PSG Konsult lifts earnings in difficult economy

PSG Konsult on Wednesday said it increased recurring headline earnings per share by 4% for the year ended February 2019, and achieved return on equity of 21.5%.

Core income climbed 10% to R4.6 billion, the group said, adding that total assets under management increased by 8% to R222 billion, comprising assets managed by PSG Wealth of R175 billion (7% increase) and PSG Asset Management of R47 billion (11% increase), while PSG Insure’s gross written premium amounted to R4.5 billion (36% increase).

Additional highlights from its financial results included:

  • Recurring headline earnings per share up 4% to 44.6 cents;
  • Gross written premium up 36% to R4.5 billion;
  • Number of advisers up 19% to 932 people;
  • Dividend per share up 14% to 20.5 cents;
  • Total assets under administration  up 5% to R422 billion

PSG Konsult said its board decided to approve and declare a 10% increase in the final gross dividend of 13.5 cents per share (2018: 12.3 cents per share) from income reserves for the year ended 28 February 2019. This brings the full-year increase in the total dividend to 14%.

“We continue to invest in our business given our confidence in its long-term growth prospects,” chief executive officer, Francois Gouws.

“Specifically, investment in technology resulted in a 29% increase in related costs, while personnel costs also increased markedly from the previous year mainly due to an  increase in technology staff hires and 68 newly qualified graduates – 88% of which are ACI candidates. The graduates we hired are part of our continued strategy to build our own talent. ”

PSG Konsult had 254 adviser offices and 2,886 employees as at 28 February 2019, which included 932 wealth and insure advisers. A further 417 were professional associates (accountants and attorneys).

During the year under review, the number of PSG advisers increased by 148 through  a combination of organic growth and selected acquisitions, including the AIFA acquisition by PSG Insure.

“We believe strongly in building our  own future talent and are confident that the investment in our people will allow us to continue to prosper,” Gouws said.

Looking ahead, the chief executive said that the cash-generative nature of the business gives PSG Konsult several options for funding business growth initiatives and optimising risk-adjusted returns for our shareholders.

“As such, the group remains confident about the prospects for continued growth. The group will continue to prioritise organic growth in our selected markets where we have a relatively low, but rapidly expanding market share.

“The group will continue to focus on initiatives that enable us to service clients in an integrated manner that is seamless and market-leading. The group’s focus on products, platforms, client service excellence and the quality of its advice process remains a key initiative,” Gouws said.

Read: PSG Konsult interim headline earnings up 18%

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PSG Konsult lifts earnings in difficult economy