PSG Insure continues to be PSG Konsult division’s star performer

JSE-LISTED financial services group PSG Konsult’s insurance division continued to be the group’s star performer, posting a 50 percent increase in recurring headline earnings for the six months to end August.

PSG Insure grew its recurring headline earnings to R54.09 million, up from R36.15m compared to last year.

PSG Konsult’s other two divisions, PSG Wealth and PSG Asset Management, reported a 10 percent growth and 7 percent decline in recurring headline earnings, respectively.

Chief executive Francois Gouws said the successful integration of the recent Absa Insurance and Financial Advisers acquisitions and robust underwriting results had boosted the result.

“Gross written premium growth of 35 percent to R2.7 billion was achieved, and the division continued to focus its efforts on growing the commercial lines side of the business, which requires specialist adviser expertise,” Gouws said.

Overall PSG reported a 10 percent increase in recurring headline earnings to R310.63m compared to last year, and generated a return on equity of 20.2 percent.

Recurring headline earnings per share increased by 8 percent to 23.2 cents and the group declared a dividend of 7.5c a share, up by 7 percent compared to last year’s 7c.

The group’s total assets under management decreased marginally to R228.1bn, comprising assets managed by PSG Wealth of R184.5bn and PSG Asset Management of R43.6bn.

PSG Asset Management recurring headline earnings declined to R81.06m, down from R87.21m while PSG Wealth recurring headline earnings increased to R175.48m, up from R159.79m compared to last year.

Gouws said the fundamentals and prospects of the wealth division gave them great confidence, and PSG believed that their commitment to securing long-term relationships with clients would continue to differentiate them in the markets it competed in.

The group decided to negotiate the early redemption of the R100m notes issued under the Domestic Medium-Term Note programme.

The group said the notes were redeemed on July 12, utilising its surplus cash, and resulted in the group having no remaining interest-bearing debt at the end of August.

Nolwandle Mthombeni, an investment analyst at Mergence Investment Managers, said PSG Konsult delivered a good result.

“The strength of its brand was evident by the continued inflows into its wealth business. What is also impressive is that the company paid off its debt,” Mthombeni said.