Wrap Text
Short-Form Announcement: Unaudited Interim Results For The Six Months Ended 31 August 2023 And Dividend Declaration
PSG FINANCIAL SERVICES LIMITED
(Previously PSG Konsult Limited)
(Incorporated in the Republic of South Africa)
Registration Number: 1993/003941/06
JSE Share Code: KST
NSX Share Code: KFS
SEM Share code: PSGK.N0000
ISIN Code: ZAE000191417
LEI Code: 378900ECF3D86FD28194
(“PSG Financial Services” or “the Company” or “the Group”)
SHORT-FORM ANNOUNCEMENT: UNAUDITED INTERIM RESULTS FOR THE SIX
MONTHS ENDED 31 AUGUST 2023 AND DIVIDEND DECLARATION
1. FINANCIAL RESULTS
• Recurring headline earnings per share increased by 21% to 37.6 cents per share
• Dividend per share increased by 23% to 13.5 cents per share
• Total assets under management increased by 19% to R375.9bn
• Gross written premium increased by 12% to R3.4bn
Note: All amounts contained in this short-form announcement are presented in ZAR.
PSG Financial Services delivered a 21% increase in recurring headline earnings per
share and a return on equity of 22.5%.
These results were achieved against a backdrop of mostly known challenging operating
conditions. Our key financial metrics under these conditions highlight the competitive
advantage of our advice-led business model. Total assets under management increased
by 19% to R375.9 billion, comprising assets managed by PSG Wealth of R325.6 billion
(18% increase) and PSG Asset Management of R50.3 billion (20% increase), while PSG
Insure’s gross written premium amounted to R3.4 billion (12% increase). Performance
fees earned constituted 2.5% (2022: 3.7%) of headline earnings.
From a cost perspective, our Insure division was adversely impacted by the Boksburg
earthquake and Western Cape storms during June 2023, but Western National’s
comprehensive reinsurance programme cushioned the effect on underwriting results. The
firm remains confident about its long-term growth prospects, and we therefore continued
to invest in both technology and people. Compared to the prior comparable period, our
technology and infrastructure spend increased by 12% (these costs continue to be fully
expensed), while our fixed remuneration cost grew by 12%. These factors had a muted
impact on our operating margins. We are proud of the progress made in growing our own
talent, with 32 newly qualified graduates (in line with our transformation objectives) having
joined during the six-month period.
PSG Financial Services’ key financial performance indicators for the six months ended
31 August 2023 are shown below.
31 Aug 23 Change 31 Aug 22
R’000 % R’000
Core income (Note 1) 2 896 881 15 2 552 437
Headline and recurring headline earnings 481 861 18 407 557
Non-headline items 545 1 120
Earnings attributable to ordinary shareholders 482 406 18 408 677
Divisional recurring headline earnings
PSG Wealth 312 911 18 264 981
PSG Asset Management 100 186 23 81 377
PSG Insure 68 764 12 61 199
481 861 18 407 557
Weighted average number of shares in issue
(net of treasury shares) (millions) 1 280.3 (3) 1 313.9
Earnings per share (basic) (cents)
– Headline and recurring headline 37.6 21 31.0
– Recurring headline (excluding intangible asset 40.4 20 33.7
amortisation cost)
– Recurring headline (excluding performance fees) 36.7 23 29.9
– Attributable 37.7 21 31.1
Dividend per share (cents) 13.5 23 11.0
Return on equity (ROE) (%) 22.5 19.8
Note 1: The comparative figure has been restated for the initial application of IFRS 17.
Capital management
PSG Financial Services’ capital cover ratio remains strong at 240% (2022: 238%) based
on the latest insurance group return. This comfortably exceeds the minimum regulatory
requirement of 100%. During August 2023, Global Credit Rating Company affirmed the
Group’s long-term and short-term credit ratings at A+ (ZA) and A1(ZA) respectively, with
a Stable Outlook. The increase in the Group’s capital cover ratio and the credit rating
affirmation is testament to the Group’s strong financial position and excellent liquidity.
PSG Financial Services also continues to generate strong cash flows, which gives us
various options to optimise our capital structure and risk-adjusted returns to the benefit of
shareholders:
• The Group repurchased and cancelled 9.7 million shares at a cost of R120.6
million during the period as part of shareholder capital optimisation.
• Our shareholder investable asset’s exposure to equity marginally increased to 6%
(previously below 5%). We continue to monitor investment markets and will
gradually increase our value at risk exposure to align with our long-term target.
2. INTERIM DIVIDEND DECLARATION
Considering the strong cash position, the board declared an interim gross dividend of 13.5
ZAR cents per share from income reserves for the period ended 31 August 2023 (2022:
11.0 ZAR cents per share). The Group’s dividend policy is unchanged and expected to
remain between 40% to 60% of full year recurring headline earnings excluding intangible
asset amortisation.
The dividend is subject to a South African dividend withholding tax (“DWT”) rate of 20%,
unless the shareholder is exempt from paying dividend tax or is entitled to a reduced rate
in terms of the applicable double-tax agreement. Including DWT at 20% results in a net
dividend of 10.8 ZAR cents (2022: 8.8 ZAR cents) per share. The number of issued
ordinary shares is 1 283 761 365 at the date of this declaration. PSG Financial Services’
income tax reference number is 9550/644/07/5.
The salient dates of the dividend declaration are:
Declaration date Wednesday, 11 October 2023
Last day to trade cum dividend Tuesday, 31 October 2023
Trading ex-dividend commences Wednesday, 1 November 2023
Record date Friday, 3 November 2023
Date of payment Monday, 6 November 2023
As the dividend has been declared and denominated in ZAR, it will be paid (in ZAR) into
the bank accounts of shareholders appearing on the Mauritian register.
Share certificates on the South African and Namibian registers may not be dematerialised
or rematerialised between Wednesday, 1 November 2023 and Friday, 3 November 2023,
both days inclusive.
Due to Wednesday, 1 November 2023 being a public holiday in Mauritius, the last day to
trade cum dividend for shareholders on the Mauritian register will be Friday, 27 October
2023, with ex-dividend trading commencing on Monday, 30 October 2023.
Share certificates on the Mauritian register may not be dematerialised or rematerialised
between Monday, 30 October 2023 and Friday, 3 November 2023, both days inclusive.
3. LOOKING FORWARD
We have always been confident that resourceful South Africans will build a better future
for themselves and their children. The recent collaborative efforts between the
government and the private sector to deploy their collective resources and business
acumen to alleviate energy supply issues, improve the country’s logistics performance
and address the high crime and corruption levels in South Africa are welcomed by the
Group. Urgent action in resolving these three problem areas needs to remain a priority to
support a recovery in South Africa’s economic growth rate that will lead to job creation.
Irrespective of the short-term challenges, we remain confident in our long-term strategy
and will continue to invest in our businesses, thereby securing prospects for growth. We
will, however, continue to monitor local and global events and the associated impact on
the Group’s clients and other stakeholders.
4. SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors of the Company. It
contains only a summary of the information in the full announcement
(“Full Announcement”) and does not contain full or complete details. The Full
Announcement can be found at:
https://senspdf.jse.co.za/documents/2023/JSE/ISSE/KST/PSGH12024.pdf
Copies of the Full Announcement are also available for viewing on the Company’s website
at https://www.psg.co.za/files/investor-relations/financial-information/PSGH12024.pdf
In addition, electronic copies of the Full Announcement may be requested and obtained,
at no charge, from the Company at company.secretary@psg.co.za and from its sponsor,
PSG Capital, while hard copies may be obtained from their registered offices, during
normal business hours.
Any investment decisions by investors and/or shareholders should be based on
consideration of the Full Announcement, as a whole.
Tyger Valley
11 October 2023
JSE Sponsor: PSG Capital Proprietary Limited (“PSG Capital”)
NSX Sponsor: PSG Wealth Management (Namibia) Proprietary Limited, member of the
Namibian Stock Exchange
SEM Authorised Representative and SEM Sponsor: Perigeum Capital Ltd
This notice is issued pursuant to the JSE Limited Listings Requirements and the SEM Listing
Rules. The board of directors of PSG Financial Services accepts full responsibility for the
accuracy of the information contained in this communiqué.
Date: 11-10-2023 10:51:00
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