PSG Group warns its shareholders of an impending swing into loss
DURBAN - Listed investment holding company PSG Group yesterday warned its shareholders that it would swing into a first half loss on fair value losses in the share prices of its listed investments.
PSG said in a trading statement that it expected its headline loss to be between R14 and R14.30 for the six months to end August compared to headline earnings per share of R5.68 last year.
It said earnings per share would, however, rise between R118 and R119 from R6.39 the prior year.
“The headline loss a share is representative of mainly the fair value losses pursuant to the decrease in the share prices of PSG Group’s listed investments during the period under review while the earnings per share included a notable non-headline gain to the extent that the fair value, that is market value at Capitec’s ruling share price, of the unbundled Capitec interest exceeded its accounting carrying value as a non-current asset held for sale on the date of unbundling,” the group said.
In July, PSG shareholders approved the unbundling of 30.5 million shares or 26.4percent of the 30.7percent stake in Capitec Bank Holdings to unlock value for its shareholders.
The group’s other corporate actions included receiving a special dividend of R1.7billion following Zeder Investments’ disposal of its investment in Pioneer Food.
PSG is invested in companies like Curro Holdings, PSG Konsult and PSG Alpha.
The group also retained a minority stake of 4.3percent in Capitec for liquidity purposes and to bolster its balance sheet.
It said while its focus of value creation for its shareholders had not changed, the major corporate action had necessitated it to reassess its investment entity status in terms of international financial reporting standards (IFRS), resulting in the company being classified an investment entity in March.
The group said changes to an investment entity as per IFRS, its financial statements prepared in accordance with IFRS were no longer comparable to prior periods.
PSG’s net asset value per share at the end of August after the Capitec unbundling was R73.27, representing a decrease of 14 percent compared to R85.27 at the end of August 2019.
Its sum-of-the-part value a share was R75.86 at the end of August, declining by 20percent compared to R94.44 at the end of February.
The group expects to release its half-year results tomorrow.
PSG shares declined 2.28percent on the JSE yesterday to close at R47.25.