Investec PLC and Ltd said on Friday that it continued to experience ‘solid’ performance in the first half of 2023, despite a challenging macroeconomic environment.

The Sandton, Johannesburg-based financial services firm expects adjusted operating profit to rise to a range of between £428.7 million and £449.6 million for the six months ending September 30, from £405.0 million a year earlier.

This growth in adjusted operating profit was driven by continued client acquisition, positive effects from higher global interest rates and year on year growth in average lending books.

For the first half, earnings per share is guided to a range of between 67.2 pence and 69.2p, up at least 33% from 50.6p, getting a lift from the net gain from the implementation of Investec’s UK Wealth & Investment combination with Rathbones Group PLC.

Rathbones said on Thursday said it completed an all-share combination with UK Wealth & Investment to create the ‘UK’s leading discretionary wealth manager’. Investec now owns 41% stake in Rathbones.

Investec Wealth & Investment includes Investec’s wealth and investment businesses in the UK and Channel Islands but excludes Investec Bank AG and Investec Wealth & Investment International (Pty) Ltd, both of which are Invetec subsidiaies.

Adjusted EPS for the first half is likely to rise to between 35.5p and 37.5p, from 32.9p.

Headline EPS is seen growing to a range of between 33.8p and 35.8p, from 32.0p. HEPS includes the cost of executing strategic actions.

As at August 31, the Wealth & Investment business funds under management increased by 1.3% to £61.3 billion.

The positive net inflows of £325 million from discretionary FUM reflected the uncertain economic backdrop, which is characterised by the cost of living crisis and higher interest rates.

Investec expects return on equity to be around mid-point of 12% to 16% target for the first six months, while cost-to-income ratio is likely to improve to be below 60%.

The company said it was making progress on realisation of remaining assets for Bud Group exit.

The financial services firm said optimising shareholder returns was its strategic priority.

Investec shares were u 1.6% at 479.40 pence each on Friday morning in London, and traded 1.5% higher at R 109.31 each in Johannesburg.

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