Financial services group PSG Konsult increased recurring headline earnings per share by 23 percent in the six months to August 31 after its three key divisions achieved “market leading” revenue and growth in earnings.
Recurring headline earnings per share of 30.6 cents were also 23 percent above pre-Covid-19 levels from the strong performances of PSG Wealth, PSG Asset Management and PSG Insure. The interim dividend was lifted to 10 cents from 8 cents in 2020 and 7 cents in 2019.
Total assets under management increased 21 percent to R2.96 billion from R2.45bn in 2020. In 2019, the figure was R2.28bn. Gross premiums increased 4 percent to R2.82bn, from R2.71bn in 2020, while in 2019 the figure was R2.72bn.
CEO Francois Gouws attributed the group’s performance to its core business strengths and strong focus on enabling technology adoption.
“These results confirm the benefits of being an advice-led firm with the ability to maintain excellent relationships through integrity, trust and transparency. In addition, investment in digital capabilities enables us to operate seamlessly in the current environment and continue to generate returns for our shareholders,” he said.
CFO Mike Smith said in an interview, that in the second half, shareholders could look forward to a continuation of the “pleasing performance of the group against its key metrics” and the group had delivered consistently against these metrics over a 10-year period. These metrics had built trust and confidence in the market, he said.
He said the management team was stable, and the group had added some 90 new graduates to its near 1 000-strong team of financial advisers through the period. Typically, the group attracts high-quality advisers, but also trains graduates. It has some 263 offices across the country.
PSG Wealth recorded net inflows of R10.8bn in managed assets, up 40 percent compared with the prior period. The division was recognised as the Wealth Manager of the Year: Large Institutions at the Intellidex 2021 Wealth Manager of the Year Awards, for the third consecutive year. The division was also awarded as Top Online Broker at the recent Intellidex Top Securities Brokers Awards.
PSG Insure sustained its strong performance with R2.82bn of gross written premium. The division received the Santam National Intermediary of the Year award, in both the commercial and personal lines categories.
PSG Asset Management significantly improved results, growing assets under administration to R161.5bn, up 13 percent over February 2021.
PSG Konsult remained well capitalised, with a capital cover ratio of 233 percent (2020: 208 percent), which comfortably exceeded the 100 percent minimum regulatory requirement.
“The group generates strong cash flows, providing optionality in terms of our capital structure,” said Gouws.
During the period, PSG Konsult repurchased 7.2 million shares at a cost of R80.4m.
Gouws said the acceleration of the IT infrastructure investments, and continued innovation in this space, enabled them to connect more regularly with more advisers, clients and employees.
“Our strong balance sheet and motivated people enable us to focus on organic growth and optimising shareholder returns,” he said.
BUSINESS REPORT ONLINE