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PSG KONSULT LIMITED - Unaudited Results For The Six Months Ended 31 August 2015

Release Date: 07/10/2015 12:48
Code(s): KST     PDF:  
Wrap Text
Unaudited Results For The Six Months Ended 31 August 2015

PSG Konsult Limited
(Incorporated in the Republic of South Africa) 
Registration number: 1993/003941/06 
JSE share code: KST
NSX share code: KFS
ISIN code: ZAE000191417
(‘PSG Konsult’ or ‘the company’ or ‘the group’)


UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2015


Recurring headline earnings per share up 26%

Dividend per share up 10%

Assets under management up 17%

Assets under administration up 21%


COMMENTARY

PSG Konsult delivered a commendable 26% growth in recurring headline earnings per share for the six months ended 
31 August 2015. A key highlight includes the strong top-line revenue growth achieved by all divisions relative to industry 
peers. The business continues gaining market share as a result of our continuous focus on our key strategic goals and 
initiatives despite the challenging economic and market conditions during the period under review. In particular, 
PSG Wealth and PSG Asset Management achieved stellar outperformance. PSG Insure's results are also gaining positive 
momentum due to improved focus on optimising and balancing profitable new business growth.

The board of directors is especially pleased with this set of results, taking into account that the South African equity 
market delivered a relatively weaker performance. The FTSE/JSE All Share Index recorded a negative total return of 4.53% 
for the six months ended 31 August 2015, compared to a positive return of 8.68% in the comparable six-month period of 2014. 
The current overall sluggish economic growth and volatile equity market conditions, coupled with a sharp devaluation in 
the rand, are not conducive to growth. The group’s focus on client service excellence through the quality of its advice, 
products and platforms is proving resilient in these trying times. Furthermore, the business increased its marketing and 
technology spend during the period, and is on track to launch its new television marketing campaign.

PSG Wealth remains a key revenue driver for the group through its formidable financial adviser base and expanding product 
and platform business offering. Strengthening our competitive position by expanding our adviser networks through both 
organic and selected adviser acquisition growth has delivered continued positive client inflows.

PSG Asset Management remains a high-growth area and a key focus for the group. Its retail sales effort and marketing 
campaigns are proving effective in raising awareness of the PSG Asset Management brand, leading to strong retail client 
inflows. PSG Asset Management attracted net inflows of R2.6 billion during the period under review. The focus on 
generating recurring earnings is to place less reliance on performance fees, with these fees contributing 7.5% of group
headline earnings, compared to 7.0% during the prior period. 

PSG Insure continues making inroads in the highly competitive short-term insurance market, having achieved revenue growth 
of 19% compared to the prior financial period, with a focus on the quality of new business to achieve profitable growth. 
No significant catastrophe or other related events occurred during this period. Our insurance advisers, with an ongoing 
focus on growing the commercial lines’ side of the business, have managed to gain market share without compromising 
their overall client loss claim ratios. Against the backdrop of a particularly difficult industry environment, this is 
an achievement that the group is especially pleased with.

PSG Konsult’s key financial performance indicators for the six months ended 31 August 2015 are shown below:
                                     
                                                                              31 Aug 15       Change       31 Aug 14
                                                                                   R000            %            R000

Earnings attributable to ordinary shareholders                                  189 752           30         145 494
Non-headline items                                                               (2 952)           ­             (97)
Headline earnings                                                               186 800           28         145 397
Non-recurring headline earnings                                                       ­         (100)          1 914
Recurring headline earnings                                                     186 800           27         147 311

Weighted average number of shares in issue 
 (net of treasury shares) (million)                                             1 267.2            1         1 259.5

Earnings per share (cents)
­ Recurring headline                                                               14.7           26            11.7
­ Headline                                                                         14.7           28            11.5
­ Attributable                                                                     15.0           29            11.6

Dividend per share (cents)                                                          4.4           10             4.0

Assets under management (R billion)                                                 151           17             129
Assets under administration (R billion)                                             321           21             266

Divisional headline earnings
PSG Wealth                                                                      119 882           28          93 907
PSG Asset Management                                                             46 322           37          33 758
PSG Insure                                                                       20 596           16          17 732
                                                                                186 800           28         145 397

Risk Management

In light of events in the financial services industry over recent years, risk and its mitigation have become a top 
priority. It has become increasingly important to understand and manage risks to create sustainable business practices 
and returns for shareholders.

With this in mind, we continue upholding and strengthening our commitment to risk management. Consequently, proactive 
risk management is a key pillar of our risk strategy. Linked to this are our board-approved risk management plans, which 
provide an integrated risk management framework designed to meet the challenges of the changing risk environment. These 
plans also seek to ensure that business goals and objectives are properly supported by effective risk management. 

Responsibility for risk management is established at all levels within the business. PSG Konsult has adopted best 
practice monitoring and control of the group governance framework by implementing the three layers of defence governance 
model. This means that the responsibility for governance is allocated throughout the business. This includes the various 
boards, executive committees, divisional committees, legal entities, business units, managers and employees within each 
business area. The model contributes to embedding a strong risk culture in PSG Konsult, making risk part of everyone’s 
day-to-day activities. We believe this is of vital importance within risk management. 

Solvency Assessment and Management  

The Financial Services Board (FSB) classified PSG Konsult as an insurance conglomerate group, under the new Solvency 
Assessment and Management (SAM) regulations. This meant that we were required to submit a mock Own Risk and Solvency 
Assessment (ORSA) report to the FSB on 31 August 2015 to enable them to understand and evaluate our progress in meeting 
the new SAM requirements. 

The continual focus on centrally monitoring and optimising the group’s capital and cash flow management activities 
ensures that careful attention is paid to maintaining sufficient liquid capital in each of the regulated entities. 
At the same time, it ensures that capital is used appropriately to maximise shareholder returns. The financial soundness 
of each business is closely monitored, so that the group can take advantage of opportunities when they arise.

Credit rating

Global Credit Rating Company (GCR), having upgraded PSG Konsult’s long-term rating in August 2014, affirmed the 
national scale ratings assigned to PSG Konsult of BBB+(ZA) and A2(ZA), in the long term and short term respectively. 
The outlook for both ratings remained stable. GCR stated: “PSG Konsult’s position is enhanced by its well-defined 
strategy, within the complementary business lines of wealth management, asset management and insurance. PSG Konsult has 
developed robust risk management procedures to monitor the various risks facing the business, including regulatory 
compliance and counterparty risk. In addition, cash flows are monitored daily to ensure PSG Konsult can meet all its 
statutory capital and liquidity requirements across the various businesses.”

Achievements

The group is proud of the following notable milestones, achievements and industry awards:

PSG Wealth
–  Ranked as one of South Africa’s Top 3 stockbrokers in the Intellidex Stockbroker of the Year competition for the past 
   four years, obtaining third place in 2015.

–  Ranked second in the Intellidex Wealth Manager of the Year competition. It was further awarded joint first place as 
   the top wealth manager for up-and-coming professionals and successful entrepreneurs, and was ranked as a top-three 
   wealth manager preferred by clients.

PSG Asset Management
–  Top quartile investment returns were recorded across the entire domestic flagship range over one year, three years 
   and five years up to 30 June 2015, in the respective Morningstar categories.

–  As at 30 June 2015, PlexCrown ranked PSG third in its management company rankings.

–  Other PlexCrown ranking highlights include:
   * PSG Equity Fund ranked first in its South African Equity General fund category
   * PSG Balanced Fund ranked third in its subcategory

PSG Insure
–  Broker of the Year for Commercial Lines 2014 in Santam’s National Broker Awards.

–  Various PSG offices received Santam awards, ranging from bronze to diamond.

People

As at 31 August 2015, PSG Konsult had 201 offices and 2 046 employees, of which 667 were financial planners, portfolio 
managers, stockbrokers and asset managers. A further 404 were professional associates (accountants and attorneys). 
During the six months under review, 8 new advisers were appointed through a combination of organic growth and selective 
adviser book acquisitions. 

Transformation

PSG Konsult was rated as a level 6 BBBEE contributor. This is our second rating and is an improvement from our initial 
rating as a level 8 BBBEE contributor, reflecting management’s commitment to transformation within the group.

Management implemented a number of initiatives to continue driving our transformation strategy. These initiatives 
include an investment in the ASISA Enterprise Development Fund and an expansion of our existing bursary and internship 
programmes. Over the six months, the group made continued progress in its employment equity profile and transformation 
remains a key focus area.

Strategy

PSG Wealth’s overall strategy offers an innovative and holistic end-to-end client proposition. Despite an unpredictable 
economic outlook, the division will continue investing in people and technology, believing these to be key factors with 
which to grow its share of the market. The strategy to further expand and equip its adviser network will receive ongoing 
attention, relying on advisers for client feedback in the development and creation of new products and services. During 
the period, the division improved its offshore stockbroking offering to include additional foreign markets, and is on 
track to expand its offshore product offering further to include offshore unit trusts later this financial year. The 
division is also on track with the consolidation of its user interfaces. This will give clients the ability to view and 
transact both local and offshore shares, exchange traded funds and an extensive range of local and offshore unit trusts 
through a single log on. This improved user functionality, the group’s television marketing campaign and enhanced 
investor tools (planned for launch by December 2015) should further aid the division’s direct client growth strategy. 

PSG Asset Management’s strategy consists of three parts, namely investment excellence, operational efficiency, and 
effective sales and marketing initiatives. Generating the best long-term, risk-adjusted returns for investors is the 
division’s primary focus. To this end, it will continue prioritising the investment team’s performance, while managing 
operational risks and processes. Increasing brand awareness – particularly in the retail investor market – is a key focus 
area for the marketing team, allowing the division to benefit from a growing investor base.

PSG Insure provides simple and cost-effective short-term insurance solutions to chosen clients, protecting them from 
unforeseen events. Vertical integration across underwriting, administration and adviser teams underpins the focus on 
providing value-added products that meet and exceed clients’ expectations. The division continues to invest in its claims 
and administration departments. This is to build scale and unlock operational efficiencies, while freeing up valuable 
time for top-calibre advisers to focus on sales.

As each division grows, careful attention is paid to the group’s cost structure and in particular to the cost-to-income 
ratio. Building a cost-efficient and scalable business is a key priority for the board. The management team is committed 
to continuously investigating new ways in which to manage and reduce costs.

Marketing

Marketing initiatives are critical to the group’s goal of becoming a leader in the financial services industry. During 
the period under review, our specialist marketing team focused its efforts on enhancing our website, digital platforms, 
client communication and client and adviser events, to build the PSG brand within the South African market. The production 
of our television advertisement will hopefully take the group’s marketing efforts to new heights as we seek to support 
its network of financial advisers further and cement PSG Konsult’s product offering in the minds of target clients.

Information Technology (IT)

The integral role that technology plays in the daily operations of PSG Konsult cannot be understated. The scalability and 
efficiency of business functions are dependent on the state of its IT systems. For this reason, the group continually 
invests in new and innovative technologies. It also seeks to incorporate further business process automation, to reduce 
operational risk and provide real-time reporting for enhanced management decision-making. The group is confident that its 
IT strategy will create a solid foundation for future growth.

Risk and legal

Effectively managing the risks assumed by the business allows it to benefit from opportunities. The risk management team 
is moving from strength to strength as it identifies and assists in mitigating the risks the group faces relative to 
revenue contributions. The group’s risk appetite is constantly reviewed, as the level of risk taken on – particularly 
in the insurance environment – can pose a threat to its capital position. Here, the cost of reinsurance and other 
mechanisms are reviewed to ensure that risks remain within acceptable levels.

In line with the risk management plan and as reported in the group’s year-end results, PSG Asset Management made the 
decision to terminate all of its current white-label client administration and related activities. This was to reduce 
its overall operational and reputational risk exposures. This process, which has now largely been completed, will be 
finalised before year-end and will have a negligible impact on future profitability.

Effective engagement with regulators is a priority for PSG Konsult. The recent and forthcoming regulatory changes are 
expected to lead to significant changes in the way financial services companies in South Africa operate in general. The 
group endeavours to always be at the forefront in implementation of these changes. It fully supports the regulators’ 
stance on improving the transparency, cost-effectiveness and conduct of the industry.

Tax matter

Although PSG Konsult is not obliged to disclose any discussions with the South African Revenue Service (SARS), in line 
with the transparent disclosure approach that we have adopted, we wish to advise that we have had recent interactions 
with SARS on the classification and tax treatment of certain investments held by PSG Life Limited. The classification 
and treatment at the time were supported by external expert tax advice obtained prior to making these investments and 
subsequently again confirmed by independent senior council. The final outcome of these discussions is uncertain at this 
stage and SARS has not issued any revised assessment to date. The line of business in question was discontinued in 2011. 
This potential tax matter, however, has no relevance to any clients of the firm and has no material bearing on the 
company’s future projected recurring headline earnings or dividend payout policy to shareholders. Disputes of this 
nature unfortunately take time to resolve. We will however keep shareholders updated once we have greater clarity on 
the matter.

Looking forward

Our aim remains to service existing clients well and gain new clients for the firm. Current market circumstances are 
uncertain and volatility has returned to investment markets. We are however confident that we will continue to build 
our client franchise despite this market outlook. A number of initiatives are in place to ensure this happens. Focusing 
on products, platforms and client service excellence through the quality of our advice is proving to be a resilient 
strategy for PSG Konsult. 

We advised investors, when we released our year-end results, that we planned to spend an additional incremental amount 
on marketing and advertising in the 2016 financial year. The majority of this additional expense is being incurred on 
our television advertisement campaign, which is currently in production phase.

Events after reporting date

We remain committed to enhance the value proposition to our existing client base. We are pleased to announce that we 
recently concluded negotiations to acquire a 70% shareholding in DMH Associates (DMH), the leading independent wealth 
advisory firm in Mauritius. DMH was established in 2003 as an investment advisory firm providing independent expert 
advice to entrepreneurs, high-net-worth individuals and their families. DMH is licensed and regulated by the Mauritius 
Financial Services Commission and also offers corporate finance, wealth management and family office services. We see 
the company – as well as the individuals involved in the company – as a good fit for PSG Konsult. Vincent Desvaux de 
Marigny and Philippe Hardy are the founding members. They will continue to operate and run the business going forward. 
We welcome them to the PSG Konsult Group.

Dividend

The board approved and declared a gross interim dividend of 4.4 cents per share (2014: 4.0 cents per share) from income 
reserves for the six months ended 31 August 2015. This is in line with our dividend payout policy (communicated at the 
time of listing) of distributing between 40% and 50% of recurring headline earnings as dividends (one third as an interim 
dividend and two thirds as a final dividend).

The dividend is subject to a local dividends tax rate of 15%, resulting in a net dividend of 3.74 cents per share, unless 
the shareholder is exempt from paying dividends tax or is entitled to a reduced rate in terms of the applicable double-tax 
agreement. The number of issued ordinary shares is 1 278 947 422 at the date of this declaration. PSG Konsult’s income tax 
reference number is 9550/644/07/05.

The following are the salient dates for payment of the dividend:

Last day to trade (cum dividend)                                                                 Friday, 23 October 2015
Trading ex dividend commences                                                                    Monday, 26 October 2015
Record date                                                                                      Friday, 30 October 2015
Date of payment                                                                                  Monday, 2 November 2015

Share certificates may not be dematerialised or rematerialised between Monday, 26 October 2015, and Friday, 30 October 2015, 
both days included.

The board would like to extend its gratitude to all our stakeholders, including clients, business partners, management and 
employees, for their efforts and contributions during the past six months.

On behalf of the board


Willem Theron                           Francois Gouws
Chairman                                Chief executive officer

Tyger Valley
7 October 2015

psg.co.za


Condensed consolidated statement of financial position
as at 31 August and 28 February 2015

                                                                                Unaudited     Unaudited         Audited
                                                                                31 Aug 15     31 Aug 14       28 Feb 15
                                                                                     R000          R000            R000
ASSETS
Intangible assets                                                                 876 420       889 032         859 536
Property and equipment                                                             56 827        46 202          42 273
Investment property                                                                 2 245         2 245           2 245
Investment in associated companies                                                 40 554        39 169          39 562
Investment in joint ventures                                                       13 453        12 511          12 971
Deferred income tax                                                                85 913        72 993          87 674
Equity securities (note 6)                                                        887 759       827 617       1 025 518
Debt securities (note 6)                                                        1 666 917     1 642 197       1 605 418
Unit-linked investments (note 6)                                               15 566 418    11 045 876      12 345 648
Investment in investment contracts (note 6)                                       443 883       432 825         338 208
Loans and advances                                                                126 110        97 800         116 393
Derivative financial instruments                                                   13 813        19 075          23 324
Reinsurance assets                                                                 71 183        75 139          77 413
Deferred acquisition costs                                                          2 393         1 658           1 714
Receivables including insurance receivables                                     2 737 279     1 856 752       2 133 136
Current income tax assets                                                          25 081        22 509          18 954
Cash and cash equivalents (including money market investments) (note 6)         1 015 073       469 038         972 243
Non-current assets held for sale                                                        ­             ­          17 751
Total assets                                                                   23 631 321    17 552 638      19 719 981

EQUITY
Equity attributable to owners of the parent
Stated capital                                                                  1 445 359     1 325 111       1 325 111
Treasury shares                                                                   (16 228)         (546)           (546)
Other reserves                                                                   (400 655)     (439 799)       (404 471)
Retained earnings                                                                 660 614       451 560         573 065
                                                                                1 689 090     1 336 326       1 493 159

Non-controlling interest                                                          143 406        95 085         132 491
Total equity                                                                    1 832 496     1 431 411       1 625 650

LIABILITIES
Insurance contracts                                                               577 638       502 668         574 331
Deferred income tax                                                                55 640        85 015          53 610
Borrowings                                                                        407 517       363 050         427 843
Derivative financial instruments                                                   16 410        33 846          30 749
Investment contracts (note 6)                                                  17 229 353    12 761 154      14 222 603
Third-party liabilities arising on consolidation of mutual funds                  877 844       625 462         699 202
Deferred reinsurance acquisition revenue                                            4 029         2 757           3 563
Trade and other payables                                                        2 618 743     1 723 302       2 068 400
Current income tax liabilities                                                     11 651        23 973          10 618
Non-current liabilities held for sale                                                   ­             ­           3 412
Total liabilities                                                              21 798 825    16 121 227      18 094 331

Total equity and liabilities                                                   23 631 321    17 552 638      19 719 981

Net asset value per share (cents)                                                   132.3         105.9           118.3


Condensed consolidated income statement
for the six months ended 31 August and the 12 months ended 28 February 2015

                                                                                Unaudited     Unaudited
                                                                               Six months    Six months         Audited
                                                                                    ended         ended      Year ended
                                                                                31 Aug 15     31 Aug 14       28 Feb 15
                                                                                     R000          R000            R000

Gross written premium                                                             462 590       362 974         795 237
Less: Reinsurance written premium                                                (128 875)      (98 417)       (225 293)
Net premium                                                                       333 715       264 557         569 944
Change in unearned premium
­ Gross                                                                             4 461         9 807         (34 905)
­ Reinsurers' share                                                                   (92)         (614)          3 119
Net insurance premium revenue                                                     338 084       273 750         538 158
Commission and other fee income                                                 1 233 783     1 056 475       2 138 855
Investment income                                                                 301 815       198 911         499 554
Net fair value gains and losses on financial instruments                          464 613     1 011 149       1 209 661
Fair value adjustment to investment contract liabilities                         (613 236)   (1 024 359)     (1 406 791)
Other operating income                                                             15 361        14 075          35 163
Total income                                                                    1 740 420     1 530 001       3 014 600

Insurance claims and loss adjustment expenses                                    (330 388)     (285 165)       (561 548)
Insurance claims and loss adjustment expenses recovered from reinsurers            69 012        67 849         137 173
Net insurance benefits and claims                                                (261 376)     (217 316)       (424 375)
Commission paid                                                                  (562 655)     (474 464)       (910 226)
Depreciation and amortisation*                                                    (27 692)      (26 339)        (55 422)
Employee benefit expenses                                                        (304 867)     (252 481)       (511 612)
Fair value adjustment to third-party liabilities                                  (39 988)      (79 331)        (41 525)
Marketing, administration and other expenses                                     (206 399)     (185 251)       (427 457)
Total expenses                                                                 (1 402 977)   (1 235 182)     (2 370 617)

Share of profits/(losses) of associated companies                                     992          (379)             40
Share of profits of joint ventures                                                    482           454             914
Total profit from associated companies and joint ventures                           1 474            75             954

Profit before finance costs and taxation                                          338 917       294 894         644 937
Finance costs                                                                     (48 800)      (62 459)       (119 905)
Profit before taxation                                                            290 117       232 435         525 032
Taxation                                                                          (86 422)      (75 448)       (163 234)
Profit for the period                                                             203 695       156 987         361 798

Attributable to:
   Owners of the parent                                                           189 752       145 494         340 401
   Non-controlling interest                                                        13 943        11 493          21 397
                                                                                  203 695       156 987         361 798
Earnings per share (cents)
   Attributable (basic)                                                              15.0          11.6            27.0
   Attributable (diluted)                                                            14.5          11.2            26.1
   Headline (basic)                                                                  14.7          11.5            26.9
   Headline (diluted)                                                                14.3          11.1            26.0
   Recurring headline (basic)                                                        14.7          11.7            27.0
   Recurring headline (diluted)                                                      14.3          11.3            26.1

*  Includes amortisation cost of R18.8 million (31 Aug 2014: R17.8 million; 28 Feb 2015: R37.5 million).


Condensed consolidated statement of comprehensive income
for the six months ended 31 August and the 12 months ended 28 February 2015

                                                                                Unaudited     Unaudited
                                                                               Six months    Six months         Audited
                                                                                    ended         ended      Year ended
                                                                                31 Aug 15     31 Aug 14       28 Feb 15
                                                                                     R000          R000            R000

Profit for the period                                                             203 695       156 987         361 798
Other comprehensive income for the period, net of taxation                         (4 103)         (758)            224
To be reclassified to profit and loss:
Currency translation adjustments                                                   (4 103)         (758)            224
Total comprehensive income for the period                                         199 592       156 229         362 022

Attributable to:
   Owners of the parent                                                           185 649       144 736         340 625
   Non-controlling interest                                                        13 943        11 493          21 397
                                                                                  199 592       156 229         362 022

Earnings and headline earnings per share

                                                                                Unaudited     Unaudited
                                                                               Six months    Six months         Audited
                                                                                    ended         ended      Year ended
                                                                                31 Aug 15     31 Aug 14       28 Feb 15
                                                                                     R000          R000            R000

Profit attributable to ordinary shareholders                                      189 752       145 494         340 401
Non-headline items (net of non-controlling interest and
 related tax effect)
­ Profit on disposal of intangible assets (including goodwill)                     (1 220)          (48)           (757)
­ Non-headline items of associated companies                                         (503)          (97)           (251)
­ Other                                                                            (1 229)           48            (132)

Headline earnings                                                                 186 800       145 397         339 261
­ Recurring                                                                       186 800       147 311         341 175
­ Non-recurring                                                                         ­        (1 914)         (1 914)

Earnings per share (cents)
­ Attributable (basic)                                                               15.0          11.6            27.0
­ Attributable (diluted)                                                             14.5          11.2            26.1
­ Headline (basic)                                                                   14.7          11.5            26.9
­ Headline (diluted)                                                                 14.3          11.1            26.0
­ Recurring headline (basic)                                                         14.7          11.7            27.0
­ Recurring headline (diluted)                                                       14.3          11.3            26.1

Number of shares (million)
­ in issue (net of treasury shares)                                               1 276.5       1 262.1         1 262.1
­ weighted average                                                                1 267.2       1 259.5         1 261.4


Condensed consolidated statement of changes in equity
for the six months ended 31 August and the 12 months ended 28 February 2015

                                           Attributable to equity holders of the group
                                                                                                     Non-
                                                      Treasury          Other      Retained   controlling
                                    Stated capital      shares       reserves      earnings      interest          Total
                                              R000        R000           R000          R000          R000           R000

Balance at 1 March 2014 ­ 
 Audited                                 1 134 746        (546)      (445 146)      399 487        86 222      1 174 763
Comprehensive income 
Profit for the period                            ­           ­              ­       145 494        11 493        156 987
Other comprehensive income                       ­           ­           (758)            ­             ­           (758)
Total comprehensive income                       ­           ­           (758)      145 494        11 493        156 229
Transactions with owners                   190 365           ­          6 105       (93 421)       (2 630)       100 419
Issue of ordinary shares                   190 365           ­              ­             ­             ­        190 365
Share-based payment costs                        ­           ­          6 105             ­             ­          6 105
Transactions with non-  
 controlling interest                            ­           ­              ­        (1 320)         (207)        (1 527)
Dividend paid                                    ­           ­              ­       (92 101)       (2 423)       (94 524)

Balance at 31 August 2014 ­
 Unaudited                               1 325 111        (546)      (439 799)      451 560        95 085      1 431 411

Comprehensive income
Profit for the period                            ­           ­              ­       194 907         9 904        204 811
Other comprehensive income                       ­           ­            982             ­             ­            982
Total comprehensive income                       ­           ­            982       194 907         9 904        205 793
Transactions with owners                         ­           ­         34 346       (73 402)       27 502        (11 554)
Share-based payment costs                        ­           ­          5 457             ­             ­          5 457
Capital contribution by non-
 controlling interest                            ­           ­              ­             ­        28 000         28 000
Equity-settled share-based
 payments                                        ­           ­         28 889       (22 925)            ­          5 964
Dividend paid                                    ­           ­              ­       (50 477)         (498)       (50 975)

Balance at 28 February 2015 ­            
 Audited                                 1 325 111        (546)      (404 471)      573 065       132 491      1 625 650

Comprehensive income
Profit for the period                            -           ­              ­       189 752        13 943        203 695
Other comprehensive income                       ­           ­         (4 103)            ­             ­         (4 103)
Total comprehensive income                       ­           ­         (4 103)      189 752        13 943        199 592
Transactions with owners                   120 248     (15 682)         7 919      (102 203)       (3 028)         7 254
Issue of ordinary shares                   120 248           ­              ­             ­             ­        120 248
Share-based payment cost                         ­           ­          7 919             ­             ­          7 919
Treasury shares purchased                        ­     (23 857)             ­             ­             ­        (23 857)
Treasury shares sold                             ­       8 175              ­             ­             ­          8 175
Dividend paid                                    ­           ­              ­      (102 203)       (3 028)      (105 231)

Balance at 31 August 2015 ­
 Unaudited                               1 445 359     (16 228)      (400 655)      660 614       143 406      1 832 496


Condensed consolidated statement of cash flows
for the six months ended 31 August and the 12 months ended 28 February 2015

                                                                               Unaudited      Unaudited
                                                                              Six months     Six months         Audited
                                                                                   ended          ended      Year ended
                                                                               31 Aug 15      31 Aug 14       28 Feb 15
                                                                                    R000           R000            R000

Cash flows from operating activities  
Cash (utilised in)/generated by operating activities                             (30 628)      (176 759)        232 202
Interest income                                                                  209 636        169 002         372 278
Dividend income                                                                   91 977         29 727         126 900
Finance costs                                                                    (22 922)       (20 498)        (44 118)
Taxation paid                                                                    (84 027)       (62 986)       (172 853)
Operating cash flows before policyholder cash movement                           164 036        (61 514)        514 409
Policyholder cash movement                                                        (4 883)       (36 652)        (24 380)
Net cash flow from operating activities                                          159 153        (98 166)        490 029

Cash flows from investing activities
Acquisition of intangible assets                                                 (37 394)       (22 593)        (30 473)
Purchases of property and equipment                                              (24 372)        (7 828)        (13 241)
Proceeds from disposal of non-current assets held for sale                        16 054              ­               ­
Other                                                                              6 798          2 388           4 120
Net cash flow from investing activities                                          (38 914)       (28 033)        (39 594)

Cash flows from financing activities
Dividends paid                                                                  (105 231)       (94 524)       (145 500)
Capital contributions by non-controlling interest (ordinary shares)                    ­              ­          28 000
Transactions with non-controlling interest                                             ­              ­          (1 526)
Repayment of borrowings                                                           (1 964)       (26 607)        (73 344)
Shares issued                                                                     40 520          7 476           7 476
Other                                                                            (15 682)             ­             209
Net cash flow from financing activities                                          (82 357)      (113 655)       (184 685)
    
Net increase/(decrease) in cash and cash equivalents                              37 882       (239 854)        265 750
Cash and cash equivalents at beginning of period                                 975 018        709 173         709 173
Exchange gains/(losses) on cash and cash equivalents                               2 173           (281)             95
Cash and cash equivalents at end of period*                                    1 015 073        469 038         975 018
   
Current, cheque and money market investment accounts                           1 015 073        469 038         972 243
Cash and cash equivalents classified as non-current assets held for sale               ­              ­           2 775
                                                                                 
*   Includes the following:
    Clients' cash linked to investment contracts                                  22 071         14 682          26 954
    Other client related balances                                                105 445          7 232         139 381
                                                                                 127 516         21 914         166 335

Notes to the statement of cash flow:
The movement in cash utilised/generated in operating activities can vary significantly as a result of daily fluctuations 
in cash linked to investment contracts and cash held by the stockbroking business. PSG Life Limited, the group’s linked 
insurance company, issues linked policies to policyholders (where the value of policy benefits is directly linked to the 
fair value of the supporting assets). When these policies mature, the company raises a debtor for the money receivable 
from the third-party investment provider, and raises a creditor for the amount owing to the client. A timing difference 
occurs at month-end where the money was received from the third-party investment provider, but only paid out by the 
company after month-end, resulting in significant fluctuations in the working capital of the company. Similar working 
capital fluctuations incur at PSG Securities Limited, the group’s stockbroking business, mainly due to the timing of the 
close of the JSE in terms of client settlements.

Cash flow from operating activities for the six months ended 31 August 2014 was negatively impacted by the fluctuations 
in the working capital at PSG Life Limited, as well as cash utilised during the period for the scrip lending facility at 
PSG Securities Limited. Cash held in money market investments (classified as ‘Cash and cash equivalents’ on the face of 
the statement of financial position), held by the two short-term insurance companies in the group, was also utilised in 
the period to invest in low-risk income funds which were classified as either debt securities or unit-linked investments, 
depending on the nature of the income fund invested in.


Notes to the condensed consolidated interim financial statements for the six months ended 31 August 2015

1. Reporting entity

PSG Konsult Limited is a company domiciled in the Republic of South Africa. The condensed consolidated interim financial
statements of the company as at and for the six months ended 31 August 2015 comprise the company and its subsidiaries
(together referred to as `the group') and the group's interests in associated companies and joint ventures.

2. Basis of presentation

The condensed consolidated interim financial statements are prepared in accordance with the listings requirements of the 
JSE Limited (JSE) and the requirements of the Companies Act No 71 of 2008, as amended applicable to condensed financial 
statements. The JSE requires condensed financial statements to be prepared in accordance with the framework concepts and 
the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial 
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial 
Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 ­ Interim Financial 
Reporting. The condensed consolidated interim financial statements do not include all of the information required for 
full annual financial statements and should be read in conjunction with the consolidated financial statements of the 
group as at and for the year ended 28 February 2015.

3. Preparation

These condensed consolidated interim financial statements were prepared by Stephan van der Merwe, CA(SA), under the
supervision of the chief financial officer, Mike Smith, CA(SA). Neither these condensed consolidated interim financial
statements, nor any reference to future financial performance included in this results announcement, have been reviewed 
or reported on by the company's external auditor, PricewaterhouseCoopers Inc.

4. Accounting policies

The accounting policies applied in the preparation of these condensed consolidated interim financial statements are in 
terms of IFRS and are consistent with those accounting policies applied in the preparation of the previous consolidated 
annual financial statements as at and for the year ended 28 February 2015.

The following new accounting standards and amendments to IFRSs, which were relevant to the group's operations, were
effective for the first time from 1 March 2015:

- Amendment to IAS 19 ­ Employee benefits

- Annual Improvements 2010 ­ 12 cycle

- Annual Improvements 2011 ­ 13 cycle

These revisions have not resulted in material changes to the group's reported results and disclosures in these condensed
consolidated interim financial statements.

The following new or revised IFRSs and interpretations that are applicable to the group have effective dates applicable 
to future financial years and have not been early adopted:

- IFRS 9 ­ Financial Instruments (effective 1 January 2018)

- IFRS 15 ­ Revenue from Contracts with Customers (effective 1 January 2018)

The impact of the application of these revised standards and interpretations in future financial reporting periods on 
the group's reported results, financial position and cash flows is still being assessed.

5. Use of estimates and judgements

In preparing these condensed consolidated interim financial statements, the significant judgements made by management 
in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those that 
applied to the consolidated annual financial statements for the year ended 28 February 2015.

6. Segment information

The composition of the reportable segments represents the internal reporting structure and the monthly reporting to the 
chief operating decision-maker (CODM). The CODM for the purpose of IFRS 8, Operating Segments, has been identified as 
the chief executive officer, supported by the group management committee (Manco). The group's internal reporting structure 
is reviewed in order to assess performance and allocate resources. The group is organised into three reportable segments, 
namely: 

- PSG Wealth

- PSG Asset Management

- PSG Insure

Corporate support costs refer to a variety of services and functions that are performed centrally for the individual 
business units within each business segment, and also include the group's executive office. Besides the traditional 
accounting and secretarial services provided to group divisions and subsidiaries, the corporate office also provides legal, 
risk, information technology (IT), marketing, human resources (HR), payroll, internal audit and corporate finance services. 
The strategic elements of IT, in terms of both services and infrastructure, are also centralised in the corporate office. 
The corporate costs are allocated to the three reportable segments.

6.1 Description of business segments
 
PSG Wealth, which consists of five business units ­ Distribution, PSG Securities, LISP and Life Platform, Multi-Management 
and Employee Benefits ­ is designed to meet the needs of individuals, families and businesses. Through our highly skilled 
wealth managers, PSG Wealth offers a wide range of personalised services (including portfolio management, stockbroking, 
local and offshore investments, estate planning, financial planning, local and offshore fiduciary services, multi-managed 
solutions and retirement products). Our Wealth offices are fully equipped to deliver a high-quality personal service to 
our customers.

PSG Asset Management is an established investment management company with a proven investment track record. We offer
investors a simple but comprehensive range of local and global investment products. Our products include both local and
international unit trusts.

PSG Insure, through our registered insurance brokers and PSG`s short-term insurance company Western National Insurance
Company Limited, offers a full range of tailor-made short-term insurance products and services for personal (home, car and
household insurance) and commercial (business and agri-insurance) requirements. To harness the insurance solutions available
to our customers effectively, our expert insurance specialists, through our strict due diligence process, will simplify the 
selection process for the most appropriate solution for our clients. In addition to the intermediary services we offer, 
PSG Short-Term Administration supports clients through the claim process, administrative issues and general policy 
maintenance, including an annual reappraisal of their portfolios.

The Manco considers the performance of reportable segments based on total income as a measure of growth and headline
earnings as a measure of profitability. The segment information provided to the Manco for the reportable segments for 
the period ended 31 August 2015 is set out below:
 

6.2 Headline earnings per reportable segments

                                                                            Asset
                                                                          Manage-
                                                         Wealth              ment            Insure             Total
Headline earnings                                          R000              R000              R000              R000

For the six months ended 31 August 2015 (Unaudited)
Headline earnings                                       119 882            46 322            20 596           186 800
­ recurring                                             119 882            46 322            20 596           186 800
­ non-recurring                                               ­                 ­                 ­                 ­

For the six months ended 31 August 2014(Unaudited)
Headline earnings                                        93 907            33 758            17 732           145 397
­ recurring                                              94 749            34 179            18 383           147 311
­ non-recurring                                            (842)             (421)             (651)           (1 914)

For the year ended 28 February 2015 (Audited)
Headline earnings                                       227 478            81 915            29 868           339 261
­ recurring                                             228 320            82 336            30 519           341 175
­ non-recurring                                            (842)             (421)             (651)           (1 914)


6.3 Income per reportable segment

                                                                            Asset
                                                                          Manage-
                                                         Wealth              ment            Insure             Total
Total income                                               R000              R000              R000              R000

For the six months ended 31 August 2015 (Unaudited)
Total segment income                                  1 200 924           333 170           578 569         2 112 663
Intersegment income                                    (238 724)         (133 519)                ­          (372 243)
Income from external customers                          962 200           199 651           578 569         1 740 420

For the six months ended 31 August 2014 (Unaudited)
Total segment income                                  1 072 668           282 074           484 678         1 839 420
Intersegment income                                    (200 477)         (108 672)             (270)         (309 419)
Income from external customers                          872 191           173 402           484 408         1 530 001

For the year ended 28 February 2015 (Audited)
Total segment income                                  2 146 463           587 111           979 622         3 713 196
Intersegment income                                    (461 848)         (219 347)          (17 401)         (698 596)
Income from external customers                        1 684 615           367 764           962 221         3 014 600


Other information provided to the Manco is measured in a manner consistent with that of the financial statements.


6.4  Divisional income statements
     The profit or loss information follows a similar format to the consolidated income statement.

                                                                            Asset
                                                                          Manage-
                                                         Wealth              ment            Insure             Total
                                                           R000              R000              R000              R000

For the six months ended 31 August 2015 (Unaudited)
Total income                                            962 200           199 651           578 569         1 740 420
Total expenses                                         (727 436)         (136 829)         (538 712)       (1 402 977)
                                                        234 764            62 822            39 857           337 443
Total profit from associated  
 companies and joint ventures                                 ­                 ­             1 474             1 474
Profit before finance cost and taxation                 234 764            62 822            41 331           338 917
Finance costs*                                          (47 821)             (212)             (767)          (48 800)
Profit before taxation                                  186 943            62 610            40 564           290 117
Taxation                                                (62 048)          (16 013)           (8 361)          (86 422)
Profit for the period                                   124 895            46 597            32 203           203 695

Attributable to:
  Owners of the parent                                  122 069            46 597            21 086           189 752
  Non-controlling interest                                2 826                 ­            11 117            13 943
                                                        124 895            46 597            32 203           203 695

Headline earnings                                       119 882            46 322            20 596           186 800

                               
                                                                            Asset
                                                                          Manage-
                                                         Wealth              ment            Insure             Total
                                                           R000              R000              R000              R000

For the six months ended 31 August 2015 (Unaudited)
Total income                                            872 191           173 402           484 408         1 530 001
Total expenses                                         (661 678)         (128 400)         (445 104)       (1 235 182)
                                                        210 513            45 002            39 304           294 819
Total profit from associated companies and 
 joint ventures                                               ­                 ­                75                75
Profit before finance cost and taxation                 210 513            45 002            39 379           294 894
Finance costs*                                          (59 278)             (199)           (2 982)          (62 459)
Profit before taxation                                  151 235            44 803            36 397           232 435
Taxation                                                (54 906)          (11 045)           (9 497)          (75 448)
Profit for the period                                    96 329            33 758            26 900           156 987

Attributable to:
  Owners of the parent                                   93 896            33 758            17 840           145 494
  Non-controlling interest                                2 433                 ­             9 060            11 493
                                                         96 329            33 758            26 900           156 987

Headline earnings                                        93 907            33 758            17 732           145 397

                                                                           Asset
                                                                          Manage-
                                                         Wealth              ment            Insure             Total
                                                           R000              R000              R000              R000

For the year ended 28 February 2015 (Audited)
Total income                                          1 684 615           367 764           962 221         3 014 600
Total expenses                                       (1 219 987)         (257 541)         (893 089)       (2 370 617)
                                                        464 628           110 223            69 132           643 983
Total profit from associated
 companies and joint ventures                                 ­                 ­               954               954
Profit before finance cost and taxation                 464 628           110 223            70 086           644 937
Finance costs*                                         (115 607)             (396)           (3 902)         (119 905)
Profit before taxation                                  349 021           109 827            66 184           525 032
Taxation                                               (115 019)          (27 905)          (20 310)         (163 234)
Profit for the period                                   234 002            81 922            45 874           361 798

Attributable to:
 Owners of the parent                                   228 177            81 922            30 302           340 401
 Non-controlling interest                                 5 825                 ­            15 572            21 397
                                                        234 002            81 922            45 874           361 798

Headline earnings                                       227 478            81 915            29 868           339 261

* Finance cost in the PSG Wealth division consists mainly of the finance charge on the held-to-maturity policyholder
  financial assets (linked investment business). The finance cost of R47.8 million (31 Aug 2014: R59.3 million; 28 Feb 
  2015: R115.6 million) consists of R25.9 million (31 Aug 2014: R42.0 million; 28 Feb 2015: R75.8 million) on the client-
  related linked investment business, R15.5 million (31 Aug 2014: R10.2 million; 28 Feb 2015: R25.8 million) on the loan 
  facilities provided to clients on their share portfolios at PSG Securities (secured by the underlying JSE Top 100 equity 
  securities held in excess of four times the value of the loan facilities) on which PSG Wealth receives a margin, with 
  the remaining portion of the finance charge on the CFD margin and the bank overdrafts.

6.5  Statement of financial position (client vs own)

In order to evaluate the consolidated financial position of the group, the Manco segregates the statement of financial 
position of the group between own balances and client-related balances.

Client-related balances represent the investment contract liabilities and related linked client assets of PSG Life 
Limited, the broker and clearing accounts, and the settlement control accounts of the stockbroking business, the 
collective investment schemes consolidated under IFRS 10 ­ Consolidated Financial Statements and corresponding third-party 
liabilities, the short-term claim control accounts and related bank accounts as well as the contracts for difference assets 
and related liabilities.

                                                                               Unaudited ­ as at 31 August 2015
                                                                                                              Client-
                                                                                                Own           related
                                                                            Total          balances          balances
                                                                             R000              R000              R000

ASSETS
Equity securities                                                         887 759             6 271           881 488
Debt securities                                                         1 666 917            96 839           570 078
Unit-linked investments                                                15 566 418           431 714        15 134 704
Investment in investment contracts                                        443 883                 ­           443 883
Receivables including insurance receivables                             2 737 279           243 291         2 493 988
Derivative financial instruments                                           13 813                 ­            13 813
Cash and cash equivalents (including money market investments)          1 015 073           887 557           127 516
Other assets*                                                           1 300 179         1 300 179                 ­
Total assets                                                           23 631 321         2 965 851        20 665 470

EQUITY
Equity attributable to owners of the parent                             1 689 090         1 689 090                 ­
Non-controlling interest                                                  143 406           143 406                 ­
Total equity                                                            1 832 496         1 832 496                 ­

LIABILITIES
Borrowings                                                                407 517            12 382           395 135
Investment contracts                                                   17 229 353                 ­        17 229 353
Third-party liabilities arising on consolidation of mutual funds          877 844                 ­           877 844
Derivative financial instruments                                           16 410                 ­            16 410
Trade and other payables                                                2 618 743           472 015         2 146 728
Other liabilities**                                                       648 958           648 958                 ­
Total liabilities                                                      21 798 825         1 133 355        20 665 470

Total equity and liabilities                                           23 631 321         2 965 851        20 665 470

                                                                               Unaudited ­ as at 31 August 2014
                                                                                                              Client-
                                                                                                Own           related
                                                                            Total          balances          balances
                                                                             R000              R000              R000

ASSETS
Equity securities                                                         827 617             3 505           824 112
Debt securities                                                         1 642 197           106 302         1 535 895
Unit-linked investments                                                11 045 876           473 320        10 572 556
Investment in investment contracts                                        432 825                 ­           432 825
Receivables including insurance receivables                             1 856 752           212 470         1 644 282
Derivative financial instruments                                           19 075                 ­            19 075
Cash and cash equivalents (including money market investments)            469 038           447 124            21 914
Other assets*                                                           1 259 258         1 259 258                 ­
Total assets                                                           17 552 638         2 501 979        15 050 659

EQUITY
Equity attributable to owners of the parent                             1 336 326         1 336 326                 ­
Non-controlling interest                                                   95 085            95 085                 ­
Total equity                                                            1 431 411         1 431 411                 ­

LIABILITIES
Borrowings                                                                363 050            61 252           301 798
Investment contracts                                                   12 761 154                 ­        12 761 154
Third-party liabilities arising on consolidation of mutual funds          625 462                 ­           625 462
Derivative financial instruments                                           33 846                 ­            33 846
Trade and other payables                                                1 723 302           394 903         1 328 399
Other liabilities**                                                       614 413           614 413                 ­
Total liabilities                                                      16 121 227         1 070 568        15 050 659

Total equity and liabilities                                           17 552 638         2 501 979        15 050 659


                                                                               Audited ­ as at 28 February 2015
                                                                                                              Client-
                                                                                                Own           related
                                                                            Total          balances          balances
                                                                             R000              R000              R000

ASSETS
Equity securities                                                       1 025 518             2 259         1 023 259
Debt securities                                                         1 605 418            99 614         1 505 804
Unit-linked investments                                                12 345 648           378 015        11 967 633
Investment in investment contracts                                        338 208                 ­           338 208
Receivables including insurance receivables                             2 133 136           228 588         1 904 548
Derivative financial instruments                                           23 324                 ­            23 324
Cash and cash equivalents (including money market investments)            972 243           805 908           166 335
Other assets*                                                           1 276 486         1 276 486                 ­
Total assets                                                           19 719 981         2 790 870        16 929 111

EQUITY
Equity attributable to owners of the parent                             1 493 159         1 493 159                 ­
Non-controlling interest                                                  132 491           132 491                 ­
Total equity                                                            1 625 650         1 625 650                 ­

LIABILITIES
Borrowings                                                                427 843            14 273           413 570
Investment contracts                                                   14 222 603                 ­        14 222 603
Third-party liabilities arising on consolidation of mutual funds          699 202                 ­           699 202
Derivative financial instruments                                           30 749                 ­            30 749
Trade and other payables                                                2 068 400           505 413         1 562 987
Other liabilities**                                                       645 534           645 534                 ­
Total liabilities                                                      18 094 331         1 165 220        16 929 111

Total equity and liabilities                                           19 719 981         2 790 870        16 929 111

*   Other assets consist of property and equipment, investment property, intangible assets, investment in
    associated companies, investment in joint ventures, current and deferred income tax assets, loans and advances,
    reinsurance assets, deferred acquisition costs and non-current assets held for sale.
**  Other liabilities consist of deferred reinsurance acquisition revenue, current and deferred income tax liabilities,
    insurance contracts and non-current liabilities held for sale.

6.6  Income statement (client vs own)

In order to evaluate the consolidated income statement of the group, the Manco segregates the income statement by
eliminating the impact of the linked investment policies issued and the consolidation of the collective investment schemes 
from the core operations in the group.

A subsidiary of the group, PSG Life Limited, is a linked insurance company and issues linked policies to policyholders 
(where the value of policy benefits is directly linked to the fair value of the supporting assets), and as such does not 
expose the group to the market risk of fair value adjustments on the financial asset as this risk is assumed by the 
policyholder.

The group consolidates collective investment schemes in terms of IFRS 10 ­ Consolidated Financial Statements over which 
the group has control. The consolidation of these funds does not impact total earnings, comprehensive income, shareholders' 
funds or the net asset value of the group; however, it requires the group to recognise the income statement impact as 
part of that of the group.

                                                                          Unaudited ­ Six months ended 31 August 2015
                                                                                                               Linked
                                                                                                           investment
                                                                                               Core          business
                                                                            Total          business         and other
                                                                             R000              R000              R000

Commission and other fee income                                         1 233 783         1 222 542            11 241
Investment income                                                         301 815            74 589           227 226
Net fair value gains and losses on financial instruments                  464 613             4 515           460 098
Fair value adjustment to investment contract liabilities                 (613 236)                ­          (613 236)
Other*                                                                    353 445           352 668               777
Total income                                                            1 740 420         1 654 314            86 106

Insurance claims and loss adjustment expenses                            (330 388)         (329 828)             (560)
Fair value adjustment to third-party liabilities                          (39 988)                ­           (39 988)
Other**                                                                (1 032 601)       (1 025 148)           (7 453)
Total expenses                                                         (1 402 977)       (1 354 976)          (48 001)

Total profit from associated companies and joint ventures                   1 474             1 474                 ­
Profit before finance cost and taxation                                   338 917           300 812            38 105
Finance costs***                                                          (48 800)          (22 922)          (25 878)
Profit before taxation                                                    290 117           277 890            12 227
Taxation                                                                  (86 422)          (74 195)          (12 227)
Profit for the period                                                     203 695           203 695                 ­

Attributable to:
  Owners of the parent                                                    189 752           189 752                 ­
  Non-controlling interest                                                 13 943            13 943                 ­
                                                                          203 695           203 695                 ­


                                                                          Unaudited ­ Six months ended 31 August 2014
                                                                                                               Linked
                                                                                                           investment
                                                                                               Core          business
                                                                            Total          business         and other
                                                                             R000              R000              R000

Commission and other fee income                                         1 056 475         1 042 390            14 085
Investment income                                                         198 911            57 444           141 467
Net fair value gains and losses on financial instruments                1 011 149             6 051         1 005 098
Fair value adjustment to investment contract liabilities               (1 024 359)                ­        (1 024 359)
Other*                                                                    287 825           287 825                 ­
Total income                                                            1 530 001         1 393 710           136 291

Insurance claims and loss adjustment expenses                            (285 165)         (285 639)              474
Fair value adjustment to third-party liabilities                          (79 331)                ­           (79 331)
Other**                                                                  (870 686)         (870 686)                ­
Total expenses                                                         (1 235 182)       (1 156 325)          (78 857)

Total profit from associated companies and joint ventures                      75                75                 ­
Profit before finance cost and taxation                                   294 894           237 460            57 434
Finance costs***                                                          (62 459)          (20 498)          (41 961)
Profit before taxation                                                    232 435           216 962            15 473
Taxation                                                                  (75 448)          (59 975)          (15 473)
Profit for the period                                                     156 987           156 987                 ­

Attributable to:
  Owners of the parent                                                    145 494           145 494                 ­
  Non-controlling interest                                                 11 493            11 493                 ­
                                                                          156 987           156 987                 ­


                                                                                Audited ­ Year ended 28 February 2015
                                                                                                               Linked
                                                                                                             vestment
                                                                                               Core          business
                                                                            Total          business         and other
                                                                             R000              R000              R000

Commission and other fee income                                         2 138 855         2 114 106            24 749
Investment income                                                         499 554           158 201           341 353
Net fair value gains and losses on financial instruments                1 209 661            12 817         1 196 844
Fair value adjustment to investment contract liabilities               (1 406 791)                ­        (1 406 791)
Other*                                                                    573 321           572 946               375
Total income                                                            3 014 600         2 858 070           156 530

Insurance claims and loss adjustment expenses                            (561 548)         (561 293)             (255)
Fair value adjustment to third-party liabilities                          (41 525)                ­           (41 525)
Other**                                                                (1 767 544)       (1 755 855)          (11 689)
Total expenses                                                         (2 370 617)       (2 317 148)          (53 469)

Total profit from associated companies and joint ventures                     954               954                 ­
Profit before finance cost and taxation                                   644 937           541 876           103 061
Finance costs***                                                         (119 905)          (44 118)          (75 787)
Profit before taxation                                                    525 032           497 758            27 274
Taxation                                                                 (163 234)         (135 960)          (27 274)
Profit for the period                                                     361 798           361 798                 ­

Attributable to:
  Owners of the parent                                                    340 401           340 401                 ­
  Non-controlling interest                                                 21 397            21 397                 ­
                                                                          361 798            61 798                 ­


*    Other consists of net insurance premium revenue and other operating income.
**   Other consists of insurance claims and loss adjustment expenses recovered from reinsurers, commission paid,
     depreciation and amortisation, employee benefit expenses, marketing, administration and other expenses.
***  Finance costs on core business increased from 2014 largely due to the increase in the loan facilities provided to
     clients in their share portfolios at PSG Securities (secured by the underlying JSE Top 100 equity securities held 
     in excess of four times the value of the loan facilities). The increase was countered by the decrease in finance 
     cost paid to external debt (excluding the finance lease) as these were repaid in full during the 2015 financial 
     year.


Investment contracts are represented by the following financial assets:

                                                                        Unaudited         Unaudited           Audited
                                                                            as at             as at             as at
                                                                        31 Aug 15         31 Aug 14         28 Feb 15
                                                                             R000              R000              R000

Equity securities                                                         816 727           824 112           955 147
Debt securities                                                           730 721           940 242           800 198
Unit-linked investments                                                15 215 950        10 549 293        12 102 096
Investment in investment contracts                                        443 884           432 825           338 208
Cash and cash equivalents                                                  22 071            14 682            26 954
                                                                       17 229 353        12 761 154        14 222 603

7.  Receivables including insurance receivables and trade and other payables
     
Included under receivables are broker and clearing accounts at our stockbroking business of which R2 455.5 million
(31 Aug 2014: R1 629.1 million; 28 Feb 2015: R1 871.9 million) represents amounts owing by the JSE for trades conducted 
during the last few days before the end of the period. These balances fluctuate on a daily basis depending on the 
activity in the market.

The control account for the settlement of these transactions is included under the trade and other payables, with the 
settlement to the clients taking place within three days after the transaction date.

8.  Transactions with non-controlling interest

For the year ended 28 February 2015

i)  Acquisition of an additional interest in PSG Namibia Proprietary Limited 
    With effect from 1 March 2014, PSG Konsult Limited (through its subsidiary PSG Distribution Holdings Proprietary 
    Limited) acquired an additional 3% interest in PSG Namibia Proprietary Limited, a company incorporated in Namibia, 
    for a consideration of R1.5 million. The 3% stake was bought from a minority shareholder and the consideration was 
    paid in full on 28 February 2014. The group now holds 54% of the issued share capital of PSG Namibia Proprietary 
    Limited.

9.  Non-current assets (or disposal groups) held for sale

For the six months ended 31 August 2015
    
PSG Konsult Limited sold 100% of its shareholding in PSG Academy Proprietary Limited, the group`s private higher
education institute, to Moonstone Information Refinery Proprietary Limited and its health insurance administration 
business (through its subsidiary Nhluvuko Risk Administration Proprietary Limited) to African Unity Health Proprietary 
Limited for R1.3 million and R15.0 million respectively.

The effective date for both of these transactions was 1 March 2015, subject to suspensive conditions, and was treated
as non-current assets and liabilities held for sale on 28 February 2015.

10. Other acquisitions

For the year ended 28 February 2015

i)  Standardising of revenue sharing model
    Effective 1 March 2014, the group (through its subsidiary PSG Wealth Financial Planning Proprietary Limited) concluded 
    an asset-for-share transaction (utilising Section 42 of the Income Tax Act) with a large number of its advisers. The 
    purpose of this transaction was to standardise the revenue sharing arrangements between the advisers and PSG Konsult. 
    This provided the opportunity for the advisers to become shareholders in the business and be part of our loyal 
    shareholder base of individuals.

    The consideration was paid with the issue of PSG Konsult shares (35.8 million shares at R4.50 per share) and the 
    remaining R12.5 million paid in cash on the effective date. The transaction did not qualify for accounting in terms 
    of IFRS 3R ­ Business Combinations as the assets acquired (the right to an increased share in the income stream of 
    the adviser) did not constitute a business acquired.

    This transaction contributed R10.1 million to our headline earnings during the 2015 financial year.
    
For the six months ended 31 August 2015

i)  Standardising of revenue sharing model
    During the period under review, the group, through its subsidiaries PSG Wealth Financial Planning Proprietary Limited 
    and PSG Corporate Financial Planning Proprietary Limited, concluded further revenue-sharing arrangements (on the same 
    basis as in the 2015 financial year) with a number of its advisers for a cash consideration of R17.6 million.
    
    These transactions contributed R0.5 million to our headline earnings during the six months ended 31 August 2015.

11.  Financial risk management

The group's activities expose it to a variety of financial risks: market risk (including price risk, foreign currency 
risk, cash flow risk and fair value interest rate risks), credit risk and liquidity risk. Insurance activities expose the 
group to insurance risk (including pricing risk, reserving risk, underwriting risk and reinsurance risk). The group is 
also exposed to operational risk and legal risk.

The capital risk management philosophy is to maximise the return on shareholders' capital within an appropriate risk
framework.

The condensed consolidated interim financial statements do not include all risk management information and disclosure 
required in the annual financial statements and should be read in conjunction with the group's annual financial
statements as at 28 February 2015.

There have been no changes in the group's financial risk management objectives and policies since the previous financial 
year-end.

Market risk (price risk, foreign currency risk and interest rate risks)
Market risk is the risk of an adverse financial impact due to changes in fair values or future cash flows of financial
instruments from fluctuations in interest rates, equity prices and foreign currency exchange rates.

A portion of the policyholders' and shareholders' investments are valued at fair value and are therefore susceptible to
market fluctuations.

With regard to the subsidiary, PSG Life Limited, this company only invests assets into portfolios that are exposed to
market price risk that matches linked policies to policyholders (where the value of policy benefits is directly linked 
to the fair value of the supporting assets), and as such does not expose the business to the market risk of fair value 
adjustments on the financial asset as this risk is assumed by the policyholder. Fees charged on this business are 
determined as a percentage of the fair value of the underlying assets held in the linked funds, which are subject to 
equity and interest rate risk. As a result, the management fees fluctuate, but cannot be less than nil.

Included in the equity securities of R887.8 million (31 Aug 2014: R827.6 million; 28 Feb 2015: R1 025.5 million) are
quoted equity securities of R886.9 million (31 Aug 2014: R826.8 million; 28 Feb 2015: R1 024.7 million), of which 
R816.7 million (31 Aug 2014: R824.1 million; 28 Feb 2015: R955.1 million) relates to investments in linked investment 
contracts. The price risk of these instruments is carried by the policyholders of the linked investment contracts.

Debt securities linked to policyholder investments amounted to R730.7 million (31 Aug 2014: R940.2 million; 28 Feb
2015: R800.2 million) and do not expose the group to interest rate risk. Cash and cash equivalents linked to policyholder
investments amounted to R22.1 million (31 Aug 2014: R14.7 million; 28 Feb 2015: R27.0 million) and do not expose the 
group to interest rate risk.

Fair value estimation
The information below analyses financial instruments, carried at fair value, by level of hierarchy as required by IFRS 13.
The different levels have been defined as follows:

-  Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

-  Input other than quoted prices included within level 1 that is observable for the asset or liability, either directly 
   (that is, as prices) or indirectly (that is, derived from prices) (level 2).

-  Input for the asset or liability that is not based on observable market data (that is, unobservable input) (level 3).

There have been no significant transfers between level 1, 2 or 3 during the period under review.

The table below analyses financial assets and liabilities, which are carried at fair value, by valuation method. There 
were no significant changes in the valuation techniques and assumptions applied since 28 February 2015.

Valuation techniques and main assumptions used in determining the fair value of financial assets and liabilities
classified within level 2 can be summarised as follows:

Instrument                                   Valuation techniques                           Main assumptions

Derivative financial instruments             Exit price on recognised over-the-             Not applicable
                                             counter (OTC) platforms

Debt securities                              Valuation model that uses the market           Bond interest rate curves
                                             input (yield of benchmark bonds)               Issuer credit ratings
                                                                                            Liquidity spreads

Unit-linked investments                      Quoted put (exit) price provided by            Not applicable ­ prices 
                                             the fund manager                               are publicly available

Investment in investment contracts           Prices are obtained from the insurer of        Not applicable ­ prices 
                                             the particular investment contract             provided by registered 
                                                                                            long-term insurers

Policyholder investment contract             Current unit price of underlying               Not applicable
liabilities ­ unit linked                    unitised financial asset that is linked to
                                             the liability, multiplied by the number
                                             of units held

Third-party financial liabilities arising    Quoted put (exit) price provided by the        Not applicable ­ prices
on the consolidation of mutual funds         fund manager                                   are publicly available


The fair value of financial assets and liabilities measured at fair value in the statement of financial position can be 
summarised as follows:

                                                                 Level 1        Level 2        Level 3          Total
Unaudited                                                           R000           R000           R000           R000

Financial assets 
At 31 August 2015
Financial assets at fair value through profit or loss
  Derivative financial assets                                          ­         13 813              ­         13 813
  Equity securities                                              886 914              ­              ­        886 914
  Debt securities                                                466 140        530 178         90 447      1 086 765
  Unit-linked investments                                              ­     14 620 667        945 751     15 566 418
  Investment in investment contracts                                   ­        384 021              ­        384 021
Available-for-sale
  Equity securities                                                    ­              ­            845            845
                                                               1 353 054     15 548 679      1 037 043     17 938 776

Financial liabilities
At 31 August 2015
Financial liabilities at fair value through profit or loss
  Derivative financial liabilities                                     ­         16 410              ­         16 410
  Investment contracts                                                 ­     15 563 141      1 026 198     16 589 339
  Trade and other payables                                             ­              ­         14 988         14 988
Third-party liabilities arising on consolidation of
 mutual funds                                                          ­        877 844              ­        877 844
                                                                       ­     16 457 395      1 041 186     17 498 581


                                                                 Level 1        Level 2        Level 3          Total
Unaudited                                                           R000           R000           R000           R000

Financial assets 
At 31 August 2014
Financial assets at fair value through profit or loss
  Derivative financial assets                                          ­         19 075              ­         19 075
  Equity securities                                              826 772              ­              ­        826 772
  Debt securities                                                 27 178        826 546              ­        853 724
  Unit-linked investments                                              ­      9 701 389      1 344 487     11 045 876
  Investment in investment contracts                                   ­        227 278              ­        227 278
Available-for-sale
  Equity securities                                                    ­              ­            845            845
                                                                 853 950     10 774 288      1 345 332     12 973 570

Financial liabilities
At 31 August 2014
Financial liabilities at fair value through profit or loss
  Derivative financial liabilities                                     ­         33 846              ­         33 846
  Investment contracts                                                 ­     10 413 034      1 344 487     11 757 521
  Trade and other payables                                             ­              ­         13 659         13 659
Third-party liabilities arising on consolidation of
 mutual funds                                                          ­        625 462              ­        625 462
                                                                       ­     11 072 342      1 358 146     12 430 488


                                                                 Level 1        Level 2        Level 3          Total
Audited                                                             R000           R000           R000           R000

Financial assets 
At 28 February 2015
Financial assets at fair value through profit or loss
  Derivative financial assets                                          ­         23 324              ­         23 324
  Equity securities                                            1 024 673              ­              ­      1 024 673
  Debt securities                                                476 539        373 071              ­        849 610
  Unit-linked investments                                              ­     11 228 992      1 116 656     12 345 648
  Investment in investment contracts                                   ­        226 305              ­        226 305
Available-for-sale
  Equity securities                                                    ­              ­            845            845
                                                               1 501 212     11 851 692      1 117 501     14 470 405

Financial liabilities
At 28 February 2015
Financial liabilities at fair value through profit or loss
  Derivative financial liabilities                                     ­         30 749              ­         30 749
  Investment contracts                                                 ­     12 282 705      1 106 656     13 389 361
  Trade and other payables                                             ­              ­         13 453         13 453
Third-party liabilities arising on consolidation of
 mutual funds                                                          ­        699 202              ­        699 202
                                                                       ­     13 012 656      1 120 109     14 132 765
 
The following tables presents the changes in level 3 financial instruments during the reporting periods under review:

                                                                              Unaudited      Unaudited        Audited
                                                                              31 Aug 15      31 Aug 14      28 Feb 15
                                                                                   R000           R000           R000
ASSETS
Opening carrying value                                                        1 117 501      2 488 657      2 488 657
Additions                                                                     1 846 823      3 106 266      3 294 440
Disposals                                                                    (2 033 834)    (4 386 990)    (4 762 552)
Gains recognised in profit and loss                                             106 553        137 399         96 956
                                                                              1 037 043      1 345 332      1 117 501
LIABILITIES
Opening carrying value                                                        1 120 109      2 498 451      2 498 451
Additions                                                                     1 852 842      3 113 635      3 293 979
Disposals                                                                    (2 038 341)    (4 391 450)    (4 769 442)
Losses recognised in profit and loss                                            106 553        137 399         97 121
Interest and other                                                                   23            111              ­
                                                                              1 041 186      1 358 146      1 120 109

Level 3 ­ significant fair value model assumptions and sensitivities

Financial assets and liabilities
Unit-linked investments and debt securities represent the largest portion of the level 3 financial assets and relate to 
units and debentures held in hedge funds and are priced monthly. The prices are obtained from the asset managers of the 
particular hedge funds. These are held to match investment contract liabilities, and as such any change in measurement 
would result in a similar adjustment to investment contract liabilities. The group's overall profit or loss is therefore 
not materially sensitive to the input of the models applied to derive fair value.

Trade and other payables classified within level 3 have significant unobservable input, as the valuation technique used 
to determine the fair values takes into account the probability (at each reporting period) that the contracted party will 
achieve the profit guarantee as stipulated in the business agreement.

The table below summarises the carrying amounts and fair values of financial instruments not presented on the statement 
of financial position at fair value, for which their carrying values do not approximate their fair values:

                                                                              Unaudited      Unaudited        Audited
                                                                              31 Aug 15      31 Aug 14      28 Feb 15
                                                                                   R000           R000           R000
Debt securities ­ held-to-maturity
­ Carrying value                                                                580 152        788 473        721 341
­ Fair value                                                                    587 107        800 585        736 883

Investment in investment contracts
­ Carrying value                                                                 59 862        205 547        111 904
­ Fair value                                                                     61 480        214 216        112 736

Total
­ Carrying value                                                                640 014        994 020        833 245
­ Fair value                                                                    648 587      1 014 801        849 619

The fair value of the financial assets in the table above is categorised in terms of level 2.

12. Related-party transactions

Related-party transactions similar to those disclosed in the group's annual financial statements for the year ended 
28 February 2015 took place during the period under review.


13. Capital commitments and contingencies

                                                                              Unaudited      Unaudited       Audited
                                                                              31 Aug 15      31 Aug 14     28 Feb 15
                                                                                   R000           R000          R000

Operating lease commitments                                                     124 937         74 736        82 843
Capital commitments                                                                   ­              ­        16 971


14.  Events after the reporting date

No event material to the understanding of these results has occurred between the end of the reporting period and the date 
of approval of the condensed consolidated interim financial statements, other than the acquisition of a 70% shareholding 
in DMH Associates, which is a leading independent wealth advisory firm located in Mauritius. Refer to the commentary for 
more detail on this transaction.


DIRECTORATE

Non-executive directors
W Theron (Chairman), JF Mouton, PJ Mouton, J de V du Toit^, PE Burton*, ZL Combi*
(^ Lead independent; * Independent)

Executive directors
FJ Gouws (Chief executive officer), MIF Smith (Chief financial officer)

COMPANY INFORMATION

Company secretary
PSG Management Services Proprietary Limited

PSG Konsult head office and registered office
4th Floor, The Edge, 3 Howick Close, Tyger Waterfront, Tyger Valley, Bellville, 7530
PO Box 3335, Tyger Valley, Bellville, 7536

Listing
Johannesburg Stock Exchange (JSE)
Namibian Stock Exchange (NSX)

Transfer secretary
Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107

Sponsors
JSE sponsor: PSG Capital Proprietary Limited
NSX sponsor: PSG Wealth Management (Namibia) Proprietary Limited

Auditor
PricewaterhouseCoopers Inc.
Cape Town

psg.co.za
Date: 07/10/2015 12:48:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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