Investments in companies like Capitec Bank helped investment holding company PSG Group [JSE:PSG] grow earnings in an otherwise gloomy economy, CEO Piet Mouton said at the release of the company's interim results for the year ended August 2019.
Capitec [JSE:CPI] reported a 20% increase in headline earnings per share for the period under review. It remains PSG Group’s largest investment comprising 65% of its total assets as at 31 August 2019 (28 February 2019: 66%) and the major contributor to PSG Group's recurring earnings.
The group's sum-of-the-parts value amounted to R259.56 (28 February 2019: R311.45) per PSG Group share. By 11 October 2019 it was R299.57 per share.
The five-year compound annual growth rate (CAGR) of PSG Group’s SOTP value per share and share price at 31 August 2019 was 19% and 17%, respectively, whereas that of the JSE All Share index was 2%.
In a release detailing the results, Mouton said the company was looking for opportunities to continue growing earnings and benefit from an economic upswing, should one occur.
"When an upswing can be expected, is still not clear. There are also global factors outside our control pressuring sentiment."
"Despite obvious challenges, PSG Group remains cautiously optimistic about South Africa and the opportunities it presents. Whilst we assist and look to investee companies to run operations optimally, we are at the same time continuously on the lookout for new opportunities," Mouton said.