 396) (587 945)Net interest income 114 946 79 644 170 568 68 921 146 820Fees and commissions receivable 208 857 191 052 403 543 207 357 439 958Fees and commissions payable (18 902) (10 515) (25 818) (10 515) (25 818)Principal transactions 93 592 52 019 140 158 49 619 135 358Operating income from associates 2 949 7 138 14 474 7 138 14 474Investment income on assurance activities 76 387 134 390 258 855 134 390 258 855Premiums and reinsurance recoveries on insurance contracts 72 486 118 147 246 537 118 147 246 537Other operating income 3 851 3 649 6 120 3 649 6 120Other income 439 220 495 880 1 043 869 509 785 1 075 484Claims 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 410Impairment 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 614Administrative 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 040Impairment of goodwill (6 595) 4 308 (37 010) 4 308 (37 010)Operating profit 146 176 100 889 187 114 99 130 183 030Profit/(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 401Taxation (40 323) (21 662) (59 226) (22 058) (60 463)Profit after taxation 181 513 62 735 113 259 60 580 107 938Earnings attributable to minority interests 4 044 1 292 2 371 1 292 2 371Earnings attributable to shareholders 177 469 61 443 110 888 59 288 105 567Earnings 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 567Impairment of goodwill 6 595 (4 308) 37 010 (4 308) 37 010(Profit)/loss on disposal or termination of groupoperations (75 660) 16 492 14 629 16 492 14 629Preference dividends (6 917) (5 986) (11 742) (5 986) (11 742)Additional earnings attributable to preferenceshareholders (8 130) 311 (1 275) 311 (1 275)Adjusted earnings (beforegoodwill 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 averageshares- basic ('000) 109.62 111.92 111.09 111.92 111.09 **Per the Transition to IFRS Report (issued on 21 September 2005) the adjustmenton adoption of IAS 32 and IAS 39 increased reserves of £17.6m This increase hasbeen adjusted downward by £4.5m (after taxation effects) to £13.1 million as aresult of interpretation and model enhancements relating to the recognition ofcertain fee income as a component of the effective yield of a lendingtransactions. These adjustments relate only to private banking activities.Similarly, adjusted EPS for the year ended 31 March 2005 has been reviseddownwards to 134.6 pence. Consolidated balance sheets at £'000 1 April 30 Sept 30 Sept 2005 31 March 2004 2005 2005AssetsCash and balances at centralbanks 125 343 105 130 105 130 217 460Treasury bills and other eligiblebills 323 622 277 583Loans and advances to banks 1 368 108 1 563 066 3 017 326 2 751 353Reverse repurchase agreements andcash collateral on securities borrowed 682 354 2 318 745Trading securities 1 308 753 1 279 111Derivative financial instruments 868 549 936 097Cash equivalent advances tocustomers 683 731 710 721Investment securities 1 220 405 1 188 405Loans and advances to customers 7 903 166 6 408 368 7 402 460 6 544 234Other assets 1 091 037 883 555 1 346 017 1 402 377Debt securities 2 001 682 1 813 798Equity shares 531 262 355 512Interests in associatedundertakings 58 545 13 219 13 219 81 918Deferred taxation assets 48 097 51 498 49 023 46 899Property, plant and equipment 231 812 233 867 233 867 219 720Goodwill 190 257 199 313 199 313 248 202Intangible assets 6 474 4 587 4 587 - 15 786 631 15 895 682 15 227 508 13 959 056Other financial instruments atfair value throughprofit and loss-in respect of liabilities tocustomers under insurance and investment contracts 3 071 676 2 815 137-assets related to reinsurancecontracts 1 302 165 1 209 165Long-term assurance assetsattributable to policyholders 2 815 137 2 689 767 20,160,472 19,919,984 18,042,645 16,648,823 LiabilitiesDeposits by banks 1 282 297 780 829 912 526 886 583Derivative financial instruments 617 201 838 578Other trading liabilities 408 279 1 892 732Repurchase agreements and cashcollateral on securities lent 83 117 508 301Customer accounts 7 583 753 6 458 714 6 805 429 7 233 545Debt securities in issue 2 296 949 1 926 889 1 925 124 1 165 994Other liabilities 1 482 760 1 809 403 3 700 989 3 012 160Current taxation liabilities 85 155 72 834 72 834 58 940Deferred taxation liabilities 22 352 20 784 7 445 9 973Accruals and deferred income 226 763 191 299Pension fund liability 9 141 10 991 10 991 17 295 13 871 004 14 320 055 13 662 101 12 575 789Liabilities to customers underinvestment contracts 2 939 994 2 664 434Insurance liabilities, includingunit-linked liabilities 131 682 145 136Reinsured liabilities 1 302 165 1 209 165Long-term assurance liabilitiesattributable to policyholders 2 815 137 2 689 767 18 244 845 18 338 790 16 477 238 15 265 556Subordinated liabilities(including convertible debt) 526 578 502 675 499 995 500 326 18 771 423 18 841 465 16 977 233 15 765 882EquityCalled up share capital 165 165 165 165Share premium account 1 029 120 1 029 242 1 029 242 1 027 539Treasury shares (99 753) (109 362) (99 873) (83 907)Equity portion of convertibleinstruments 2 191 2 191 2 191 2 384Perpetual preference shares 205 587 196 742 323 800 127 622Other reserves 117 101 78 054 39 617 50 291Profit and loss account (155 184) (263 622) (248 975) (284 123)Shareholders' equity excludingminority interests 1 099 227 933 410 1 046 167 839 971Minority interests 289 822 145 109 19 245 42 970Total shareholders' equity 1 389 049 1 078 519 1 065 412 882 941 Total liabilities andshareholders' 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 2005Balance at the beginning of theperiod 1 078 519 869 123 869 123 As previously reported 967 256 766 373 766 373Changes in accounting policiesarising from adoption of IFRS-Minority interests included withinreconciliation 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 sheetdate 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 172Restated 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 attributableto ordinary shareholders 177 469 59 288 105 567Earnings for the period attributableto minority interests 4 044 1 292 2 371Share based payments adjustments 9 403 4 565 8 849Fair value movements on available for sale assets (5 245) - -Dividends paid to ordinaryshareholders (41 681) (30 213) (55 394)Dividends paid to minorityshareholders (6 917) (5 986) (11 742)Issue of perpetual preference shares - - 207 313Share issue expenses (556) - (838)Re-issue of treasury shares 10 043 443 2 146Purchase of treasury shares - - (16 159)Release of pension fund deficit - - 2 370Issue 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 2004Cash inflows from operations 149 274 128 703 234 204Increase in operating assets (1 015 495) (1 417 645) (3 228 141)Increase in operating liabilities 398 799 1 165 468 2 909 285Net 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 centralbanks, on demand loans and advances to banks and cash equivalent advances tocustomers (all of which have a maturity profile of less than three months). Segmental analysis - geographical and business analysis of operating profitbefore 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 EuropePrivate Client Activities 16 244 28 629 5 183 - 50 056Treasury and Specialised Finance 21 399 7 501 (239) - 28 661Investment Banking 23 525 15 787 2 777 - 42 089Asset Management 18 325 3 484 - - 21 809Property Activities 6 530 675 - - 7 205Group 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 EuropePrivate Client Activities 13 308 22 427 1 466 1 753 38 954Treasury and Specialised Finance 15 133 6 159 442 (343) 21 391Investment Banking 11 712 3 709 1 544 1 840 18 805Asset Management 12 074 1 693 - 152 13 919Property Activities 2 467 4 162 - - 6 629Group 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 Relationsdivision on e-mail [email protected] or telephone +44 20 7597 5546/ +27 11 286 7070. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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