PSG still upbeat about SA despite low growth

JSE-LISTED investment holding company PSG Group yesterday said that it remains confident about South Africa’s prospects, despite low economic growth.

The group’s chief executive, Piet Mouton, said the group would continue to invest in the country as it still presented a lot of opportunities despite obvious challenges.

Moulton said PSG believed that its investment portfolio was suitably positioned to continue yielding aboveaverage returns.

The group reported double-digit growth in recurring earnings per share by 22 percent to R5.03 for the six months to end August, attributing the growth to the resilience of underlying investments.

Mouton said the group expected to grow its earnings because it had invested in the right areas of the businesses.

“We obviously would like a GDP growth of between 3 percent and 5 percent per annum, as it would make it easier doing business in the country,” Mouton said. “But we do support President Cyril Ramaphosa and our focus is here and not abroad, so we are continuing to invest in the country.”

PSG has a number of underlying investments, which include Capitec Bank, Zeder Investments, Curro Holdings, PSG Konsult and Stadio.

The group said its income increased to R4.2 billion from R3.25bn last year, while profit attributable to owners rose from R833 million to R1.12bn.

The group declared an interim gross dividend of 152 cents a share, up 10 percent from last year.

“The results are very pleasing and reflect the sound operating models and the strength and focus of the management teams of the underlying companies. This provides the group with the opportunity to gain further market share and continue to grow even in a low-growth environment,” Mouton said.

The group’s sum-of-the-parts (SOTP) value, of which more than 90 percent is calculated using JSE-listed share prices while other investments are included at market-related valuations, was up by 7 percent to R272.94.

PSG uses the SOTP value and recurring earnings per share benchmarks to provide management and investors with a realistic and transparent way of evaluating PSG Group’s performance.

Capitec remains PSG Group’s largest investment, comprising 58 percent of its total SOTP assets, and is the major contributor to PSG Group’s recurring earnings.

Capitec reported a 20 percent increase in headline earnings per share for the period under review.

PSG rose 0.61 percent on the JSE yesterday to close at R212.74.