Investec Share Discussion Threads

[mo123] 27/9/2021 15:48

US Treasury and UK gilt yields rising quite nicely today.

As an aside, was looking at the historical Average PE of INVP, which came in around 11 and the growth rate then was nowhere near this years mgmt forecast.
OK times change and growth has been the preferred investment arena, but rates could easily start rising next year.
If the forward PE were to reach 9, the shares would be around the 370 mark. Assuming that mgmt's stated momentum reaches its target of over 41EPS.

[mo123] 23/9/2021 08:58

CE Fani Titi: “The changes made to simplify and focus the group are bearing fruit, positioning the group well for the future. As covid restrictions ease, we look forward to growth alongside our clients and increased face to face engagement.”

Cautious outlook in the UK but no signs of stress due to rise in inflation and end of furlough.
To pay div's towards the higher range. (Probably means 18p now, giving a 6% yield?)
Move to realise some assets to accumulate capital.
Comfortable with risk profie associated with the mortgage book.


Very short summing up by FT:

Pleased with the performance from all parts of the business with costs contained. Much more detail in November.

[aleman] 23/9/2021 08:12

Momentum is still there. The shares have consolidated a bit. Should move a little higher, with a little luck.

[boozey] 23/9/2021 08:08

Excellent results - a strong hold. Still well below pre-pandemic levels on share price.

[mo123] 23/9/2021 08:02

Good to see that costs associated with its UK structured products book are now immaterial.

This is the bit I like:

Based on current business momentum, for FY2022, the group expects to report adjusted earnings per share above the upper end of the 36p to 41p range guided in May 2021.

So they are obviously improving ROE up towards that 12-16% range.

[saltaire111] 23/9/2021 07:56

Great performance.

[skinny] 23/9/2021 07:03

.




Investec today announces its scheduled pre-close trading update for the interim period ending 30 September 2021 (1H2022). An investor conference call will be held today at 09:00 UK time /10:00 South African time. Please register for the call at www.investec.com/investorrelations .

Commentary on the group's financial performance in this pre-close trading update represents the five months ended 31 August 2021 and compares forecast 1H2022 to 1H2021 (30 September 2020).

1H2022 earnings guidance

For the six months ending 30 September 2021, the group expects:

-- Adjusted operating profit before tax between GBP265 million and GBP293 million (or 86% to 106% ahead of 1H2021) (1H2021: GBP142.5 million).

o The Southern African business' adjusted operating profit at least 50% ahead in Rands for the period (1H2021: R2 184 million, GBP99.1 million).

o The UK business' adjusted operating profit at least 125% higher than the prior period (1H2021: GBP43.4 million).

-- Adjusted earnings per share between 21.5p and 24p (or 92% to 114% ahead of 1H2021) (1H2021: 11.2p),

-- Basic earnings per share between 20.2p and 22.7p (or 110% to 136% ahead of 1H2021) (1H2021: 9.6p), and

-- Headline earnings per share between 20.2p and 22.7p (or 120% to 147% ahead of 1H2021) (1H2021: 9.2p).

31 March 2022 (FY2022) earnings range

Based on current business momentum, for FY2022, the group expects to report adjusted earnings per share above the upper end of the 36p to 41p range guided in May 2021.

Group overview

Performance for the five months ended 31 August 2021 was characterised by good growth in revenue and lower impairments.

-- Revenue was positively impacted by increased client activity across the business and lower funding costs. Risk management and risk reduction costs associated with the UK structured products book were immaterial.

-- ECL charges were lower, aided by limited specific impairments and certain recoveries. The group has retained COVID-19 related overlays to account for the uncertainty that remains in the economic environment.

-- Operating costs have increased in line with activity and revenue levels; however, efficiency ratios have improved as revenue increased ahead of costs.

-- The average Rand/Pounds Sterling exchange rate appreciated by c.9% over the period.
The group's trading performance was substantially ahead of the comparative period ended 31 August 2020 and in line with the pre-COVID comparative period ended 31 August 2019. This recovery in performance underscores the resilience of our client franchises.

The group is well capitalised and has strong liquidity, above Board approved minimums. The business continues to focus on its commitment to clients, offering them an "Out of the Ordinary" service and innovative solutions.

The changes made to simplify and focus the group are bearing fruit, positioning the group well for the future.

Divisional review

The Wealth & Investment business grew funds under management (FUM) by 9.9% to GBP63.8 billion at 31 August 2021 (31 March 2021: GBP58 billion) supported by net inflows of GBP1.4 billion, favourable market movements and investment performance. Operating margin was higher in the UK, while flat in SA.

-- In the Southern African business, FUM increased by 9.5% to R364.5 billion (31 March 2021: R333 billion), with net inflows of R16.7 billion.

Adjusted operating profit for 1H2022 is expected to be ahead of the prior period in Rands (1H2021: R264 million, GBP12.0 million).

-- In the UK business, FUM increased by 9.0% to GBP45.4 billion (31 March 2021: GBP41.7 billion) with net inflows of GBP0.6 billion.

Adjusted operating profit for 1H2022 is expected to be ahead of 1H2021 (1H2021: GBP28.9 million).

Within Specialist Banking , core loans grew by 6.5% to GBP28.2 billion at 31 August 2021 (31 March 2021: GBP26.4 billion) given increased activity levels and good client acquisition within private banking across both geographies. The UK experienced increased demand for corporate credit across a number of portfolios while SA corporate credit demand remained largely muted.

Net interest income (NII) benefitted from higher average lending books and lower cost of funding as liabilities repriced. Higher point of sale activity, lending turnover, and client flow trading volumes underpinned the growth in non-interest revenue (NIR) over the period. Impairments were lower due to limited specific impairments and continued recoveries over the period. Cost to income ratios improved as revenue grew ahead of costs.

-- In the Southern African business, core loans increased by 1.8% to R292.5 billion (31 March 2021: R287.3 billion).

Adjusted operating profit for 1H2022 is expected to be higher in Rands for the period (1H2021: R2 049 million, GBP92.9 million).

-- In the UK business, core loans grew by 9.2% to GBP13.5 billion (31 March 2021: GBP12.3 billion).

Adjusted operating profit for 1H2022 is expected to be ahead of 1H2021 (1H2021: GBP12.9 million).

Adjusted operating profit from Group Investments is expected to be ahead of 1H2021 (1H2021: GBP13.2 million) as investee companies' profitability recovered given the improving economic environment.

Group costs are expected to be lower than the prior period (1H2021: GBP17.3 million).

more......

[boozey] 22/9/2021 15:39

Thanks for that Skinny - and good momentum ahead of tomorrow.

[boozey] 22/9/2021 09:06

It is certainly imminent based on their historical financial calendar. Fingers crossed.

[mo123] 21/9/2021 13:36

LSE has Thursday 23rd for a trading update.
Also appears here

[boozey] 20/9/2021 06:37

hxxps://www.thetimes.co.uk/article/digital-bank-accounts-are-target-for-new-partnership-between-investec-and-monese-2m392hskt

[boozey] 31/8/2021 18:30

Mo I actually bought Investec as a recovery rather than income stock as it was much slower to recover from the pandemic compared to other asset managers - probably because of the South African connection. And that very much remains the case today. Investec is a low risk investment with good dividend yield and a likely 33% upside minimum to be had in the next 12 months from capital growth. As a FTSE 250 company if you are looking of an income play with great risk reward profile there can be no better investment right now than Investec.

[mo123] 31/8/2021 14:50

Hi Boozey.

I see from TF that stockopedia now have the div for 2021/22 at over 18p, up from the 16p that I thought would be paid. Need to wait and see, however.

[boozey] 31/8/2021 09:42

Thanks for your further thoughts Mo - and yes I noticed N91 too.

Back over £3.00 but still more than 30% discount to NAV

[mo123] 28/8/2021 15:03

Decent speech from Fed yesterdy.
Dollar falling and commodities up helping the rand.

Just need Ramaphosa to quickly implement all those infrastructure projects he keeps talking about to reduce unemployment.

Next month we should see the ROE figure improving when the update is due.
There may also be some increased writeoffs due to the riots but it shouldn't hold back their new strategic plan.

N91 adding value as well.

[10acious] 11/8/2021 11:28

Thanks for that.

[mo123] 11/8/2021 11:08

Nothing really new but an interesting read (or audio) if you are thinking of buying the shares. An NAV of around 425p helps.

[nemesis6] 10/8/2021 15:46

oh yes £225 found it

[nemesis6] 10/8/2021 14:58

Hi,

mmm not received yet how much is it if i hold a "piffling 3000"?

[boozey] 10/8/2021 14:04

Nice divi today - happy days!

[boozey] 05/8/2021 11:51

Good progress this week - and remember we are XD too.

[boozey] 30/7/2021 10:29

Mo yes, worth holding these for the duration, still some way to go to be back at pre-pandemic levels. Good risk/reward ratio even if the price may slip a little over the summer. Now ex-div. Good news about South South African vaccine production in 2022!

[mo123] 29/7/2021 09:13

Cheers Boozey. At the moment there appears to be a big inst. bot selling but the consensus from brokers has seen a small uptick in EPS for this year and next.

Some more good news. COVID-19 vaccine makers BioNTech and Pfizer said Wednesday they will produce their jab in South Africa from 2022.

Should see the reopening trade get into full swing some time next year.

[boozey] 27/7/2021 20:33

Great finds Mo as usual - keep posting and thanks.