Investec expects annual earnings to dip after prior Rathbones gain

(Alliance News) - Investec PLC and Ltd warned on Thursday it expects annual earnings to fall following a once-off gain linked to the Rathbones Group PLC deal a year before.

The Sandton, Johannesburg-based financial services firm expects basic earnings per share to have declined to between 67.2 pence and 73.5p for the financial year ending March 31 from 105.3p a year prior, representing a drop of between 30% and 36%.

Investec made the significant net gain after Rathbones in September 2023 completed an all-share combination with Investec Wealth & Investment Ltd, which had been a UK division of Investec. Investec owns around 41% of Rathbones.

Headline EPS is estimated at between 67.2p and 73.5p from 72.9p, while adjusted EPS is seen between 75.0p and 81.2p from 78.1p.

Investec projected adjusted operating pretax profit at between GBP888 million and GBP956 million from GBP884.5 million.

Pre-provision adjusted operating profit is expected between GBP1.01 billion and GBP1.07 billion from GBP963.6 million.

Investec said revenue growth was supported by continued client acquisition, strong net inflows in discretionary and annuity funds under management.

For the 11 months that ended February 28, core loans within specialist banking increased 4.7% annualised to GBP32.2 billion from GBP30.9 billion for the financial year that ended March 31, 2024.

Customer deposits for 11 months rose 4.8% annualised to GBP41.2 billion on reported basis.

Funds under management in Southern Africa grew by 15% to GBP24.0 billion as at February 28, 2025 from GBP20.9 billion at March 31, 2024.

Net discretionary and annuity inflows of ZAR14.7 billion over 11 months were partly offset by outflows of ZAR9.6 billion in non-discretionary FuM.

Investec expects to release its full-year financial results on May 22.

By Artwell Dlamini, Alliance News reporter

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