PSG Group cuts dividend as Covid-19 concerns come into focus

The JSE-listed investment holding company, PSG Group, said it achieved ‘commendable’ results amidst trying economic conditions during the financial year to February 2020.

The group’s diverse range of underlying investments in banking, financial services, education and food and related business, as well as early-stage investments in select growth sectors delivered an 18% increase in recurring earnings per share to R12.81 (2019: R10.86), the group said.

This follows worthy recurring earnings per share growth from PSG Group’s core investments, apart from weaker recurring earnings per share performance reported by Curro for its financial year ended 31 December 2019.

  • Recurring earnings per share increased by 18% to R12.81 (2019: R10.86)
  • Headline earnings per share increased by 17% to R11.84 (2019: R10.11)
  • Attributable earnings per share increased by 27% to R11.29 (2019: R8.88)

A final dividend of 75 cents (2019: 304 cents) per share was declared for a total of 239 cents (2019: 456 cents) per share, down 48%.

The lower dividend follows a decision by Capitec to not declare a final dividend for the year ended 29 February 2020.

Capitec remains PSG Group’s largest investment and contributor to its recurring earnings. The bank reported a 19% increase in headline earnings per share for the year under review.

PSG Konsult, a financial services company focused on providing wealth management, asset management and insurance solutions to clients, reported an 8% increase in recurring headline earnings per share for the year under review.

PSG Alpha

PSG Alpha, which serves as incubator to identify and help build the businesses of tomorrow, reported a 20% increase in recurring earnings per share for the year under review.

Its major investments include shareholdings in Stadio (private higher education: 44%), CA Sales (FMCG distribution: 47.7%), Evergreen (developer and operator of retirement lifestyle villages: 50%) and Energy Partners (manufacturer, owner and operator of energy assets: 54.1%).

PSG noted that Curro, a provider of private school education, reported a 15% decline in recurring headline earnings per share for its financial year ended 31 December 2019, mainly as a result of increased finance costs associated with greenfield developments, increased bad debts with the consumer under pressure and higher than anticipated property rates and taxes.

Zeder, an investor in the broad agribusiness and related industries, reported an 18% increase in recurring headline earnings per share for the year under review.

Pursuant to the recent disposal of its entire investment in Pioneer Foods, Zeder declared a special dividend of R2.30 per share payable on 28 April 2020.

PSG Group chief executive officer Piet Mouton said: “Although the results are commendable given the tough economic conditions it was achieved in, it is historic in nature and has almost no bearing on the immediate crisis-ridden future we are currently facing given the Covid-19 economic fallout.

“A very strenuous time lies ahead and it is virtually impossible at this stage to quantify the impact of Covid-19 on our economy, businesses and our people – but it will be dire and correlated to the duration of the lockdown,” Mouton said.


Read: Plan to ease the lockdown will be make or break for South Africa’s economy: Nedbank

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PSG Group cuts dividend as Covid-19 concerns come into focus