Chief executive Piet Mouton said despite the country facing a difficult environment after being downgraded by two ratings agencies, the group would continue to invest in the country as it was well positioned to withstand the strong economic headwinds that might come with a downgrade.
“We will see how it plays, but it is not quantifiable at this stage how the downgrade will affect business in the country. The financial services sector was not as badly affected as at the recall of the former finance minister Nhlanhla Nene in December 2015. It looks like the market expected the downgrade,” said Mouton.
However, Mouton cautioned that the country might struggle to attract foreign investment and create jobs.
“That has the potential of having an effect on some of PSG’s investments as the group has a diverse portfolio of investments. We need corporates to invest so that jobs can be created and grow the economy, that would be difficult to achieve with the downgrade,” he added.
The group has invested in growing companies like Capitec Bank, Curro Holdings, PSG Konsult and Zeder Investments, which all reported excellent results recently.
“There are exciting developments we want to unveil in the year ahead. We want to unbundle the tertiary business in Curro Holdings, but we are going to make announcements during the course of the year. But importantly we are going to invest in growing industries," said Mouton.
The group announced its year-end results to end February where it reported a 29percent increase in the sum-of-the-parts (SOTP) value per share and 18percent increase in recurring headline earnings per share.
Yesterday, the group said the SOTP value - 90 percent of which is calculated using JSE-listed share prices and other investments - was included at market-related valuations, amounted to R240.87, up from R186.67 a PSG Group share at February 28, 2017.
At April 11, 2017, the SOTP value was R240.53 a share.
PSG Group’s consolidated recurring headline earnings, reflecting the sum of its effective interest in that of each of its underlying investments, increased to R9.27, up from R7.88 a share reported in 2016.
The board declared a final dividend of 375 cents a share, which was 25 percent higher than the 300c a share declared in 2016.
Brad Preston, chief investment officer at Mergence Investment Managers, said the results were positive and largely in line with the company’s recent trading update. “The positive surprise was the dividend per share increasing by 25 percent,” Preston said.
PSG shares rose 1.5 percent on the JSE to close at R255.