PSG Konsult achieves strong results after repositioning
PSG Konsult, the independent financial services provider, posted strong financial results for the six months to August 2013 with a comprehensive repositioning and a new focus for its underlying business units starting to bear fruit.
For the establishment of a fully-fledged financial services group, the underlying business units were partitioned in three focus areas effective from 1 March this year. It consisted of PSG Wealth, PSG Asset Management and PSG Insure to respectively reflect the group’s wealth management, asset management and short-term insurance operations.
Recurring headline earnings increased by 50% to R108,7 million for the period under review, while the recurring headline earnings per share increased by 31% to 8,9 cents.
Funds under management increased by 35% to R93 billion, funds under administration by 32% to R107 billion and total assets by 33%, or R50 billion, to R200 billion.
An interim dividend of 4,0 cents (2012: 3,5 cents) was declared.
Announcing the results, PSG Konsult CEO Francois Gouws, said the results following the repositioning of the group is starting to gain momentum, and that good progress has been made with various strategic initiatives aimed at investing in high-potential growth areas and streamlining the business in all other areas. The bulk of this repositioning process is now complete. A decision to list on the JSE will be finalised in the second half of 2014.
PSG Asset Management delivered commendable investment returns for its clients. Overall assets increased substantially on the back of strong fund inflows and enhanced market values as a result of favourable investment market conditions.
Testimony to this is that top quartile investment returns were recorded across the entire domestic flagship fund range of PSG Asset Management in the respective Morningstar categories up to the end of August this year.
Despite prevailing difficult underwriting market conditions, PSG Insure benefited from efforts to enhance vertical integration and exploit synergies that the group’s short-term insurance license and expertise provides, resulting in improved service delivery and product to the PSG Konsult client base.
PSG Wealth, which remains a core strength of the group, also benefited from positive client inflows, increased client trading activity and generally more favourable market conditions. A key strength is the depth and quality of PSG Konsult’s financial advisers, providing the group with a distinct competitive advantage. The intention is to continue to grow the group’s advisory practices.
As a business unit of PSG Wealth, PSG Online was awarded as Business Day Investors Monthly "Stockbroker of the Year” for the third consecutive year and PSG Konsult Financial Planning as Business Day Investors Monthly "Wealth Manager of the Year” in the Up and Coming Professional category, and Santam Personal Lines "Broker of the Year” award for the third consecutive year.
At the end of August PSG Konsult’s business network consisted of 220 offices and 1 796 employees, of which 610 were financial planners, portfolio managers, stockbrokers and asset managers, as well as 408 professional associates (accountants and attorneys).
Gouws said going forward, the group’s strategy will be to grow the business and profitability by implementing and execute the three-year strategic plans for each of the underlying businesses. Through its comprehensive range of services and products, PSG Konsult will be positioned as a fully-fledged financial services business.
The group will also aim to optimise the synergies that exist between business segments in order to create further business development opportunities. The strategy also provide for an extension of the sharing in the value chain and in particular to grow the asset management and short-term insurance activities.
"The group is well positioned for further growth and we are optimistic that our strategy to have a larger share in the value chain will enable us to deliver superior returns for our shareholders,” Gouws said.
