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PSG KONSULT LIMITED - Short-Form Announcement: Unaudited Interim Results For The Six Months Ended 31 August 2021 And Dividend Declaration

Release Date: 07/10/2021 11:42
Code(s): KST     PDF:  
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Short-Form Announcement: Unaudited Interim Results For The Six Months Ended 31 August 2021 And Dividend Declaration

PSG KONSULT LIMITED
(Incorporated in the Republic of South Africa)
Registration Number: 1993/003941/06
JSE Share Code: KST
NSX Share Code: KFS
SEM Share Code: PSGK.N0000
ISIN Code: ZAE000191417
LEI Code: 378900ECF3D86FD28194
(“PSG Konsult” or “the Company” or “the group”)


SHORT-FORM ANNOUNCEMENT: UNAUDITED INTERIM RESULTS FOR THE SIX
MONTHS ENDED 31 AUGUST 2021 AND DIVIDEND DECLARATION


1.   FINANCIAL RESULTS
     • Recurring headline earnings per share increased by 23% to 30.6 cents per share
     • Recurring headline earnings per share excluding intangible asset amortisation
        increased by 22% to 33.1 cents per share
     • Dividend per share increased by 25% to 10.0 cents per share
     • Total assets under management increased by 21% to R296bn
     • Gross written premium increased by 4% to R2.82bn

     Note: All amounts contained in this short-form announcement are presented in ZAR.

     PSG Konsult increased recurring headline earnings per share by 23% and generated a
     return on equity of 22%, thereby delivering a result which is circa 30% above its most
     recent pre-COVID interim period ended 31 August 2019. These results reflect the
     continued improvement in the group’s overall competitive market position. Our strategic
     objective of being an advice-led firm, with a strong focus on technology to enhance
     client experience, enabled us to achieve these results despite prevailing conditions. In
     support of the group’s long-term business objective to grow our own talent, we have
     continued to make significant investments in newly qualified graduates.

     PSG Konsult’s key financial performance indicators for the six months ended 31 August
     2021 are shown below.

                                                        31 Aug 21    Change    31 Aug 20
                                                            R’000        %         R’000


     Core income                                         2 878 990       13     2 558 329
     Recurring headline earnings                           404 567       22       331 655
     Non-recurring item^                                         -                (7 200)
     Headline earnings                                     404 567       25       324 455
     Non-headline items                                         65                    624
     Earnings attributable to ordinary shareholders        404 632       24       325 079

     Divisional recurring headline earnings
     PSG Wealth                                            234 246        7       218 972
     PSG Asset Management                                   96 450       95        49 542
     PSG Insure                                             73 871       17        63 141
                                                           404 567       22       331 655
     Weighted average number of shares in issue
     (net of treasury shares) (millions)                                             1 323.6             (1)          1 338.5
     Earnings per share (basic) (cents)
     – Recurring headline                                                                30.6            23               24.8
     – Headline                                                                          30.6            26               24.2
     – Attributable                                                                      30.6            26               24.3
     – Recurring headline - excluding intangible asset amortisation cost                 33.1            22               27.0

     Dividend per share (cents)                                                          10.0            25                8.0
     Return on equity (ROE) (%)                                                          22.0                             19.6


     ^The prior period non-recurring item relates to a R10.0 million (R7.2 million net of tax) donation to the South African Solidarity
     Fund in April 2020.

     Capital management
     PSG Konsult’s capital cover ratio increased to 233% (2020: 208%), based on the latest
     insurance group return, and comfortably exceeds the 100% minimum. Our financial
     performance and prudent approach to investing shareholder assets continue to ensure
     that the group is in a strong financial position with excellent liquidity.

     The group’s long-term credit rating was upgraded by Global Credit Rating Company
     during July 2021 to A+ (ZA) , while the short-term credit rating was affirmed at A1 (ZA), with
     a Stable Outlook.

     The increase in the group’s capital cover ratio and the credit rating upgrade underscore
     our ability to incrementally improve our financial position and highlight the group’s
     resilience, notwithstanding the current economic environment.

     PSG Konsult continues to generate strong cash flows which gives us various options to
     optimise our capital structure and risk adjusted returns to shareholders. During the
     period, the group repurchased and cancelled 7.2 million shares at a cost of R80.4
     million.

2.   DIVIDEND DECLARATION

     The board decided to declare an interim gross dividend of 10.0 cents per share from
     income reserves for the six months ended 31 August 2021 (2020: 8.0 cents per share)
     reflecting the group’s strong financial position and confidence in its prospects. The
     group’s dividend pay-out ratio remains between 40% to 50% of full year earnings. The
     group has, however, changed the basis of the pay-out ratio to recurring headline
     earnings excluding intangible asset amortisation, a metric that is better aligned to the
     group’s cash generated earnings.

     The dividend is subject to a South African dividend withholding tax (DWT) rate of 20%,
     unless the shareholder is exempt from paying dividends tax or is entitled to a reduced
     rate in terms of the applicable double-tax agreement. Including DWT at 20% results in a
     net dividend of 8.0 cents (2020: 6.4 cents) per share. The number of issued ordinary
     shares is 1 333 691 715 at the date of this declaration. PSG Konsult’s income tax
     reference number is 9550/644/07/5.
     The salient dates of the dividend declaration are:

     Declaration date                                                    Thursday, 7 October 2021
     Last day to trade cum dividend                                      Tuesday, 26 October 2021
     Trading ex-dividend commences                                       Wednesday, 27 October 2021
     Record date                                                         Friday, 29 October 2021
     Date of payment*                                                    Monday, 1 November 2021

     *If 1 November 2021 is declared a public holiday in South Africa, the date of payment will change to Tuesday,
     2 November 2021.

     As the dividend has been declared and denominated in ZAR, it will be paid (in ZAR) into
     the bank accounts of shareholders appearing on the Mauritian register.

     Share certificates may not be dematerialised or rematerialised between Wednesday, 27
     October 2021 and Friday, 29 October 2021, both days inclusive.

3.   LOOKING FORWARD

     The group remains confident about the prospects for growth, with a focus on organic
     growth and optimising shareholder returns. We will continue to monitor local and global
     events, and the associated impact on our clients and other stakeholders.

4.   SHORT-FORM ANNOUNCEMENT

     This short-form announcement is the responsibility of the directors of the Company. It
     contains only a summary of the information in the full announcement
     (“Full Announcement”) and does not contain full or complete details. The Full
     Announcement can be found at:
     https://senspdf.jse.co.za/documents/2021/JSE/ISSE/KST/PSGKH12022.pdf

     Copies of the Full Announcement are also available for viewing on the Company’s
     website at https://www.psg.co.za/files/investor-relations/overview/PSGKH12022.pdf
     In addition, electronic copies of the Full Announcement may be requested and obtained,
     at no charge, from the Company at company.secretary@psg.co.za and from its sponsor,
     PSG Capital.

     Any investment decisions by investors and/or shareholders should be based on
     consideration of the Full Announcement, as a whole.


Tyger Valley
7 October 2021

JSE Sponsor: PSG Capital Proprietary Limited (“PSG Capital”)
Independent Joint JSE Sponsor: UBS South Africa Proprietary Limited
NSX Sponsor: PSG Wealth Management (Namibia) Proprietary Limited, member of the
Namibian Stock Exchange
SEM Authorised Representative and SEM Sponsor: Perigeum Capital Ltd

This notice is issued pursuant to the JSE Limited Listings Requirements, the SEM Listing
Rules and the Mauritian Securities Act 2005. The board of directors of PSG Konsult accepts
full responsibility for the accuracy of the information contained in this communiqué.

Date: 07-10-2021 11:42:00
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