PSG Konsult delivers 23% increase in HEPS in H1 results

Cape Town - PSG Konsult has announced that in its last trading six months ended 31 August 2021, it had increased recurring headline earnings per share by 23% and generated a return on equity of 22%, thereby delivering a result which is circa 30% above its most recent pre-COVID interim period ended 31 August 2019. 

In a statement released on 7 October 2021, the Group said these results reflect its continued improvement in its overall competitive market position, further explaining that its strategic objective of being an advice-led firm, with a strong focus on technology to enhance client experience, enabled it to achieve these results despite prevailing conditions. In support of the group’s long-term business objective to grow its own talent, it has continued to make significant investments in newly qualified graduates.

Capital management and dividend 

PSG Konsult said its capital cover ratio increased to 233% (2020: 208%), based on the latest insurance group return, and comfortably exceeds the 100% minimum. “Our financial performance and prudent approach to investing shareholder assets continue to ensure that the group is in a strong financial position with excellent liquidity. The group’s long-term credit rating was upgraded by Global Credit Rating Company during July 2021 to A+(ZA), while the short-term credit rating was affirmed at A1(ZA), with a Stable Outlook. 

The increase in the group’s capital cover ratio and the credit rating upgrade underscores our ability to incrementally improve our financial position and highlight the group’s resilience, notwithstanding the current economic environment. PSG Konsult continues to generate strong cash flows which gives us various options to optimise our capital structure and risk-adjusted returns to shareholders.” 

The Group said during the period, it repurchased and canceled 7.2 million shares at a cost of R80.4 million, and its board decided to declare an interim gross dividend of 10.0 cents per share from income reserves for the six months ended 31 August 2021 (2020: 8.0 cents per share) reflecting the group’s strong financial position and confidence in its prospects. The group further explained that its dividend pay-out ratio remains between 40% to 50% of full-year earnings. 

It said it had however changed the basis of the pay-out ratio to recurring headline earnings excluding intangible asset amortisation, a metric that it deems better aligned to the group’s cash generated earnings. 

Looking forward 

The group said it remains confident about the prospects for growth, with a focus on organic growth and optimising shareholder returns. “We will continue to monitor local and global events, and the associated impact on our clients and other stakeholders”.