PSG Konsult, the wealth management group, lifted its dividend 10% to 11 cents per share in the six months to August 31 under challenging market conditions and it remains well capitalised with zero debt.
Chief financial officer Mike Smith said in an interview yesterday that their capital allocation during the period was an indication of the confidence that the group has in its future.
During the period the group also bought back some of its shares, and it spent 14% more than the same time a year before on IT and technology. It also increased its staff complement by 7%.
On the share buybacks Smith said they were able to do share buybacks considering the robust and debt-free balance sheet, and it was undertaken only during periods when there was value to be gained for shareholders.
The share price gained 0.56 percent to R10.79 yesterday afternoon, although the price has trended lower since the R12.43 it traded at a year ago.
Recurring headline earnings per share increased by 1% to 31 cents. Recurring headline earnings per share excluding intangible asset amortisation increased 2% to 33.7c per share. The gross written premium increased by 8% to R3bn.
He said top line revenue grew by 8% following Wealth net inflows (R8.3bn) and growth in Insure premiums (8%). He said the continuing strength of the insurance business was especially notable considering the claims from the KwaZulu-Natal floods, and reinsurance helped cushion the underwriting result.
Generally lower securities prices affected fees on assets under management and performance fees generated.
“We are proud of the progress made in growing our own talent, with 132 newly qualified graduates having joined the group since January 2022,” said Smith.
The capital cover ratio increased to 238% (2021: 233%) based on the latest insurance group return and exceeds the minimum regulatory requirement of 100% by a substantial margin.
The group repurchased and cancelled 14.7 million shares for R175.7m as part of shareholder capital optimisation.
“Investors evaluating prospects for the ensuing six months are reminded the comparative period included further performance fees and a release of the remaining pandemic business interruption claims provision,” the company said in a statement. Smith said they would continue to focus on their “good long-term plans” to grow the business.
BUSINESS REPORT