Investec PLC and Ltd said on Friday it expects strong earnings for the first half of its financial year, despite volatile market conditions and prevailing uncertainty.

The Sandton-based financial services company forecasts a rise in basic earnings per share to between 46.5 pence and 51p for six months ending September 30, up from 25.0p in the prior year, boosted by the distribution of Ninety One PLC and Ltd shares.

Investec distributed a 15% holding in Ninety One to its shareholders in May.

Adjusted earnings per share is seen increasing to a range of between 30.0p and 33.0p, up from 26.3p.

Investec expects first-half headline earnings per share to improve to between 30.0p and 34.0p, up from 24.7p.

Adjusted operating profit before tax is likely to jump to between £372.6 million and £406.2 million, higher than £325.7 million.

In the UK, the group expects adjusted operating profit to be at least 20% up on £133.8 million, while adjusted operating profit in southern Africa is predicted to be at least 10% higher on R 3.83 billion.

Return on equity is projected to be within the 12% to 16% target range, compared to 11.2% in the first half last year.

The positive revenue trajectory experienced in the last financial year continued, the company said.

Net interest income benefited from higher average lending books and higher interest margin given rising interest rates, Investec said.

Non-interest revenue growth was underpinned by increased client activity, higher lending turnover and net positive contribution from investment income, it said, partly offset by lower fees from some of the group’s market facing businesses.

The Anglo-South African group said the prevailing uncertain and volatile macro environment had had a negative impact on certain market facing businesses.

Investec added that it remains committed to its medium-term targets, indicating that liquidity was strong.

Investec shares were up 0.3% at 402.90 pence early Friday in London. They were unchanged at R 80.00 in Johannesburg.

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