PSG Financial Services’ total assets under management (AUM) increased by 15% to R406.9 billion in its 2024 financial year.
The board declared a final gross dividend of 28.5 cents per share, up by 14% from the 25c declared in 2023. Following an interim dividend of 13.5 cents per share, the total dividend for the full year is 42 cents per share (2023: 36c).
Earnings attributable to ordinary shareholders rose by 9% to R1.03bn in the year, and recurring headline earnings per share rose by 11%, from 72.9 cents to 81.1 cents.
The group, which released its annual results last week, said the dividend declaration reflected its sound financial position and the board’s confidence in the company’s prospects. The group expects its dividend pay-out ratio to remain between 40% and 60% of recurring headline earnings, excluding intangible asset amortisation.
Recurring headline earnings increased by 11% to R1.033bn. Of its three wholly owned subsidiaries, PSG Wealth made the biggest contribution, 64%, to group earnings. It was followed by PSG Asset Management, at 21%, and PSG Insure (including Western National Insurance), at 15%.
Core income increased by 11% to R5.879bn.
Growth in assets under management
Assets managed by PSG Wealth were up by 16% to R355.1bn, which included R19.6bn of positive net inflows and R30bn of positive market performance.
PSG Asset Management’s AUM increased by 7% to R51.8bn, with net client inflows of R3.5bn. Assets under administration increased by 15% to R227.7bn, supported by R9.5bn of multi-managed net inflows.
Chief executive Francois Gouws said the group’s ability to secure new business in a challenging operating environment – the JSE lost 6% of its value over the period – is a marker of a healthy business with a clear strategy.
“The group’s proud track record of delivering consecutive earnings growth demonstrates the success of our advice-led business model and strong network of advisers, which is continuing to expand. This network, and its commitment to excellent client service, has helped the business gain market share and has generated significant value for shareholders over the years.”
Results by segment
PSG Wealth’s recurring headline earnings increased by 17% to R666 million. Core income increased by 12% to R3.68bn, consisting of a continued increase in management and other recurring fees, while transactional brokerage fees decreased because of lower trading activity compared to the prior year.
The number of Wealth advisers increased by 3% to 608.
PSG Asset Management’s results were impacted by a 54% decrease in performance fees, although management fees increased by 19%. Recurring headline earnings decreased by 1% to R217m.
PSG Insure’s recurring headline earnings decreased by 6% to R149.8m as catastrophe events impacted short-term insurer Western National. These included two severe floods in the Western Cape, and an earthquake and a hailstorm in Gauteng. As a result, the net underwriting margin declined from 13% to 9.7%.
Gross written premium grew by 13% to R7bn “as we continue to focus our efforts on growing our commercial lines’ business, which requires specialist adviser expertise”, the group said.
The Insure adviser force declined by 3% to 345 because of the amalgamation and consolidation of certain offices.
Continued investment and expansion
PSG said the group remains well capitalised. Its capital cover ratio, based on the latest insurance group return, was 240% (28 February 2023: 240%), which was well above the regulatory minimum of 100%.
In August 2023, Global Credit Rating Company affirmed the group’s long-term and short-term credit ratings at A+ and A1 respectively, with a stable outlook.
Gouws said the group remains confident about its strategy and will continue to invest in the business to secure its prospects for long-term growth.
Spending on technology and infrastructure increased by 13% from the previous year, and fixed remuneration costs grew by 12%.
“We have always been confident that resourceful South Africans will build a better future for themselves and their children. Nevertheless, current economic activity remains depressed, and expectations have continued to plummet to new lows. As a business, we will continue to monitor local and global events and the associated impact on the group’s clients and other stakeholders and adjust our approach if required,” Gouws said.
