Investec Says Rand Weakness Will Hurt Annual EarningsRenee Bonorchis
Investec Plc, the owner of a bank and money manager in South Africa and the U.K., expects a slight increase in earnings for the fiscal full-year through March.
“Operating profit is expected to be marginally ahead of the prior year” in pound terms, the Johannesburg- and London-based company said in a statement today. The figure in rand terms will be about about 28 percent higher as a result of the South African currency weakening by some 20 percent against the pound, it said.
Investec, which also has assets it’s trying to sell in Australia, makes the bulk of its operating profit in South Africa. The rand has slumped more than 14 percent against the dollar and 22 percent against the pound in the past 12 months, making it the second-worst performer of 16 major currencies tracked by Bloomberg after Brazil’s real.
The company’s stock rose 0.3 percent to 447.60 pence in London, bringing this year’s gain to 2.3% percent, compared with the 9.3 percent decline in the six-member FTSE 350 Banks Index.