PSG Konsult interim headline earnings up 18%

PSG Konsult on Thursday reported an 18% growth in recurring headline earnings per share for the six months ended August 2018, to 21.5 cents.

“The continued upward trajectory of our key operating and financial metrics demonstrates the resilience of our business model and ability to gain market share, even in periods during which we experience economic headwinds,” PSG said.

It said that total assets under management increased to R230 billion, comprising assets managed by PSG Wealth of R182 billion and PSG Asset Management of R48 billion, while PSG Insure’s gross written premium increased by 25% to R2 billion.

Performance fees earned constituted 4.6% of headline earnings in comparison to 4.4% in the comparative period, it said.

PSG Konsult had 239 offices and 2,734 employees as at 31 August 2018, which included 862 wealth and insure advisers.

Financial highlights:

  • Gross written premium up 25% to R2.012 billion;
  • Core income was up 10% to R2.277 billion;
  • Number of advisers up 14% to 862;
  • Total assets under management up 19% to R230 billion;
  • Dividend per share up 23% to 7.0 cents;
  • Total assets under administration up 7% to R426 billion.

PSG Wealth achieved recurring headline earnings growth of 7%.

“We are satisfied with this result in the context of the prevailing investment  market conditions. Management and other fees increased by 10% as the business continues to focus on recurring income and reduce its reliance on cyclical transactional brokerage fees, which decreased by 15% during the period under review due to lower transactional volumes.

“We continue to enhance our information technology (IT) systems and develop both the adviser and client online platforms, and all related costs continue to be fully expensed. Clients’ assets managed by our Wealth advisers increased by 12% to R182.1 billion during the period under review, which  included R7.0 billion of positive net inflows.

PSG Asset Management’s recurring headline earnings grew by 53%. Client assets under management increased by 13% to R48.1 billion during the six-month period. This included R4.1 billion of positive net client inflows, predominately into our higher-margin funds, with the bulk coming from our retail-orientated target market.

“We continue to add high-quality annuity earnings from our growing retail client base, the group said.

PSG Insure achieved recurring headline earnings growth of 11%. “The group is pleased with this achievement, which has been driven by improved underwriting results. This division is in an early growth phase and continues to make inroads into the highly competitive short-term insurance market through organic growth and select acquisitions,” PSG said.

It achieved gross written premium growth of 25%.

The group said its acquisition of AIFA’s commercial and industrial insurance brokerage business was completed effective 1 June 2018. The acquired business is  made up of 82 advisers and in excess of 31,000 clients, which was integrated into the group’s distribution network of PSG Insure advisers.

This  transaction enhances PSG Insure’s footprint across South Africa and is already contributing to the group’s profitability, it said.

Looking ahead, PSG said that the cash-generative nature of the business gives PSG Konsult several options for funding business growth initiatives. “These are ultimately aimed at enhancing our overall client experience.

“The group will continue to prioritise organic growth in our current selected markets where we have relatively low, but rapidly expanding,  market shares. The group’s capital position adequately considers our current growth plans.”

Read: PSG Konsult full year headline earnings per share up 16%

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PSG Konsult interim headline earnings up 18%