Our opinion on the current state of INVLTD(INL)

5月24日

Investec (INL) does specialist banking and asset management in South Africa, Australia, Europe, the UK, and a few other countries. Brexit in the UK has put pressure on Investec shares over the past four years. The decision to separately list its asset management division in the form of Ninety-One has unlocked shareholder value, which is becoming more apparent now that the pandemic is coming under control. The new listing's major challenge has been to convince investors that it is not a South African play but has international asset management capability.

The company is going after clients with an annual income of at least GBP300,000 a year and assets of at least GBP3 million. So far, they have about 6,000 clients but plan to increase this to 9,000. The company distributed 15% of its shares in Ninety-One and retained 10%.

In its results for the year to 31st March 2024, the company reported adjusted earnings per share (EPS) up 13.4% and revenue of GBP2.09 billion, up from GBP1.99 billion. Assets under management (AUM) increased 5.5% to GBP20.9 billion, and the company bought back R6.8 billion worth of its own shares in the market. Technically, the shares are in a strong upward trend, which we expect to continue. Trading at a P:E of 7.62 and a dividend yield (DY) of 5.10%, we believe that this share is undervalued among blue chip companies trading on the JSE and that it will continue to perform well.