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PSG/PGFP - PSG Group/PSG Financial Services - Unaudited Interim Results for

Release Date: 14/10/2011 17:05
Code(s): JSE PGFP PSG
Wrap Text

PSG/PGFP - PSG Group/PSG Financial Services - Unaudited Interim Results for the six months ended 31 August 2011 PSG Group Limited (Incorporated in the Republic of South Africa) Registration number: 1970/008484/06 JSE share code: PSG ISIN number: ZAE000013017 ("PSG Group" or "PSG" or "the company" or "the group") PSG Financial Services Limited (Incorporated in the Republic of South Africa) Registration number: 1919/000478/06 JSE share code: PGFP ISIN number: ZAE000096079 ("PSG Financial Services") UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2011 Recurring headline earnings increased by 21,7% to 135,5 cents per share Interim dividend increased by 30,0% to 26,0 cents per share SOTP value increased by 11,8% to R52,34 per share as at 31 August 2011 RECURRING HEADLINE EARNINGS Headline earnings Number Net asset value of shares 31 Aug 31 Aug 28 Feb 31 Aug 31 Aug 31 Aug 28 Feb 2011 2010 2011 2011 2011 2010 2011 Rm Rm Rm m Rm Rm Rm Recurring 229,7 186,1 404,1 3 809,9 2 966,0 3 439,9 headline earnings Capitec 167,9 99,1 223,0 32,3 2 088,2 1 529,0 1 981,6 Bank PSG 42,5 41,7 93,9 764,4 536,6 454,5 480,8 Konsult (incl. PSG Asset Management ) Paladin 22,7 25,1 44,8 472,3 717,2 803,6 1 019,2 Capital Curro (5,1) 1,2 1,9 101,7 303,9 104,1 103,9 Holdings Zeder 53,8 50,9 109,4 415,2 1 126,2 972,1 1 073,1 Investment s PSG 22,2 28,8 22,9 Corporate (incl. PSG Capital) Management 48,9 39,0 92,4 and other fee income Operating (34,5) (24,4) (61,9) costs Taxation (6,6) (4,3) (9,5) BEE 10,1 10,1 19,9 214,6 194,8 204,5 preference share investment s Funding Perpetual (51,2) (31,7) (72,4) 11,9 (1 057,7) (769,3) (1 058,1) preference share funding Net (19,3) (20,4) (36,7) (151,3) (357,2) (426,1) interest Other 0,5 (0,2) (0,7) 10,0 5,6 38,1 Non- (54,7) 43,0 108,3 210,6 166,0 144,9 recurring headline earnings PSG 1,4 6,4 Konsult (incl. PSG Asset Management ) Paladin 3,0 62,4 93,4 Capital Zeder (17,5) (13,8) (33,1) Investment s PSG Corporate (net of taxation) Marked-to- (1,4) 8,3 26,2 247,8 139,8 141,6 market (loss)/pro fit on liquid investment portfolio Other 0,3 10,5 Funding Marked-to- (40,5) (13,9) 4,9 (37,2) (15,5) 3,3 market (loss)/pro fit on interest rate hedge mCubed 41,7 Holdings Total 175,0 229,1 512,4 4 020,5 3 132,0 3 584,8 Statistics Weighted 169,5 167,2 167,1 average number of shares in issue (million) Recurring 135,5 111,3 241,9 HEPS (cents) HEPS 103,3 137,0 306,7 (cents) OVERVIEW PSG is an investment holding company consisting of 33 underlying investments with a combined market capitalisation of R74bn that operate across industries that include financial services, banking, agriculture, education, construction, manufacturing, mining and energy saving. SUM OF THE PARTS ("SOTP") Our key valuation tool used to determine PSG`s performance is the growth in its SOTP value per share. The calculation is simple and requires limited subjectivity as 95% of the SOTP value is calculated using quoted market prices, whilst the unlisted investments are valued using market-related multiples. At 31 August 2011, the SOTP value per PSG share was R52,34, which was 11,8% higher than at 28 February 2011. At 30 September 2011, the SOTP value was R53,22 per share. SOTP - Asset/Liability 28 Feb 28 Feb 28 Feb 31 Aug % of 2009 2010 2011 2011 total Rm Rm Rm Rm assets Capitec Bank* 857 2 367 5 138 6 090 55,7 PSG Konsult** 873 948 1 206 1 177 10,8 Paladin Capital* 413 834 1 242 841 7,7 Curro Holdings* 580 5,3 Zeder Investments* 342 742 1 069 1 013 9,3 Management 216 361 350 350 3,2 fees/agreements+ Other investments 745 400 548 878 8,0 (Thembeka prefs, cash, etc)+ Total assets 3 446 5 652 9 553 10 929 100,0 Perpetual pref funding* (486) (541) (1 028) (1 013) Other debt+ (350) (539) (507) (481) Total SOTP value 2 610 4 572 8 018 9 435 Number of shares 170,5 171,8 171,3 180,2 (million) SOTP value per share 15,31 26,60 46,81 52,34 (rand) * Listed on the JSE Ltd ** Over the counter + Valuation RESULTS A continued increase in PSG`s SOTP value over the long term will depend on sustained growth in the profitability of our underlying investments. PSG thus continues to use the recurring headline earnings method to provide management and investors with a more realistic and transparent way of evaluating PSG`s earnings performance. PSG`s consolidated recurring headline earnings represent the sum of PSG`s effective interest in the recurring headline earnings of each investment. The result is that investments in which PSG or an underlying company holds less than 20% and are generally not equity accountable in terms of accounting standards, are included in the calculation of our consolidated recurring headline earnings. Marked-to-market fluctuations are excluded. PSG`s recurring headline earnings per share increased by 21,7% to 135,5 cents for the period ended 31 August 2011. This was once again primarily as a result of Capitec`s exceptional performance. PSG Konsult and Zeder managed to marginally improve on their performance in the prior year, whereas the balance of our investments had mixed fortunes. Headline earnings decreased by 24,6% to 103,3 cents per share, and attributable earnings by 30,1% to 87,4 cents per share. This was mainly as a result of a marked-to-market loss of R40,5m incurred on PSG Financial Services` interest rate hedge during the past six months as opposed to marked- to-market profits of R66,9m achieved in Thembeka`s investment portfolio of listed shares during the same period last year. CORPORATE ACTION AND INVESTING - Raised R377m in cash through the issue of 8,2m PSG Group ordinary shares at an average price of R46,09 per share. - We increased our interest in Zeder to 42,4% having invested a further R18m at an average price of R2,48 per share. - Paladin`s 77,6% interest in Curro was unbundled to Paladin shareholders with effect from 22 August 2011. PSG as a result now holds a 63,1% direct interest in Curro. - Paladin shareholders have approved the transaction whereby PSG will acquire the entire issued share capital of Paladin not already owned by PSG, being an 18,7% interest, in exchange for PSG Group ordinary shares or cash on 24 October 2011, following which Paladin will be delisted from the JSE. CAPITEC BANK (34,2%) Capitec`s unique positioning and innovative approach to retail banking gives clients control through transparent pricing and simplified products. This approach has seen the number of active clients banking with Capitec grow to 3.2m. Capitec`s retail footprint increased by 19 branches to 474 since February 2011 and another 36 new branches are planned for the remainder of the financial year. Increases in loan revenue to R2,6bn and net transaction fee income to R361m, along with an improvement in the cost-to-income ratio to 46%, resulted in earnings of R488m, a 72% year-on-year increase. Headline earnings per share increased by 53% to 520 cents as a result of the rights issue earlier in the year. Capitec`s comprehensive results for the six months ended 31 August 2011 are available at www.capitec.co.za. PSG KONSULT (71,3%) PSG Konsult, now also incorporating the PSG Asset Management group, managed to marginally increase its recurring headline earnings by 7,8% to R59.6m during the period under review. Turnover, consisting of commission and other operating income, increased by 16,5% to R675,3m, while short-term premiums administered amounted to R1,55bn on an annualized basis. Funds under administration and management increased by 18,8% to R121bn. The PSG Konsult group made a number of acquisitions during the six months under review: - Effective 1 March 2011, PSG Asset Management, which previously consisted of PSG Fund Management, PSG Alphen, PSG Tanzanite, PSG Absolute Investments and PSG FutureWealth, was amalgamated with PSG Konsult. In so doing, synergies have been created and PSG Konsult now offers a more comprehensive range of financial services. - Effective 1 May 2011, PSG Konsult acquired Equinox, an online unit trust trading platform. The transaction added approximately 9 000 clients, with assets under management of R1,9bn. - Effective 1 May 2011, PSG Konsult Corporate acquired Pleroma, a short-term insurance broker and administrator. The transaction added approximately R100m in premiums and 5 000 clients. At 31 August 2011, PSG Konsult had 222 offices (28 February 2011: 216) with 674 financial planners, short-term insurance brokers, stockbrokers and asset/portfolio managers (28 February 2011: 642). In September 2011, PSG Online won the Business Day Investors Monthly Stockbroker of the Year award. We are proud of this achievement. PSG Konsult`s comprehensive results for the six months ended 31 August 2011 are available at www.psgkonsult.co.za. PALADIN CAPITAL (81,3%) Paladin is PSG`s private equity investment company in sectors other than agriculture, food and beverages. As a wholly owned subsidiary, Paladin will continue to focus on new business opportunities following the aforementioned unbundling of Curro and buy-out of Paladin minority shareholders. Paladin`s recurring headline earnings (excluding Curro which is reported on below) decreased by 9,6% to R22,7m, mainly due to losses in its investment in the construction industry. The majority of the remaining investments in Paladin`s portfolio, however, showed an improvement in performance compared to the corresponding period last year. Further corporate action at Paladin included: - Invested R262m in Curro`s rights issue, prior to its unbundling. - Early-stage investment in Energy Partners which delivers energy savings solutions. Energy Partners has turned profitable and we are excited about the opportunities in this industry. - Sold its 44% interest in IQuad for R2,57 per share. CURRO HOLDINGS (63,1%) Curro is a provider of affordable, quality private school education in South Africa. Curro listed on the JSE Altx on 2 June 2011 to improve its access to capital and funding. The listing furthermore raised the profile of the company and enhanced the credibility of the Curro brand name. The company concluded a one-for-one rights issue during July whereby R322,4m was raised. This has strengthened Curro`s balance sheet and, in so doing, created gearing capacity to further expand the school operations in South Africa. Curro now hosts more than 5 500 learners at its 12 campuses and continues to see a range of opportunities in private school education. The market is immense and we anticipate continued growth in this industry. The company`s strategic intent is to establish a group of at least 40 campuses with 45 000 learners by 2020. Although Curro`s turnover increased by 117% to R79,3m, it made a headline loss of R7.7m for the six months ended 30 June 2011. This is as a result of new greenfield schools making losses in the initial years until such time that they have sufficient learners. We are comfortable with Curro`s growth profile (J-curve) and remain excited about its prospects. For further information on Curro and their comprehensive interim results, refer to www.curro.co.za. ZEDER INVESTMENTS (42,4%) Zeder invested a further R194,3m to increase its shareholding in existing investments during the period under review. Its investment portfolio now amounts to R2,7bn of which Kaap Agri and Capevin Holdings represent 70,8% (28 February 2011: 78,5%). Zeder`s two largest indirect investments, namely Distell and Pioneer Foods, have shown little or no earnings growth. Zeder`s recurring headline earnings and recurring headline earnings per share consequently increased by a modest 2,7% to R127,8m and 13,1 cents respectively. Pioneer Foods` results were also negatively affected as a result of the delayed price increase in the implementation of the gross profit reductions as agreed with the Competition Commission as part of the settlement reached in November 2010. The negative impact of same on Zeder`s headline earnings was R20,6m. Zeder`s SOTP value per share, calculated using the quoted market prices for all over-the-counter ("OTC") traded unlisted investments, was R2,77 per share at 31 August 2011. During the period under review, Zeder made an offer to acquire the entire issued share capital of Capespan at R2,25 per share in cash. Through the offer and market purchases, Zeder has to date managed to increase its shareholding in Capespan from 22,7% to more than 40%. We believe that the agriculture, food and beverage sectors offer rewarding long term investment opportunities. Zeder`s comprehensive results for the six months ended 31 August 2011 are available at www.zeder.co.za. PSG CAPITAL (100%) PSG Capital is the corporate finance arm of PSG Group. It is a JSE-registered sponsor and designated advisor and was ranked third in the category Sponsors Transaction and Deal Flow at the 2010 Deal Makers General Corporate Finance Annual Awards. PSG Capital advises on mergers and acquisitions, listings, restructurings, capital raisings, BEE transactions, and performs valuations and fair and reasonable opinions. It currently has 33 JSE-listed and numerous other unlisted clients. PSG Capital`s services are available at www.psgcapital.com. PSG CORPORATE (100%) PSG Corporate acts as PSG Group treasurer, allocates capital and determines and monitors the group`s gearing. It is also the appointed manager to both Zeder and Paladin. The management fees earned from these two companies during the period under review amounted to R32,9m (2010: R29,5m). PSG Corporate`s recurring headline earnings contribution amounted to R11m (2010: R10m). Cash and facilities available for reinvestment amount to R700m. PROSPECTS Our focus remains to create wealth for our shareholders by increasing both PSG`s SOTP value per share and recurring headline earnings. We remain committed to providing superior investment returns. DIVIDENDS Ordinary shares PSG Group`s policy remains to pay up to 100% of free cash flow as an ordinary dividend, of which one third is payable as an interim and the balance as a final dividend at year-end. The directors have consequently resolved to declare an interim dividend of 26 cents (2010: 20 cents) per share. The following are the salient dates for the payment of the interim dividend: Last day to trade cum dividend Friday, 28 October 2011 Trading ex dividend commences Monday, 31 October 2011 Record date Friday, 4 November 2011 Day of payment Monday, 7 November 2011 Share certificates may not be dematerialised or rematerialised between Monday, 31 October 2011, and Friday, 4 November 2011, both days inclusive. PSG Financial Services preference shares The directors of PSG Financial Services have declared a dividend of 340,27 cents per share in respect of the cumulative, non-redeemable, non- participating preference shares for the six months ended 31 August 2011, which was paid on 26 September 2011. On behalf of the board Jannie Mouton Wynand Greeff Chairman Financial director 14 October 2011 Stellenbosch Directors: JF Mouton (Chairman), PE Burton, ZL Combi, J de V du Toit, MM du Toit, WL Greeff*, JA Holtzhausen*, MJ Jooste, JJ Mouton, PJ Mouton*, CA Otto, W Theron, CH Wiese (*Executive Independent) Secretaries and registered office: PSG Corporate Services (Pty) Ltd, 1st Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600, PO Box 7403, Stellenbosch, 7599 Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg, 2001, PO Box 61051, Marshalltown, 2107 Sponsor: PSG Capital CONDENSED GROUP INCOME STATEMENT Unaudited Change Unaudited Audited
31 Aug % 31 Aug 28 Feb 2011 2010 2011 Rm Rm Rm Income Investment income (note 4) 162,7 172,2 492,2 Net fair value gains and losses 116,6 302,6 379,4 on financial instruments (note 4) Fair value adjustment to (265,0) (384,6) (650,2) investment contract liabilities (note 4) Commission and other fee income 757,9 30,0 583,2 1 290,2 Other operating income 20,2 42,3 380,2 Total income 792,4 10,7 715,7 1 891,8 Expenses Insurance claims and loss (0,5) (2,4) (0,2) adjustments Operating expenses (698,6) (557,9) (1 162,4) Total expenses (699,1) 24,8 (560,3) (1 162,6)
Share of profits of associated 249,0 267,3 524,8 companies Results of operating activities 342,3 (19,0) 422,7 1 254,0 Finance costs (59,5) (46,2) (90,7) Profit before taxation 282,8 (24,9) 376,5 1 163,3 Taxation (30,5) (54,0) (131,0) Profit for the period 252,3 (21,8) 322,5 1 032,3 Attributable to: Owners of the parent 148,1 208,9 708,4 Non-controlling interest 104,2 113,6 323,9 252,3 322,5 1 032,3 Attributable to owners of the 148,1 208,9 708,4 parent Non-headline items (note 2) 26,9 20,2 (196,0) Headline earnings 175,0 (23,6) 229,1 512,4 Earnings per share (cents) - attributable 87,4 (30,1) 125,0 424,1 - headline ("HEPS") 103,3 (24,6) 137,0 306,7 - diluted attributable 86,4 (30,3) 124,0 420,2 - diluted headline 102,2 (24,9) 136,0 303,9 - recurring headline 135,5 21,7 111,3 241,9 Dividend per share (cents) - interim 26,0 20,0 20,0 - final 47,0 26,0 30,0 20,0 67,0 Number of shares (million) - in issue (net of treasury 175,2 167,0 166,3 shares) - weighted average 169,5 167,2 167,1 - diluted weighted average 171,3 168,5 168,6 CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME Unaudite Unaudite Audited d d 28 Feb 31 Aug 31 Aug 2011 2011 2010 Rm
Rm Rm Profit for the period 252,3 322,5 1 032,3 Other comprehensive (loss)/income for (10,7) 25,0 26,2 the period Share of other comprehensive income and (7,8) 25,4 17,0 equity movements of associated companies Disposal of associated company`s share 10,1 of other comprehensive income Other (2,9) (0,4) (0,9) Total comprehensive income for the 241,6 347,5 1 058,5 period Attributable to: Owners of the parent 143,3 239,5 722,5 Non-controlling interest 98,3 108,0 336,0 241,6 347,5 1 058,5 CONDENSED GROUP STATEMENT OF FINANCIAL POSITION Unaudite Unaudite Audited d d 28 Feb
31 Aug 31 Aug 2011 2011 2010 Rm Rm Rm Assets Property, plant and equipment 507,8 304,9 410,9 Intangible assets 1 111,4 919,2 1 025,3 Investments in associated companies 5 446,2 4 740,5 5 212,3 Deferred income tax 64,3 19,8 48,4 Financial assets linked to investment 8 915,9 8 534,9 9 112,4 contracts (note 4) Other financial assets 612,8 721,5 605,7 Receivables 188,1 217,1 193,7 Current income tax assets 4,1 5,4 Cash and cash equivalents 698,0 347,9 796,1 Non-current assets held for sale 31,0 Total assets 17 579,6 15 805,8 17 410,2 Equity Ordinary shareholders` equity 4 020,5 3 132,0 3 584,8 Non-controlling interest 3 117,8 2 519,9 3 025,8 Total equity 7 138,3 5 651,9 6 610,6 Liabilities Insurance liabilities 30,3 31,0 29,9 Financial liabilities under investment 8 915,9 8 534,9 9 112,4 contracts (note 4) Other financial liabilities 845,0 1 019,5 854,9 Deferred income tax 133,5 133,6 126,4 Payables and provisions 496,7 428,9 663,6 Current income tax liabilities 19,9 6,0 12,4 Total liabilities 10 441,3 10 153,9 10 799,6
Total equity and liabilities 17 579,6 15 805,8 17 410,2 Net asset value per share (cents) 2 295 1 875 2 156 Net tangible asset value per share 1 660 1 325 1 539 (cents) CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY Unaudited Unaudited Audited 31 Aug 31 Aug 28 Feb
2011 2010 2011 Rm Rm Rm Ordinary shareholders` equity at 3 584,8 2 947,0 2 947,0 beginning of period Total comprehensive income for the period 143,3 239,5 722,5 Shares issued 376,0 Share buy-back (20,0) (20,0) Net movement in treasury shares 16,7 4,3 9,6 Share-based payment costs 1,6 3,3 6,1 Transactions with non-controlling (22,0) 6,4 2,0 interest Dividends paid (79,9) (48,5) (82,4) Ordinary shareholders` equity at end of 4 020,5 3 132,0 3 584,8 period Non-controlling interest 3 117,8 2 519,9 3 025,8 Beginning of period 3 025,8 2 263,5 2 263,5 Total comprehensive income for the period 98,3 108,0 336,0 Shares issued 71,0 Preference shares issued 202,9 501,5 Transactions with non-controlling 0,4 (35,4) (5,4) interest Acquisition of subsidiaries 39,7 39,7 Dividends and capital distributions paid (36,8) (35,1) (57,7) Preference dividend paid (40,9) (23,7) (51,8) Total equity at end of period 7 138,3 5 651,9 6 610,6 CONDENSED GROUP STATEMENT OF CASH FLOWS Unaudited Unaudited Audited
31 Aug 31 Aug 28 Feb 2011 2010 2011 Rm Rm Rm Net cash flow from operating activities (316,3) (8,5) 564,3 Net cash flow from investment activities (307,4) (267,4) (249,3) Net cash flow from financing activities 278,2 184,3 335,9 Net (decrease)/increase in cash and cash (345,5) (91,6) 650,9 equivalents Cash and cash equivalents at beginning of 1 127,3 476,4 476,4 period Cash and cash equivalents at end of 781,8 384,8 1 127,3 period * * Include the following: - Bank overdrafts (15,9) (3,4) - Clients` cash linked to investment 83,8 52,8 334,6 contracts Net cash flow from operating activities, 291,3 207,2 845,0 before movement in working capital, policyholder cash and other financial instruments Movement in working capital (206,1) (75,3) 125,4 Movement in policyholder cash (note 4) (250,8) (124,0) 157,8 Movement in other financial instruments (150,7) (16,4) (563,9) Net cash flow from operating activities (316,3) (8,5) 564,3 NOTES TO THE CONDENSED GROUP FINANCIAL STATEMENTS 1. Basis of presentation and accounting policies The condensed interim group financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the annual financial statements for the year ended 28 February 2011, which have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as well as the AC 500 standards, the requirements of the South African Companies Act of 2008, as amended, and the Listings Requirements of the JSE Ltd. The accounting policies applied in the preparation of these condensed interim group financial statements are consistent with those used in the previous financial year. No new standards, interpretations or amendments, which are relevant to the group`s operations, became effective during the period. Results of operating activities, as presented in the condensed group income statement, include share of profits of associated companies as a significant part of PSG Group`s business activity is performed through associated companies. The comparatives have been presented on a consistent basis. 2. Non-headline items Unaudite Unaudite Audited d d 28 Feb 31 Aug 31 Aug 2011 2011 2010 Rm
Rm Rm Impairment of investments in associated (20,2) (13,8) (28,8) companies Net profit on sale/dilution of 3,0 15,0 243,3 investments in associated companies Non-headline items of associated (9,9) (22,9) (18,1) companies Other 0,2 1,5 (0,4) (26,9) (20,2) 196,0 Non-headline items are shown net of taxation and non-controlling interest: Gross amount (33,1) (20,9) 311,8 Taxation (1,3) (0,4) (42,4) Non-controlling interest 7,5 1,1 (73,4) Net amount (26,9) (20,2) 196,0 3. Commitments and contingent liabilities Operating lease commitments 81,2 74,6 75,6 4. Linked investment contracts These represent PSG Asset Management Administration Services (previously PSG FutureWealth) clients` assets held under investment contracts, which are linked to a corresponding liability. The condensed group income statement impact of the returns on investment contract policy holder assets and liabilities was as follows: Investment contract policy Equity holders holders Total
31 August 2011 Rm Rm Rm Investment income 107,0 55,7 162,7 Net fair value gains and losses 163,9 (47,3) 116,6 on financial instruments Fair value adjustment to (265,0) (265,0) investment contract liabilities Net investment return before 5,9 8,4 14,3 taxation 31 August 2010 Investment income 110,2 62,0 172,2 Net fair value gains and losses 297,2 5,4 302,6 on financial instruments Fair value adjustment to (384,6) (384,6) investment contract liabilities Net investment return before 22,8 67,4 90,2 taxation 28 February 2011 Investment income 365,1 127,1 492,2 Net fair value gains and losses 296,5 82,9 379,4 on financial instruments Fair value adjustment to (650,2) (650,2) investment contract liabilities Net investment return before 11,4 210,0 221,4 taxation 5. Segmental reporting The group is organised into six reportable segments, namely: Capitec, Zeder, Paladin, Curro, PSG Konsult (incl. PSG Asset Management following its amalgamation) and PSG Corporate. These segments represent the major investments of the group. The services offered by PSG Konsult consist of financial advice, stock broking and fund management, while Curro offers private education services. The other segments offer financing, banking, investing and corporate finance services. All segments predominantly operate in the Republic of South Africa. Income and intersegment income comprise total income per the condensed group income statement. Recurring headline earnings are calculated on a see-through basis, and include the proportional headline earnings of underlying investments, excluding marked-to-market adjustments and one-off items. Incom Inter- Recurring Non- Headline Net asset e segment headline recurring earnings value income earnings headline earnings
Rm Rm Rm Rm Rm Rm Six months ended 31 August 2011 Capitec * 4,5 167,9 167,9 2 088,2 PSG Konsult 694,2 42,5 1,4 43,9 536,6 Paladin 15,4 22,7 3,0 25,7 717,2 Curro 79,3 (5,1) (5,1) 303,9 Zeder 21,7 53,8 (17,5) 36,3 1 126,2 PSG Corporate 6,1 (34,4) 17,9 (1,1) 16,8 484,6 Net fee income 7,8 0,3 8,1 22,2 ** Unit trust, (1,4) (1,4) 247,8 hedge fund and share investments BEE 10,1 10,1 214,6 investments Funding 6,9 (1,3) (70,5) (40,5) (111,0) (1 246,2) Other *** 0,5 0,5 10,0 Total 828,1 (35,7) 229,7 (54,7) 175,0 4 020,5 Non-headline (26,9) items Attributable 148,1 earnings * Equity accounted ** Net fee income is after deduction of salaries, operating expenses and tax *** Consists mainly of the investment in Propell Income Inter- Recurring Non- Headline Net segment headline recurring earnings asset income earnings headline value earnings
Rm Rm Rm Rm Rm Rm Six months ended 31 August 2010 Capitec * 99,1 99,1 1 529,0 PSG Konsult 696,9 (32,9) 41,7 41,7 454,5 Paladin 28,8 25,1 62,4 87,5 803,6 Curro 12,7 1,2 1,2 104,1 Zeder 17,7 50,9 (13,8) 37,1 972,1 PSG Corporate 17,2 (29,5) 20,4 8,3 28,7 347,9 Net fee 10,3 10,3 28,8 income ** Unit trust, 8,3 8,3 124,3 hedge fund and share investments BEE 10,1 10,1 194,8 investments Funding 7,7 (2,9) (52,1) (13,9) (66,0) (1 126,5)
Other *** (0,2) (0,2) 47,3 Total 781,0 (65,3) 186,1 43,0 229,1 3 132,0 Non-headline (20,2) items Attributable 208,9 earnings * Equity accounted ** Net fee income is after deduction of salaries, operating expenses and tax *** Consists mainly of the investments in mCubed Holdings and Propell Income Inter- Recurring Non- Headlin Net segment headline recurring e asset income earnings headline Earn- value
earnings ings Rm Rm Rm Rm Rm Rm Year ended 28 February 2011 Capitec * 22,0 223,0 223,0 1 981,6 PSG Konsult 1 359,6 (76,0) 93,9 6,4 100,3 480,8 Paladin 294,2 44,8 93,4 138,2 1 019,2 Curro 38,8 1,9 1,9 103,9 Zeder 135,5 109,4 (33,1) 76,3 1 073,1 PSG Corporate 168,2 (61,2) 40,2 26,1 66,3 372,3 Net fee income 21,0 21,0 22,9 ** Unit trust, (0,7) 26,1 25,4 144,9 hedge fund and share investments BEE 19,9 19,9 204,5 investments Funding 17,1 (6,4) (109,1) 4,9 (104,2) (1 484,2)
Other *** 10,6 10,6 38,1 Total 2 035,4 (143,6) 404,1 108,3 512,4 3 584,8 Non-headline 196,0 items Attributable 708,4 earnings * Equity accounted ** Net fee income is after deduction of salaries, operating expenses and tax *** Consists mainly of the investments in m Cubed Holdings and Propell 6. PSG Financial Services PSG Financial Services is a wholly owned subsidiary of PSG Group, except for the 11 885 206 preference shares which are listed on the JSE Ltd. No separate financial statements are presented for PSG Financial Services as it is the only asset of PSG Group. 7. Business combinations 7.1 PSG Konsult and PSG Asset Management amalgamation On 1 March 2011, PSG Konsult and PSG Asset Management amalgamated by means of a transaction whereby PSG Konsult acquired 100% of the shares in PSG Asset Management plus the asset managers` shares in their respective businesses, with the exception of the non-controlling interest in PSG Asset Management`s hedge fund business, PSG Absolute Investments. This arrangement constituted a common control transaction. 7.2 Equinox On 1 May 2011 the group, through PSG Asset Management (being a subsidiary of PSG Konsult), acquired the business of this online unit trust trading platform for R23,9m. Net identifiable assets acquired amounted to R14,1m with goodwill amounting to R9,8m. 7.3 Pleroma On 1 May 2011 the group, through PSG Konsult Corporate (being a subsidiary of PSG Konsult), acquired the business of this short-term insurance broker and administrator for R31m. Net identifiable assets acquired amounted to R10m with goodwill amounting to R21m. UNAUDITED CONDENSED GROUP FINANCIAL STATEMENTS These unaudited condensed group financial statements were compiled under the supervision of PSG Group`s financial director, Mr WL Greeff, who is a Chartered Accountant (SA). These results are available at www.psggroup.co.za Date: 14/10/2011 17:05:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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