Durban - Despite having to operate in an economy that is on the back foot after South Africa was recently downgraded to junk status by the two rating agencies Fitch and Standard & Poor’s (S&P), PSG Konsult, an independent financial services group, is confident that it will continue to grow its client base in the year ahead.
Chief executive Francois Gouws of PSG Konsult said a number of initiatives were in place to ensure this happened. “The group’s focus on products, platforms and client service excellence through the quality of its advice is proving to be a resilient strategy.”
Gouws said the group had made investments to withstand the difficult operating environment. “We have invested heavily in technology as the financial services sector requires companies to keep on improving in that regard. The business will reap rewards in the long-term because of this investment in our IT. We might have forsaken in making profits in the short term but we know the business will benefit from this investment.
“The primary objective of this investment is to enhance the overall client experience and to improve the scalability and efficiency of the group’s core IT dependent business processes,” added Gouws.
PSG Konsult last week received a boost from a rating agency during the period.
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Global Credit Rating (GCR) upgraded its long-term and short-term ratings during last year, to the investment grade ratings of A-(ZA) and A1-(ZA), respectively.
“PSG Konsult’s upgrade reflects its conservative balance sheet fundamentals, risk profile and sound earnings capacity. The company has been successful in executing its business plan, which has seen its business profile continue to strengthen, supported by robust growth in revenue and earnings over recent years. This has followed the well-defined strategy to refocus on core operations, which has allowed for the capturing of additional margin in the asset management and insurance businesses, albeit still anchored by its traditional, uniquely positioned advisory network,” commented GCR.
The group operates three divisions: PSG Wealth, PSG Asset Management and PSG Insure. It reported 16 percent growth in recurring headline earnings a share to 37.2 cents a share while recurring headline earnings increased by 19 percent to R486 million for the year to February.
The group also achieved 25 percent return on equity.
PSG Insure achieved recurring headline earnings growth of 70percent while PSG Asset Management’s recurring headline earnings grew by 57 percent. PSG Wealth achieved a moderate 1percent growth in recurring headline earnings due to IT costs associated with the division.