Investec is to shutter its Click & Invest robo-business, writing off around £20 million in operating costs and software investment booked over the last 12 months.
In its annual results, the company said the decision had been taken ‘in line with the group's commitment to manage costs and allocate capital effectively’. Running losses on the unit accounted for £12.8 million of the write off, versus £13.5 million a year earlier, while the company recognised £6 million in sunk software costs.
‘The group remains committed to developing its digital initiatives and will look to incorporate the technology into its offering,’ it added.
The closure was among a number of factors weighing on the top line at the Anglo-South African business, with adjusted operating profit down 16% over the 12 months at £82 million.
That was also impacted by lower transaction fees as equity volatility kept investors out of the market, and a significant boost to earnings from a one-time investment gain in the prior year.
At group level, the company reported adjusted profits 9.4% higher at £664 million. Co-chief executives Fani Titi and Hendrik du Toit said: ‘We are implementing our strategy to simplify, focus and grow with discipline.'
They added that a planned spin-off of the company’s fund business remained on track for later this year.
‘We are committed to the demerger and listing of the asset management business and the positioning of the bank and wealth business for long-term growth.
‘In spite of a challenging operating environment, these results speak to strong support from our clients.’
Click & Invest had a troubled start, launching in mid-2017 following a two-year delay. It remained less nimble and consumer friendly than many competitors in a sector with few barriers to entry, only reducing its investment minimum from £10,000 to £2,500 in January this year, on a minimum fee of 0.65%.
Speaking at the time, boss Jane Warren (pictured) said creating a feeling of personal service in a digital product proved to be challenging. One of its chosen solutions, a 24-hour, seven-days-a-week customer service line, meant a higher level of cost than many rivals.
Across its wealth business, Investec reported positive client flows over the 12 months, with £400 million in new cash committed. However, market volatility reduced the unit’s assets by 1.7%, to £55.1 billion.
At group level total assets rose 7.3% to £111.4 billion on inflows of £6 billion on ‘favourable market and currency movements’. Asset Management adjusted operating profit increased by 0.7% to £179.4 million.