PSG Konsult raises assets to R193 billion

INDEPENDENT financial services group PSG Konsult has reaped the benefits of a positive rating by Global Credit Rating company, raising up R100 million as result.

The company raised assets under its management 16 percent to R193 billion during the six months to end August and increase the number of advisers by 2 percent to 753 advisers.

Its three divisions: PSG Wealth, PSG Asset Management and PSG Insure all reported growth during the period.

Chief executive Francois Gouws said the rating, which affirmed the company’s short and long-term investment grade to A1-(za) with a stable outlook, played an important role in securing lending on favourable terms.

“As you know the country was downgraded to sub-investment grade by ratings agencies early this year, we have managed to keep ours positive and I don’t think we would have been able to raise that kind of money with a negative rating,” Gouws said. “Secondly, it allows us to raise funding at competitive rates in the market.”

Gouws said the group wanted to maintain its existing clients and had put in place initiatives to ensure that it enlisted new ones.

“The group is confident that it remains well positioned to continue to build its adviser network and client base despite the current uncertain and challenging operating circumstances,” Gouws said.

The group reported a 10 percent increase in headline earnings a share to 18.2 cents during the period, up from 16.6c while total income grew to R2.1bn, up from R2bn reported a year ago.

Headline earnings rose 12 percent to R239.78 and gross written premium was up 19 percent to R1.61bn. The group declared a 12 percent increase in dividend a share of 5.7c and total assets under administration increased by 12 percent to R398bn.

Nolwandle Mthombeni, an investment analyst at Mergence Investment Managers, said the 10 percent headline earnings growth was a satisfactory result. “Following a period of poor investment performance the company has shown a good recovery,” Mthombeni said.

The group’s share price was up by almost 20 percent during the period to R9.01 share, up from R7.51 at the end of February.

PSG Insure was the most impressive division during the period, achieving recurring headline earnings growth of 23 percent. PSG Asset Management and PSG Wealth reported recurring headline earnings growth of 20 percent and 7 percent respectively.

Post-reporting the group announced that it has entered to an agreement to acquire the commercial and industrial insurance brokerage business of Absa Insurance and Financial Advisers.

PSG shares declined 2.67 percent on the JSE yesterday to close at R8.75.