Investec Plc · LSE:INVP
Investec — Investor Presentation (September 2004)
35 slides from Investec's investor presentation, Sep 22, 2004
Slide 1: Investor Briefing
Investor Briefing Wednesday, 22nd September 2004
Slide 2: Proviso on reporting period
• Proviso: unless otherwise stated, figures and trends discussed in the operational review relate to the five month period to 31 August 2004 (i.e. 1H05) in relation to the six month period to 30 September 2003 (i.e.1H04)
Slide 3: Operating environment
Operating environment 31 Aug 2004 30 Sep 2003 % Move 31 Mar 2004 JSE ALSI 11 160.4 8 925.7 25.0% 10 692.6 FTSE All Share Index 2 214.2 2 027.7 9.2% 2 197.0 31 Aug 2004 30 Sep 2003 31 Mar 2004 Currency per £1.00 Close Ave Close Ave Close Ave South African Rand 11.98 11.72 11.93 12.25 11.67 12.02 US D
Slide 4: Divisional review
Divisional review we a ee
Slide 5: Private Banking
Private Banking Operating profit before tax and Loan portfolio amortisation of goodwill* £'mn 50 £'bn 40 3 30 2 20 1 10 0 0 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 Aug- 04 *Results are reflected for the year-ended 31 March. The group adopted a policy of allocating central costs to the oper
Slide 6: Private Banking
Private Banking • The Private Banking operations have performed exceptionally well driven by: – Solid loan book growth – Continued development of the retail treasury deposit book – High levels of transactional activity leading to strong growth in non-interest income
Slide 7: Private Client Stockbroking and Portfolio Management
Private Client Stockbroking and Portfolio Management Operating profit before tax and Funds under management amortisation of goodwill* £'mn £’bn 10 10 8 6 5 4 2 0 0 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 Aug- 04 Discretionary Non-discretionary *Results are reflected for the year-ended 31 M
Slide 8: Private Client Stockbroking and Portfolio Management
Private Client Stockbroking and Portfolio Management • Improved levels of activity will benefit performance • Third party assets under administration: – Down marginally in the UK • Loss of client taken over • A decline in non-discretionary funds due to extensive KYC exercise – Ç by 5% in SA since Ma
Slide 9: Investment Banking
Investment Banking Operating profit before tax and amortisation of goodwill* £’mn 60 50 40 Private Equity and 30 Direct Investments 20 Agency and 10 Advisory 0 -10 2000 2001 2002 2003 2004 * Results are reflected for the year-ended 31 March. The group adopted a policy of allocating central costs to
Slide 10: Investment Banking
Investment Banking Agency and Advisory • Strong growth in UK – Increased client base and market share – Participated in high performing IPOs and reputational momentum • Australia – Solid M&A market with moderate IPO market - strong pipeline • SA – Corporate Finance: current pipeline of deals remains
Slide 11: Treasury and Specialised Finance
Treasury and Specialised Finance Operating profit before tax and Loan portfolio amortisation of goodwill* £’mn £'mn 50 1000 40 30 500 20 10 0 0 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 Aug- -10 Trading Banking and Advisory 04 *Results are reflected for the year-ended 31 March. The group ado
Slide 12: Treasury and Specialised Finance
Treasury and Specialised Finance Trading Activities • Significant improvement in SA forex and interest rate activities negated by poor performance of the commodities desk in the UK Banking and Advisory Activities • Strong performance from Project Finance in the UK with continued growth in structured
Slide 13: Asset Management
Asset Management Operating profit before tax and Funds under management amortisation of goodwill* £'mn £’bn 25 25 20 20 15 15 10 10 5 5 0 0 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 Aug- Retail Institutional 04 *Results are reflected for the year-ended 31 March. The group adopted a policy of
Slide 14: Asset Management
Asset Management • Strong financial performance in SA with FUM Ç by 4.4% • Significantly improved financial performance in the UK with FUM Ç by 4.1% (net inflows of £232 million) notwithstanding two client losses as a consequence of UK equity team changes • Good investment performance across all cor
Slide 15: Property Activities
Property Activities Operating profit before tax and Assets under administration amortisation of goodwill* £'mn £'bn 10 1 5 0.5 0 0 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 Aug- 04 *Results are reflected for the year-ended 31 March. The group adopted a policy of allocating central costs to t
Slide 16: Property Activities
Property Activities • Very strong performance from the UK business • Reasonable performance from SA with FUM increasing marginally to R12.9 billion (Mar 04: R12.5 billion)
Slide 17: Other Activities
Other Activities • Assurance Activities: performance in line with that of last year • International Trade Finance: sound performance with macro economic environment remaining supportive of imports • Traded Endowments: closure of operations • Central Services: – Increased costs in the UK due to: • Un
Slide 18: Other Activities
Other Activities • Central Funding: – Performance in the UK impacted by: • Additional net cost of sub-debt • Last year benefited from bad debt recovery • FRS 17 pension financing costs – Significant improvement in SA as a consequence of lower rate environment and improved capital structure
Slide 19: Additional aspects
Additional aspects & Investec
Slide 20: Summary headcount by business
Summary headcount by business 31 Aug 31 Mar 30 Sept 2004 2004 2003 Private Banking 1 144 1 106 1 096 Private Client Stockbroking and Portfolio Management 452 463 477 Investment Banking 268 276 273 Treasury and Specialised Finance 492 477 494 Asset Management 748 784 785 Property Activities 211 215 1
Slide 21: Other information
Other information • Sale of Israel – Rationale: more effective use of capital base in line with group ROE target established – Due diligence almost completed – Will account for results to June 2004
Slide 22: Other information
Other information • Effective tax rate: expected to average 26% for all regions • Weighted number of shares in issue for six months ended 30 September 2004 expected to be approximately 107.2 million
Slide 23: Outlook
Outlook & Investec
Slide 24: Outlook – key growth drivers
Outlook – key growth drivers Loan portfolio Third party assets under administration £’mn £’bn 5000 30 4000 20 3000 2000 10 1000 0 0 1995 1997 1999 2001 2003 Aug 1995 1997 1999 2001 2003 Aug
Slide 25: Outlook
Outlook Key growth drivers UK Aus SA Third party assets under management ¸ ¸ ¸ Loans and advances ¸ ¸ ¸ Transactional activity ¸ ¸ µ Stock market activity ¸ ¸ µ General economic conditions ´ ´ µ
Slide 26: Appendix
Appendix & Investec
Slide 27: Private Banking
Private Banking • Loan portfolio: – UK:£1 131 million (Mar 04: £1 062 million) Ç6.5% – Australia:A$674 million (Mar 04: A$624 million) Ç8.0% – SA:R25.1 billion (Mar 04: R22.2 billion) Ç12.7% • Retail deposit base: – UK:£1.6 billion (Mar 04: £1.5 billion) Ç7.2% – Australia:A$379 million (Mar 04: A$38
Slide 28: Private Client Stockbroking and Portfolio Management
Private Client Stockbroking and Portfolio Management • Third party assets under administration: – UK: £5.5 billion (Mar 04: £5.9 billion) • Discretionary: £3.6 billion (Mar 04: £3.7 billion) • Non-discretionary: £1.9 billion (Mar 04: £2.2 billion) • YTD net inflows: £80 million – SA: R31.4 billion (
Slide 29: Asset Management UK and Other International Operations
Asset Management UK and Other International Operations • Strong momentum in fixed income (wins of £450 million) • Retail business continues to gain market share in tightening market Intermediary gross sales Intermediary net sales Jan-July 2004 2.9% 7.2% Jan-July 2003 2.5% 5.2% Jan-July 2003 (ex-Harg
Slide 30: Asset Management: Movement in funds under management
Asset Management Movement in funds under management Total Institutional Retail South Africa UK & Other £ million 31 Mar 2004 20 568 14 930 5 638 12 506 8 062 31 Aug 2004 21 111 15 252 5 859 12 721 8 390 R million 31 Mar 2004 239 980 174 195 65 785 145 950 94 030 31 Aug 2004 252 902 182 707 70 195 15
Slide 31: Asset Management Sales (Gross Flows)
Asset Management Sales (Gross Flows) For the 5 months to 31 August 2004 Clients £ million Products £ million Institutional 1,734* Fixed Interest & Cash 1,803 Retail 1,377 Equity 930 3,111 Balanced 378 3,111 Despite high turnover in the markets, the business continues to generate significant new flow
Slide 32: Asset Management - UK investment performance
Asset Management - UK investment performance Benchmark outperformance 6m 1yr 2yrs 3yrs 3yrs* UK Equity Conservative + + + + 2.4% UK Equity Aggressive - - - + 0.9% Global Equities - + + + 3.8% Balanced + + + + 1.5% UK Government Bonds + + + + 0.6% UK Corporate Bonds + + + + 0.2% Sterling Cash Plus +
Slide 33: Asset Management - SA investment performance
Asset Management - SA investment performance Continued excellent SA specialist performance with balanced moving back above median Quartile rank 1yr 2yrs 3yrs 5yrs 7yrs 10yrs Equity Fund 1 1 1 1 1 1* Growth Fund**+ 2 2 1* 1 2 1* Value Fund**+ 1* 1* 1* 1* 1* Opportunity Fund**+ 1 1 1 1* 1* Gilt Fund**
Slide 34: Summary headcount by geography
Summary headcount by geography 31 Aug 31 Mar 30 Sep 2004 2004 2003 SA and Other 2 650 2 627 2 636 UK and Europe 1 294 1 431 1 432 Australia 117 112 105 USA 74 75 68 Israel 216 213 219 Total number of employees 4 351 4 458 4 460
Slide 35: September 2003 - operating profit before tax and amortisation of goodwill
September 2003 - operating profit before tax and amortisation of goodwill* Segm ental geographic and business analysis of operating profit before taxation, exceptional item s and am ortisation of goodw ill Post allocation of central costs For the six m onths ended 30 Septem ber 2003 Southern UK Disc