Independent financial services provider PSG Konsult has reported its first set of full-year financial results. This follows its successful listing on the Johannesburg Stock Exchange (JSE) and the Namibian Stock Exchange (NSX) in June and July 2014, respectively.
Recurring headline earnings increased by 36% to R341.2m for the year to 28 February 2015, up from R251.2m for the same period in 2014, whilst recurring headline earnings per share increased by 31% to 27.0 cents per share. Funds under management increased by 27% to R141.9bn and funds under administration grew by 31% to R308.1bn. A dividend of 12.0 cents was declared.
Announcing the results, PSG Konsult CEO Francois Gouws said that the group’s positive growth momentum was gratifying, taking into account the current sluggish economic growth environment and softer markets.
“Focusing on client service excellence through the quality of our advice, products and platforms is proving a resilient strategy for PSG Konsult,” Gouws says.
The PSG Wealth and PSG Asset Management divisions have shown particularly pleasing results, with notable headline earnings growth. Results within PSG Insure were lower than expected due to higher than forecasted claims ratios. “Overall, each division has shown positive revenue growth, which was a key focus for this financial year,” says Gouws. PSG Konsult has shown a combined revenue increase of 18% compared to last year.
PSG Wealth continues to be a key revenue driver for the PSG Konsult group, contributing approximately 56% towards combined revenue. It maintains an upward revenue trajectory, benefiting from both organic and selected adviser acquisition growth.
PSG Asset Management remains a high-growth area, attracting strong client inflows from both retail and institutional investors. PSG Asset Management attracted net inflows of R5.9bn for the financial year, including a new R1.1bn institutional asset management mandate.
PSG Insure continues to make inroads in the highly competitive short-term insurance market, having achieved revenue growth of 22% compared to the prior financial year. The division’s advisers increased revenue which against the backdrop of a particularly difficult industry environment is an achievement that PSG Konsult is especially pleased with.
The group is cautious about investment markets and, in particular, world bond markets. Rates across these markets – and around the world – are at historic lows, and have the potential to quickly revert to more normalised levels. Given how low rates are, the size of these moves are likely to be profound, and ultimately disruptive. It is for this reason that PSG Konsult has repaid all its debt (excluding finance leases) and invested most of its assets in short-duration assets.
Over the past three years, PSG Konsult has also re-engineered and refocused its business. Unprofitable or non-core activities were closed, integrated or sold. At the same time, the group invested – and continues to invest – in streamlining and automating processes. “This is all with the aim of creating scalable capacity throughout the business,” Gouws concludes.