PSG Financial Services increased recurring headline earnings by 4% to R754.5 million in the six months to August, despite declines in its insurance and asset management businesses.
The group also increased its interim dividend by 10% to 22 cents per share, up from 20 cents in the same period last year.
PSG says the results were achieved in a difficult business environment, with weaker stock market conditions affecting some parts of the group.
“We achieved these results against a challenging operating backdrop, with securities market conditions much less favourable than the previous comparable period,” the group says in its interim results.
Core income, which measures income from the group’s main business activities, increased by 5% to R4.16 billion from R3.95 billion a year earlier.
Earnings per share also improved, with recurring headline earnings per share rising 5% to 60.9 cents from 58.1 cents.
PSG Wealth was the main driver of earnings growth, increasing its recurring headline earnings by 14% to R464.1 million from R407 million.
However, PSG Asset Management’s earnings fell by 5% to R188.1 million because of lower performance fees. PSG Insure recorded a 16% decline in earnings to R102.3 million, as lower investment income and storms in South Africa’s Western Cape affected its results.
Despite these challenges, the group’s total assets under management increased by 15% to R594.1 billion.
PSG Wealth managed R504.9 billion, up 12%, while assets managed by PSG Asset Management rose by 30% to R89.2 billion.
The group says its results showed “the resilience of our advice-led business model”.
Performance fees made up 1.9% of headline earnings, down from 7.3% in the previous period. Recurring headline earnings per share, excluding performance fees, increased by 11% to 59.8 cents.
This measure shows how the group performed without the additional income it receives from meeting certain investment performance targets.
However, total earnings attributable to ordinary shareholders fell by 3% to R755.1 million from R778.1 million.
The previous period included a R51 million profit from the sale of Western National Insurance Namibia to Santam Namibia.
PSG continued to invest in its business, increasing spending on technology and infrastructure by 4%. Staff remuneration costs rose by 10%, while 95 newly qualified graduates joined the group during the six-month period.
Its return on equity, which measures how effectively a company uses shareholders’ funds to generate profits, stood at 26.5%, down from 28.6% a year earlier.
The group’s capital cover ratio was 292%, well above the regulatory minimum of 100%.
PSG also bought back and cancelled eight million of its own shares at a cost of R243.3 million during the period.
The board declared an interim dividend of 22 cents per share. Shareholders subject to the full South African dividend withholding tax rate of 20% will receive 17.6 cents per share after tax.
The last day to trade PSG shares with the dividend included is 2 November.
The shares will trade without the dividend from 3 November, with payment scheduled for 9 November.
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