Wrap Text
PSG GROUP LIMITED
AUDITED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2000
- HEADLINE EARNINGS INCREASED BY 101% TO R164,7 MILLION
- HEADLINE EARNINGS PER SHARE INCREASED BY 40% TO 120,6 CENTS PER SHARE
- RETURN ON EQUITY IMPROVED FROM 14,0% TO 19,1%
GROUP INCOME STATEMENT
2000 CHANGE 1999
R'000 % R'000
INCOME
NET INTEREST INCOME 216 549 55 546
INVESTMENT INCOME 136 210 46 177
OTHER OPERATING INCOME 267 208 172 305
TOTAL INCOME 619 967 126 274 028
EXPENSES
OPERATING EXPENSES 315 520 129 137 828
NET INCOME FROM NORMAL OPERATIONS 304 447 124 136 200
FINANCING COSTS 18 088 -
INCOME FROM ASSOCIATED COMPANIES 18 737 14 066
EXCEPTIONAL ITEMS - 20 684
NET INCOME BEFORE TAXATION 305 096 78 170 950
TAXATION 51 229 37 610
NET INCOME OF THE GROUP 253 867 90 133 340
ATTRIBUTABLE TO OUTSIDE SHAREHOLDERS 89 122 36 626
ATTRIBUTABLE TO ORDINARY SHAREHOLDERS 164 745 70 96 714
EARNINGS PER SHARE (CENTS)
- HEADLINE EARNINGS 120,6 40 85,9
- ATTRIBUTABLE TO ORDINARY SHAREHOLDERS 120,6 19 101,3
DISTRIBUTION PER SHARE (CENTS)
- DIVIDEND 12,0 10,0
- CAPITAL 24,0 15,0
TOTAL 36,0 44 25,0
NUMBER OF SHARES ('000)
- IN ISSUE 139 500 95 445
- WEIGHTED AVERAGE 136 613 95 445
DETERMINATION OF HEADLINE EARNINGS
- ATTRIBUTABLE TO ORDINARY SHAREHOLDERS 164 745 70 96 714
- EXCEPTIONAL ITEMS (NET OF
OUTSIDE SHAREHOLDERS) - 14 683
HEADLINE EARNINGS 164 745 101 82 031
GROUP BALANCE SHEET
2000 1999
R'000 R'000
ASSETS
FIXED ASSETS 48 419 23 944
INVESTMENT IN ASSOCIATES 12 510 297 412
OTHER NON-CURRENT ASSETS 358 816 122 667
CASH AND SHORT-TERM FUNDS 1 029 856 951 215
OTHER CURRENT ASSETS 1 824 887 692 248
3 274 488 2 087 486
INVESTMENTS OF ASSURANCE
SUBSIDIARIES 10 932 044 456 457
14 206 532 2 543 943
LIABILITIES
LONG-TERM LIABILITIES 25 583 -
DEFERRED TAXATION 1 704 -
ACCOUNTS PAYABLE AND
OTHER LIABILITIES 447 894 207 072
LOANS AND DEPOSITS 849 772 894 797
SHORT-TERM BORROWINGS 94 362 -
1 419 315 1 101 869
SHAREHOLDERS' AND
POLICYHOLDERS' FUNDS
ORDINARY SHAREHOLDERS' FUNDS 1 085 294 638 359
OUTSIDE SHAREHOLDERS' FUNDS 770 672 325 564
3 275 281 2 065 792
POLICYHOLDERS' FUNDS 10 931 251 478 151
14 206 532 2 543 943
NET ASSET VALUE PER SHARE (CENTS) 778 669
RETURN ON EQUITY (%) 19,1 14,0
NOTE
- THE SIGNIFICANT INCREASE IN LIFE ASSURANCE FUNDS, AND THEREFORE ASSETS OF THE
GROUP, REFLECT SINGLE PREMIUM INCOME EMANATING FROM PSG LIFE LIMITED IN
ASSOCIATION WITH PSG ESCHER INVESTMENTS (PTY) LIMITED, SAME BEING FUNDS UNDER
ADMINISTRATION.
REVIEW
FINANCIAL
THE BOARD IS PLEASED TO REPORT ON A SUCCESSFUL YEAR FOR PSG AND ITS
SUBSIDIARIES, ESPECIALLY IN VIEW OF THE VOLATILE MARKETS EXPERIENCED AS WELL AS
THE UNCERTAINTIES RAISED BY THE Y2K PHENOMENON.
HEADLINE EARNINGS INCREASED BY 101% TO R164,7 MILLION AND HEADLINE EARNINGS PER
SHARE BY 40% TO 120,6 CENTS PER SHARE. PSG'S BALANCE SHEET REMAINS STRONG, IS
WELL CAPITALISED AND STILL PROVIDES THE BASIS FOR FURTHER GROWTH AND EXPANSION.
TOTAL ASSETS, INCLUSIVE OF THE ASSURANCE FUNDS, INCREASED TO R14,2 BILLION WITH
NET TANGIBLE ASSET VALUE AT 778 CENTS PER SHARE, AN INCREASE OF 16% FROM THE
PREVIOUS YEAR.
THE TOTAL DISTRIBUTION TO SHAREHOLDERS FOR THE PAST FINANCIAL YEAR AMOUNTS TO
36 CENTS PER SHARE, AN INCREASE OF 44% ON THE PREVIOUS YEAR.
DIVISIONAL CONTRIBUTION TO HEADLINE EARNINGS RM
PSG INVESTMENT BANK HOLDINGS 125,1
KEYNES RATIONAL 16,1
PSG INVESTMENT SERVICES 9,0
PSG CHANNEL HOLDINGS 8,6
CORPORATE 5,9
164,7
DIVISIONAL
- PSG INVESTMENT BANK HOLDINGS LIMITED ("PSG INVESTMENT BANK") PERFORMED AHEAD
OF ITS BUDGET SET OUT AT THE TIME OF ITS LISTING ON THE JSE ON 2 AUGUST 1999.
ITS PROFITS AFTER TAX WERE R211 MILLION AND IT CONTRIBUTED 76% OF PSG GROUP'S
PROFITS, A SIGNIFICANT ACHIEVEMENT HAVING REGARD TO THE UNSETTLED AND VOLATILE
MARKETS IN WHICH PSG INVESTMENT BANK OPERATED, ESPECIALLY DURING THE LAST
QUARTER OF 1999. PSG INVESTMENT BANK MANAGED ITS AFFAIRS WELL AND WAS ABLE TO
EMERGE STRONGER IN SPITE OF THE UNCERTAINTIES WHICH AFFECTED SMALLER BANKS.
PSG INVESTMENT BANK TOOK EFFECTIVE CONTROL OF THE BUSINESS BANK ("TBB") ON 1
MARCH 2000. IT IS EXPECTED THAT THIS TRANSACTION WOULD CONTRIBUTE TO PSG
INVESTMENT BANK'S PROFITS DURING THE CURRENT YEAR.
PSG INVESTMENT BANK IS WELL CAPITALISED WITH A CURRENT CAPITAL ADEQUACY RATIO
OF 55% WHICH IS OF GREAT IMPORTANCE DURING A PERIOD OF INDIFFERENT CONFIDENCE
IN THE BANKING SECTOR, AS EXPERIENCED IN THE LAST QUARTER OF 1999, BUT DOES
IMPACT NEGATIVELY ON THE ROE IN THE SHORTER TERM. THE BOARD AND MANAGEMENT ARE
CONFIDENT THAT THIS CAPITAL POSITION WILL BE MORE FULLY EMPLOYED IN FUTURE.
THE 20% INTEREST IN TELJOY WAS SOLD DURING THE YEAR AND A SUBSTANTIAL EXCESS
WAS REALISED. THE AFFAIRS OF VELOCITY HOLDINGS WERE RE-ORGANISED IN ORDER TO
GIVE THE MANAGEMENT OF THAT CONCERN A DIRECT INTEREST OF 49% IN THE OPERATING
ACTIVITIES. PROGRESS HAS BEEN MADE BY THAT MANAGEMENT TEAM AND ASSETS UNDER
MANAGEMENT IS APPROACHING R1 BILLION.
THE CHANGES CONTEMPLATED IN THE RECENT BUDGET SHOULD NOT HAVE A MATERIAL EFFECT
ON THE ONGOING BUSINESS OF THE BANKING GROUP.
- PSG INVESTMENT SERVICES (PTY) LIMITED ("PSGIS") CONTINUED TO CONSOLIDATE ITS
ACTIVITIES IN STOCKBROKING, UNIT TRUSTS, ASSET MANAGEMENT, PORTFOLIO MANAGEMENT
AND INDEPENDENT FINANCIAL CONSULTING. THE TOTAL FUNDS UNDER MANAGEMENT IN PSGIS
EXCEEDED R5BILLION.
PSGIS HAS INVESTED SUBSTANTIALLY IN CREATING ITS DISTRIBUTION NETWORK THROUGH
THE ESTABLISHMENT AND EXPANSION OF PSG ONLINE, PSG INDEPENDENT CONSULTING, PSG
PRIVATE ASSET MANAGEMENT AND PSG KONSULT, THROUGH ITS 55 OFFICES NATIONWIDE.
PSG ONLINE, THE INTERNET STOCKBROKER, TRADED SUCCESSFULLY AND HAS COMMENCED
CONTRIBUTING TO PROFITS. THE ACTIVITIES OF PSG ONLINE HAVE BEEN FULLY MERGED
WITH THOSE OF PSG SECURITIES (THE STOCKBROKER) IN ORDER TO ESTABLISH A VIABLE
PLATFORM FOR E-COMMERCE WITHIN PSGIS AND ENHANCING THE DISTRIBUTION OF ALL THE
FINANCIAL PRODUCTS THROUGH THIS INTERNET PORTAL AIMED AT THE INDIVIDUALS IN
THIS DIVISION'S TARGET MARKET.
PSG UNIT TRUSTS, CONSISTING OF SIX LOCAL AND TWO INTERNATIONAL FUNDS,
EXPERIENCED FURTHER GROWTH WITH TOTAL FUNDS OF R700 MILLION UNDER MANAGEMENT AT
YEAR-END.
- PSG CHANNEL HOLDINGS LIMITED ("PSG CHANNEL") TRADED WELL AHEAD OF ITS BUDGETS
IN TERMS OF BOTH GROWTH AND PROFITABILITY. PSG CHANNEL HAS NOW ESTABLISHED
ITSELF AS A SIGNIFICANT PLAYER IN THE REMUNERATION, EMPLOYEE BENEFITS AND
MULTI-MANAGER FIELDS AND IS CONTINUOUSLY EXPANDING IN THIS MARKET.
PSG CHANNEL MANAGEMENT SERVICES EXPERIENCED SOME TEETHING PROBLEMS DURING THE
SETUP PERIOD, BUT WITH MEMBERS UNDER ADMINISTRATION NOW APPROACHING 50 000,
THIS COMPANY HAS EXCITING PROSPECTS. PSG MATRIX CONSULTANTS, CONSISTING OF 13
DIFFERENT PROFESSIONAL PRACTICES, IS NOW WELL ESTABLISHED AND ITS CONSULTING
DIVISIONS, INCLUDING HEALTH, COMPENSATION AND ACTUARIAL, HAVE MADE AN
ENCOURAGING CONTRIBUTION TO PROFITS. MAJOR GROWTH IS EXPECTED FROM THIS
DIVISION.
PSG ESCHER INVESTMENTS PERFORMED EXTREMELY WELL AND HAS INCREASED ITS ASSETS
UNDER MANAGEMENT TO R12 BILLION. PSG ESCHER INTENDS TO LIST ITS SHARES ON THE
JSE TOWARDS THE MIDDLE OF THIS YEAR AND IT IS EXPECTED THAT PSG GROUP
SHAREHOLDERS WOULD BE AFFORDED THE OPPORTUNITY TO PARTICIPATE IN THIS NEW
LISTING. THIS COMPANY HAS ALSO ESTABLISHED ITSELF IN THE UNITED KINGDOM WITH
THE ACQUISITION OF ESCHER (UK) ASSET MANAGERS (PREVIOUSLY SUPERFLEX) FROM
WILLIAM M MERCER. THIS MULTI-MANAGER WOULD OPERATE FROM LONDON IN ASSOCIATION
WITH INTERNATIONAL CONSULTANTS WILLIAM M MERCER AND THE WINTERTHUR LIFE
COMPANY, A SUBSIDIARY OF CREDIT SUISSE.
PSG LIFE LIMITED, INCORPORATED ON 19 AUGUST 1999 AS AN INVESTMENT UNDERWRITER,
NOW FORMS PART OF THIS GROUP. THIS ASSURER HAS BEEN PROFITABLE SINCE INCEPTION.
- KEYNES RATIONAL LIMITED WAS FORMED DURING THE PERIOD UNDER REVIEW BY
ACQUIRING PSG GROUP'S INTERESTS IN BOTH PSG ANCHOR LIFE LIMITED AND PSG
SPECIALISED LENDING (PTY) LIMITED TRADING AS FINAID, SMARTFIN AND ANCHORFIN.
THIS COMPANY PROVIDES A FULL RANGE OF FINANCIAL SERVICES INCLUDING LIFE
ASSURANCE AND MICROBANKING TO THE UNDER SERVICED SECTORS OF THE ECONOMY.
KEYNES RATIONAL HAS SUCCESSFULLY RAISED EQUITY AND CONVERTIBLE INSTRUMENTS OF
R190 MILLION WITH SHAREHOLDERS' EQUITY NOW IN THE ORDER OF R500 MILLION. IT IS
THEREFORE WELL POSITIONED FOR GROWTH AND EXPANSION IN ITS TARGET MARKETS
DESPITE CURRENT REGULATORY UNCERTAINTY CONCERNING THE FUTURE OF THIS INDUSTRY.
ALTHOUGH ITS ACTIVITIES HAVE EXPANDED RAPIDLY, MANAGEMENT IS CAREFULLY MANAGING
SUCH EXPANSION ESPECIALLY HAVING REGARD TO THE RISK PROFILE IN THIS MARKET.
A SIGNIFICANT PROFIT CONTRIBUTION IS EXPECTED FROM THIS DIVISION IN FUTURE
YEARS.
YEAR 2000
THE ADVENT OF Y2K HAD NO IMPACT ON PSG GROUP NOR ANY OF ITS DIVISIONS.
STRATEGY, GOALS AND PROSPECTS
- THE BOARD OF PSG IS CONFIDENT OF FUTURE GROWTH AND HAS SET THE FOLLOWING
GOALS FOR THE PERIOD ENDING FINANCIAL YEAR 2002:
- 30% OF EARNINGS TO BE FROM OFFSHORE;
- ROE OF 20% PLUS;
- EARNINGS PER SHARE OF 200 CENTS; AND
- TO BED DOWN ALL EXISTING OPERATIONS, TO MAXIMISE BOTH THE EFFICIENCIES AND
PROFITABILITY AND TO ENSURE THAT THE MAXIMUM SYNERGISTIC AND ORGANIC GROWTH IS
ACHIEVED.
- WE HAVE A 25:25 STRATEGY, SAME BEING 25% P.A. GROWTH IN PROFITS AND AT LEAST
A 25% RETURN ON INVESTMENTS. PSG GROUP HAS BEEN ABLE TO MEASURE UP TO THE FIRST
BENCHMARK OVER THE PAST FOUR YEARS AND REMAINS CONFIDENT OF ITS ABILITY TO
CONTINUE TO DO SO IN FUTURE. THE TARGETS SET FOR THE RETURN ON ALL INVESTMENTS
SHOULD BE ACHIEVED SHORTLY.
- ALL DIVISIONS ARE BUDGETING FOR INCREASES IN PROFITS AND BARRING UNFORESEEN
CIRCUMSTANCES PSG GROUP SHOULD AGAIN EXPERIENCE ACCEPTABLE GROWTH FOR THE
COMING FINANCIAL YEAR.
DISTRIBUTION TO SHAREHOLDERS
PSG GROUP'S POLICY IS TO DISTRIBUTE APPROXIMATELY 30% OF ANNUAL PROFITS TO
SHAREHOLDERS. A CAPITAL DISTRIBUTION OF 12 CENTS PER SHARE WAS MADE TO
SHAREHOLDERS AT THE INTERIM STAGE.
THE DIRECTORS HAVE DECLARED A FINAL DIVIDEND OF 12 CENTS PER SHARE AND A
DISTRIBUTION OF 12 CENTS PER SHARE (GIVING A TOTAL OF 36 CENTS FOR THE YEAR)
PAYABLE TO SHAREHOLDERS REGISTERED IN THE BOOKS OF THE COMPANY ON 2 JUNE 2000,
PAYABLE ON 12 JUNE 2000. FULL DETAILS OF THE DISTRIBUTION ARE INCORPORATED IN A
CIRCULAR TO SHAREHOLDERS, WHICH WILL BE POSTED ON 4 MAY 2000.
ANNUAL GENERAL MEETING
THIS MEETING WILL BE HELD ON FRIDAY, 26 MAY 2000 AT 12:00 AND THE BOARD
WELCOMES SHAREHOLDERS TO ATTEND.
BY ORDER
JANNIE MOUTON CHRIS OTTO
CHAIRMAN DIRECTOR
STELLENBOSCH 10 APRIL 2000
PSG GROUP LIMITED
REGISTRATION NUMBER 1970/008484/06
SECRETARIES AND REGISTERED OFFICE
PSG CORPORATE SERVICES (PTY) LIMITED 1ST FLOOR OU KOLLEGE, 35 KERK STREET,
STELLENBOSCH, 7600
TRANSFER SECRETARIES
COMPUTERSHARE SERVICES LIMITED, 41 FOX STREET, JOHANNESBURG, 2001
DIRECTORS J F MOUTON (CHAIRMAN), L A DE WAAL, L DE WIT, J DE V DU TOIT (ALT M C
CLAASSEN), A B LA GRANGE, M S DU P LE ROUX, H H OOSTHUIZEN, C A OTTO, L M
ROUILLARD (ALT G C D MCSWEENEY), P B SCHABORT, C F TURNER, C C VAN DER MEULEN,
R J WILLIAMS (ALT W H RULE)
THESE RESULTS ARE ALSO AVAILABLE ON OUR WEBSITE: WWW.PSG.CO.ZA
Sharenet Sites 
