Strong set of results for PSG Konsult after listing

PSG Konsult, the independent financial services provider, reported strong financial results for the six months to August 2014, with the implementation of the group’s growth strategy for its underlying divisions already gaining momentum.

This follows PSG Konsult’s successful JSE listing in June this year and a listing on the Namibian Stock Exchange in July.

Recurring headline earnings increased by 36% to R147.3 million for the period under review, while the recurring headline earnings per share increased by 32% to 11.7 cents. Funds under management increased by 39% to R129 billion and funds under administration by 33% to R266 billion.

An interim dividend of 4.0 cents was declared.

Announcing the results, PSG Konsult CEO Francois Gouws said that the group is particularly pleased with top line revenue growth of 26% against the corresponding period last year, a specific area of management focus.

This will remain a strategic focus in the year ahead, along with maintaining profit margins whilst controlling and managing business risks within the group’s risk appetite framework.

“This will be achieved by further implementing and executing our three-year strategic plans for each of our underlying divisions – PSG Wealth, PSG Asset Management and PSG Insure. This will be supplemented by building the PSG brand and establishing the group as a fully-fledged financial services business through our comprehensive range of services and products.

“We will also focus on optimising synergies between divisions to create further business development opportunities and to extend the group’s share in the value chain. Particular emphasis will be placed on growing our asset management and short-term insurance activities,” Gouws said.

PSG Wealth remained a key revenue driver and increased headline earnings by 33% to R93.9 million in the period under review. The division’s key strategy is to offer a holistic end-to-end client proposition by providing high-quality advice, service excellence and products to grow and preserve clients’ wealth.

PSG Asset Management, a high-growth area for the group, increased headline earnings by 63% to R33.8 million. The division has three core areas of strategic focus: delivering excellent long-term investment performance, responsibly growing long-term assets (with a retail emphasis) at an acceptable margin through advisers, platforms, multi-managers, institutional clients and direct clients, and ensuring that robust operational processes are in place.

During the period under review PSG Insure’s headline earnings increased by 4% to R17.7 million, after it achieved 29% revenue growth against the same period last year in a fiercely competitive market. Net income after tax prior to minorities increased by 28%, but due to the corporate transaction concluded with Santam effective 19 September 2013, PSG Konsult’s shareholding in Western diluted from 90% to 60%. This had a R5.6 million adverse impact on the overall headline earnings contribution of PSG Insure. The division’s strategy is to offer simple, cost-effective insurance solutions and quality advice.

PSG Konsult had 193 offices and 1 916 employees at the end of August 2014, of which 629 were ?nancial planners, portfolio managers, stockbrokers and asset managers, as well as 396 professional associates (accountants and attorneys).

“The future is always uncertain, but we remain cautiously optimistic about our strategy,” Gouws said.