PSG Konsult boots turnover by 10%

PSG Konsult, the independent provider of financial services, has amidst challenging economic conditions in the financial year to February 2010, managed to increase turnover by 10,3% to R834 million.

Whilst net profit before tax increased by 2% to R133,7 million, a heavier tax burden weighed headline earnings down by 7,7% to R89,4 million, with headline earnings per share declining equally to 12,2 cents per share.

Funds under administration increased substantially from R43,6 billion to R72 billion, mainly because of a distinct improvement in market conditions during the second half of the year and the acquisition of T-Sec’s private client stockbroking division. The collection of short-term insurance premiums on behalf of product suppliers was steady at R1 450 million.

A final dividend of 5,5 cents per share (2009: 6,0 cents) was declared, which together with the interim dividend of 2,8 cents per share amounts to a total of 8,3 cents per share (2009: 8,8 cents) for the period under review.

PSG Konsult’s country-wide network remained at 197 offices with some being consolidated and new ones established. The number of financial planners, stockbrokers, short-term insurance brokers and asset finance advisors increased substantially from 514 to 572. The result of this increase should bear fruit in the current financial year.

PSG Konsult CEO, Willem Theron, said the higher turnover was generated from organic growth and acquisitions during the period under review. Indications of more lenient market conditions were evident from headline earnings amounting to R49,9 million in the second half of the financial year compared to R39,5 million in the first half.

Given the challenges in the period under review, the results can be considered as satisfactory. With our focus on the long-term, the company continued with its strategy to create capacity and to provide advisers with support.

“We did not stand back. The company’s adviser corps was extended further, whilst also investing in technology. Our long-term focus will remain on good service delivery to clients via PSG Konsult’s advisers and to supplement it with technology,” Theron said.

Looking to the future, he said that the stock market has strengthened lately. If current levels are sustained, the same type of results as achieved in the second half of the period under review can be expected. A correction in the market should, however, not be excluded.

“PSG Konsult’s investment horizon is set on the long-term, whilst client’s investments will be managed conservatively. Sound and appropriate opportunities will however be considered carefully as and when they arise.

“Whilst electricity and petrol prices have recently increased sharply and with salary and wage increases lagging, it can be expected that the consumer’s financial position will still be under pressure for the foreseeable future. This is especially noticeable with short-term insurance and the payment of premiums. This is where we endeavour to provide good advice and support on how to be selective and cost effective, rather than to cancel insurance.

“Proper financial planning remains critical for the short-, medium- and long-term,” Theron said.