The CEO of financial services group PSG, Francois Gouws, says the fracas over the budget has morphed into a “political football” and urged parties to prioritise pro-growth initiatives.
“We feel the budget is being used as a political football. We hoped that the minister of finance would have got more support in balancing the budget,” Gouws said after the publication of the group’s annual results.
“But that is a one-year event. It doesn’t unduly worry us. What we are lot more worried about is that for a number of years we have financed current expenditure with long-term debt.”
PSG’s results for the year end-February benefited from a rally in equities markets — with the group recording a 24.7% increase in recurring headline earnings per share.
While it remained confident in its long-term strategy, the group acknowledged that “our economic and societal challenges will not be resolved quickly”.
As a result, it would “continue to monitor local and global events and the associated impact on the group’s clients and other stakeholders and will adjust our approach if required.”
“Continued low levels of economic growth, SA's debt and fiscal situation and heightened geopolitical tensions remain a seemingly intractable problem,” PSG added.
SA’s favourable equity market conditions last year, underpinned by optimism around the government of national unity (GNU) and reduced load-shedding, helped push PSG’s assets under management 15.7% higher to R470.7bn in the year to end-December.
The group reported a 23% jump in headline earnings and an improved financial performance across PSG Wealth and its asset management and insurance businesses.
The assets managed by PSG Wealth and Asset Management grew by 15.2% and 17.2% respectively, thanks to the outperformance of SA equities.
The group’s insurance businesses benefited from its comprehensive reinsurance programmes, which protected it from Western Cape storms and fire claims last year, and gross written premiums increased by 9.2%.
Despite the uncertain outlook, the firm said it remained confident about long-term growth prospects, having increased its infrastructure spend by 18.6% and employee remuneration by 6.1% last year.
Gouws said the company was well positioned to withstand the present geopolitical noise and domestic economic constraints.
“What we try to do is hope for the best and plan for the worst. We are strongly capitalised and have good liquidity and conservatively invested. No matter the conditions, we think we geared to navigate those difficult circumstances,” Gouws said.
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