PSG rises above the economy’s sluggish pace

Firm posts 39% surge in headline earnings

INDEPENDENT financial services provider PSG Konsult has reported a 39 percent rise in headline earnings for the financial year to February.

The company said while its insurance results were lower than expected due to an increase in claims, its total increased by 18 percent to R3 billion compared with R2.6bn in the same period last year.

The group’s shares gained 2.05 percent to close at R7.45 on the JSE yesterday.

PSG chief executive Francois Gouws said the group had achieved positive growth despite the sluggish economic situation in the country.

He said the total gross dividend declared for the 2015 financial year was 12c per share compared with 11.3c last year.

“The group’s positive growth momentum has continued and enabled it to once again produce commendable results,” Gouws said.

“PSG Wealth and PSG Asset Management have shown particularly pleasing results with notable headline earnings growth,” he added.

Wealth division

The group said its wealth division continued to be the key driver of growth, contributing to more than half the combined revenue. It said the division benefited from both organic and selected adviser acquisition.

Gouws said brokerage income grew by 23 percent, while management fees income also increased, rising by 30 percent compared with the 2014 financial year.

“Managed assets increased by 30 percent to R110.2 billion (2014: R84.7bn) and assets under administration by 39 percent to R162.7bn (2014: R117bn),” he said.

The group said its asset management division had attracted more than R5.9bn in net inflows for the financial year.

Gouws said that over the period the total assets under the group’s control had increased by 51 percent to R23.8bn compared with R15.8bn last year, and assets under administration by 32 percent to R64.7bn compared with R49bn in the comparative period.

“The focus on generating recurring earnings placed less reliance on performance fees, with these fees contributing only 7.2 percent of group headline earnings, compared with 10.7 percent last year.”

The group said its strong performance over the last three years, together with its enhanced financial position, had resulted in the Global Credit Rating Company upgrading its long-term rating to BBB+ from BBB.

The group said its successful JSE and Namibian Stock Exchange listings last year had had a positive impact on its funding profile and had improved its borrowing profile.

However, PSG reported that its underwriting margin at Western Group Holdings had declined to 5.4 percent from 7.8 percent last year.

“This was due to increased weather-related and commercial motor claims.”