PSG Konsult, the independent 16 year old financial services provider, is set to make its debut on the JSE in June this year after a successful restructure of its businesses and a new focus for its underlying units starting to bear fruit.
Announcing the company’s financial results for the financial year to February 2014, PSG Konsult CEO
Francois Gouws said that the decision to list on the JSE follows the meeting of certain previously stated conditions for a listing.
“We wanted to bed down the structure of the group after the comprehensive restructuring process of the previous year and to release at least one full set of year-end financial results. This has been achieved.
“The listing is about a further positioning of the company and establishing a sound track record for when capital might be needed in future. It is also about rating agencies considering a listing as more fitting,” Gouws said.
The listing is on the back of a robust set of financial results with recurring headline earnings increasing by a hefty 44% to R251,1 million (2013: R174,4 million). The recurring headline earnings per share grew by 34% to 20,6 cents (2013: 15,4 cents) with more shares in issue following a successful rights issue in September 2012.
The headline earnings grew by 41% to R244,5 million (2013: R173.8 million) and headline earnings per share by 30% to 20,0 cents (2013: 15,4 cents). An unchanged final dividend of 7,3 cents per share was declared to bring total dividend for this year to 11,3 cents (2013: 10,8 cents) per share.
Funds under management grew by 38% to R112,1 billion (2013: R81,4 billion) and funds under administration by 31% to R234,5 billion (2013: R179,5 billion). Underwriting premium income increased by 550% to R432,6 million (2013: R66,6 million).
Gouws said the results are highly credible, especially when considering all the changes that took place within the group. To achieve these results means that we are on the right track and that the restructuring was successful.
Each of the three divisions of PSG Konsult produced commendable results for the period under review.
PSG Wealth increased its recurring headline earnings by 32% to R166,6 million. The business unit continues to remain a key revenue driver for the group and has maintained its upward revenue trend, benefiting from positive client inflows, increased trading activity and favourable market conditions.
PSG Asset Management grew its recurring headline earnings by a healthy 75% to R54,3 million. The asset manager remains a high growth area for the group. The increased brand awareness has facilitated the strong client inflows from both retail and institutional investors.
PSG Insure achieved 72% growth to R30,2 million in recurring headline earnings. Operating in a fiercely competitive market, particularly on the personal lines business, inward reinsurance income has nevertheless shown significant growth.
Through vertical integration PSG Insure now has the ability to participate and share in a larger portion of the fee value chain. Historically this was limited to providing insurance advice, short-term insurance administration services, which through the acquisition of Western Group Holdings now also includes insurance underwriting activities. This has provided the division with a new growth path.
Earnings growth was clearly across the board with each of the divisions delivering increases of more than 30%. Particularly PSG Asset Management came to the fore, which has always produced good earnings but has now also started receiving good investment inflows. The division has exciting potential to perform well in future.
“Going forward, we remain cautiously optimistic about our strategy. The strategic focus for the year ahead is top line revenue growth, which will enable PSG Konsult to unlock operational leverage scale benefits.
“To achieve this, the focus will be on implementation and execution of our three-year strategic plan at each of our underlying businesses, positioning the group as a fully-fledged financial services business, optimising of synergies between business segments and extending of the group’s sharing in the value chain and in particular to grow the asset management and short-term insurance activities,” Gouws said.
At the year-end PSG Konsult consisted of 193 offices and 1 841 employees, of which 618 were financial planners, portfolio managers, stockbrokers and asset managers, plus 402 professional associates (accountants and attorneys).