FINANCIAL services group PSG Konsult shed Covid-19 shackles and delivered strong annual results yesterday boosted by the steady improvement in its market positioning.
For the year ended February, 2022, it increased recurring headline earnings per share by 32 percent over the prior year, generating a 23.8 percent return on equity compared to 2021, which was 20.4 percent - bringing earnings growth to 45 percent per share above pre-Covid levels in 2020.
Recurring headline earnings per share increased by 32 percent to 69.7 cents per share. The total dividend per share rose by 31 percent to 32.0 cents per share.
Total assets under management increased by 17 percent to R315 billion. Gross written premium increased by 3 percent to R5.69bn.
Chief executive Francois Gouws said the group’s robust performance was the result of its core business strengths and its winning strategy that had paid off repeatedly for shareholders, despite ongoing industry challenges and the Covid-19 pandemic.
“This growth is a testament to the business’s competitive advantage and the resilience of their advice-led business model, with technology at the foundation,” he said.
Chief financial officer Mike Smith said in an interview, during the period under review, the company had attracted positive net clients flow exceeding R20.6bn.
“The key driver of our profits is client asset fund management so we’ve delivered good outcomes for clients, and excellent new client inflows to the business,” he said.
Smith said the company’s focus had been on the top-line revenue growth, saying, “We’ve done that very well when you look at our past 10 years. We've had sequential growth and all our key financial operational methods are an excellent achievement.”
He said the firm had delivered very good results and was on track to its total return on an investment. “When we pay our dividends and clients reinvest those dividends, they have done that for the past 16-and-half years, a R100 000 initial investment would have gone up to R6.8m with us, whereas, if you invest the same amount on the JSE, it would have only grown to R948 000,” he said.
Gouws said PSG Konsult continued to generate strong cash flows, which gave the company various options to optimise its capital structure and risk adjusted returns to shareholders.
“Our strong financial performance and prudent approach to investing shareholder assets – with equity exposure below 5 percent - also ensures that PSG Konsult remains resilient,” he said.
This was reflected by the fact that, during the reported period, PSG Konsult repurchased and cancelled 9.6 million shares at a cost of R110 million, Gouws said.
Commenting on the proposed unbundling from the PSG Group, Gouws said, “We operate independently of the PSG Group, from operational, governance and financial support perspectives. We therefore believe that the implementation of the proposed unbundling and change in shareholder structure will not impact our business model, operations, or financial position.”
BUSINESS REPORT ONLINE