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Johannesburg - Even though annual earnings at investment group PSG have almost trippled, CEO Jannie Mouton told backers on Monday he expects an "improvement in performance" in the next year.
PSG reported earnings figures of 249c per share for the year to end-February, up 281%, although its dividend was down to 29c/share from 38c.
However, Mouton said the recurring headline earnings figure - which rose at a more sedate 19% to 207c/share - was a more realistic indication of operating performance. Recurring headline earnings strips out some once-off transactions and volatility attached to mark-to-market accounting of underlying assets.
Rumours are circulating that the group may be considering divesting part or all of its holding in low-cost banking group Capitec in which it has a 34.8% stake. Despite the financial crisis, Capitec saw its headline earnings rise by 45% to R437m during its previous financial year. The bank's share price has also climbed from 3 600c in April to around R100 at present.
Commenting on the banks performance Mouton said: "Capitec is a company that emanated from the PSG stable about ten years ago and we are proud of its continuous exceptional growth and performance."
Also in the PSG portfolio is agriculture operation Zeder in which PSG hold a 38% stake. Zeder raised R495m in a rights issue last year to fund expansion. However, the operation holds an indirect stake in tarnished food group Pioneer which has recently been hit by a large fine from competition authorities for its role in the so-called "bread cartel" and is under investigation for other contraventions. Zeder has set aside R43.9m provision against this fine.
While Capitec has been a star performer and Zeder has gone the capital raising route, much is expected of recently listed Paladin, which has been identified as the preferred investment vehicle for PSG.
Paladin, in which PSG holds an 80% stake, has investments in 13 underlying investments including construction firms Precrete, Petmin, Erbacon and Topfix and education group Curro.
- Fin24.com