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Short-Form Announcement: Unaudited Interim Results For The Six Months Ended 31 August 2024 And Dividend Declaration
PSG FINANCIAL SERVICES 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 "PSG" or "the company" or "the group")
SHORT-FORM ANNOUNCEMENT: UNAUDITED INTERIM RESULTS FOR THE SIX
MONTHS ENDED 31 AUGUST 2024 AND DIVIDEND DECLARATION
1. FINANCIAL RESULTS
• Recurring headline earnings per share increased by 28% to 48.2 cents per share
• Dividend per share increased by 26% to 17.0 cents per share
• Total assets under management increased by 16% to R435.7bn
• Gross written premium increased by 10% to R3.7bn
Note: All amounts contained in this short-form announcement are presented in ZAR.
PSG delivered a 28.0% increase in recurring headline earnings per share and a return on
equity of 26.2%.
While operating conditions remained challenging, more favourable equity market
conditions and sustained high interest rates impacted positively on the group's results
during the period. Our key financial metrics under these conditions highlight the
competitive advantage of our advice-led business model. Total assets under
management increased by 15.9% to R435.7 billion, comprising assets managed by PSG
Wealth of R379.1 billion (16.4% increase) and PSG Asset Management of R56.6 billion
(12.4% increase), while PSG Insure's gross written premium amounted to R3.7 billion
(10.3% increase). Performance fees constituted 6.0% (2023: 2.5%) of headline
earnings.
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 20% (these costs continue
to be fully expensed), while our fixed remuneration cost grew by 14%. These factors had
a muted impact on our operating margins. We are proud of the progress made in
growing our own talent, with 77 newly qualified graduates having joined during the six-
month period.
PSG's key financial performance indicators for the six months ended 31 August 2024 are
shown below.
31 Aug 24 Change 31 Aug 23
R'000 % R'000
Core income 3 344 570 15.5 2 896 881
Headline and recurring headline earnings 609 500 26.5 481 861
Non-headline items 1 469 545
Earnings attributable to ordinary shareholders 610 969 26.7 482 406
Divisional recurring headline earnings
PSG Wealth 354 684 13.3 312 911
PSG Asset Management 157 565 57.3 100 186
PSG Insure 97 251 41.4 68 764
609 500 26.5 481 861
Weighted average number of shares in issue
(net of treasury shares) (millions) 1 265.2 (1) 1 280.3
Earnings per share (basic) (cents)
– Headline and recurring headline 48.2 28.0 37.6
– Recurring headline (excluding intangible asset 51.2 26.6 40.4
amortisation cost)
– Recurring headline (excluding performance fees) 45.3 23.4 36.7
– Attributable 48.3 28.2 37.7
Dividend per share (cents) 17.0 25.9 13.5
Return on equity (ROE) (%) 26.2 22.5
Capital management
PSG's capital cover ratio remains strong at 286%1 (2023: 240%) based on the latest
insurance group return. This comfortably exceeds the minimum regulatory requirement of
100%. Following discussions with the Prudential Authority, refinements were made to our
required capital calculation resulting in an increased capital cover ratio. These
refinements include applying Basel regulations instead of the equity symmetric formula
which we believe is more suitable for our margin and credit lending activities. During
August 2024, Global Credit Rating Company affirmed the group's long-term and short-
term credit ratings at A+(ZA) and A1(ZA) respectively, with a Positive 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 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 11.2 million shares at a cost of R181.0
million during the period as part of shareholder capital optimisation.
• Our shareholder investable assets' exposure to equity increased to 9% (6% in the
comparable period). We continue to monitor investment markets and will gradually
increase our value at risk exposure to align with our long-term target.
1This is the adjusted solvency capital requirement (SCR) ratio after applying methodology
refinements; the ratio on a comparable basis to the prior year would have been 248%.
2. INTERIM DIVIDEND DECLARATION
Considering the strong cash position, the board declared an interim gross dividend of 17.0
ZAR cents per share from income reserves for the period ended 31 August 2024 (2023:
13.5 ZAR cents per share). The group's dividend pay-out ratio remains 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 13.6 ZAR cents (2023: 10.8 ZAR cents) per share. The number of issued
ordinary shares is 1 268 686 847 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 Thursday, 17 October 2024
Last day to trade cum dividend Tuesday, 5 November 2024
Trading ex-dividend commences Wednesday, 6 November 2024
Record date Friday, 8 November 2024
Date of payment Monday, 11 November 2024
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 may not be dematerialised or rematerialised between Wednesday, 6
November 2024 and Friday, 8 November 2024, both days inclusive.
3. LOOKING FORWARD
PSG is a proudly South African firm that believes in the power of its citizens to find
solutions to the country's problems, and in their ability to ignite its untapped potential.
Nevertheless, continued low levels of economic growth remains a seemingly intractable
problem, resulting in stagnated economic development which in turn exacerbates social
issues such as crime and corruption.
The South African economy recently experienced less disruption from load shedding and
saw a slight improvement in gross domestic product (GDP) growth during the period under
review. The market reacted positively to the formation of the Government of National Unity
(GNU) following the recent national elections. This may be indicative of cautious optimism
about improving consumer and business confidence in the country. However, uncertainty
remains and clear signals are needed to show that sustainable economic growth will be
prioritised. Policy reform and a legislative agenda that is conducive to economic growth
are sorely needed. The process should include thorough social and economic impact
studies, to allow for the practical financial implications of the policy choices to be
discussed with the various stakeholders.
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.
Moreover, the firm has aimed to stimulate debate about improving South Africa's
economic prospects through the Think Big SA competition, run in collaboration with
Economic Research South Africa. We would like to thank everyone who participated in
the competition and to congratulate the winners again (details are available at
www.psg.co.za). While we were impressed by the quality of submissions, we understand
that our economic and societal challenges will not be resolved quickly. Therefore, we will
continue to monitor local and global events and the associated impact on the group's
clients and other stakeholders, and will adjust our approach if required.
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/2024/JSE/ISSE/KST/PSGH12025.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/PSGH12025.pdf.
Any investment decisions by investors and/or shareholders should be based on
consideration of the Full Announcement, as a whole.
Tyger Valley
17 October 2024
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: 17-10-2024 11:15:00
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