PGFP PSG
 
PSG / PGFP - PSG Group / PSG Financial - Interim Results (Unaudited) For The
 
Six Months Ended 31 August 2009
 
PSG Group Limited
 
Registration number 1970/008484/06
 
JSE share code: PSG
 
ISIN code: ZAE000013017
 
PSG Financial Services Limited
 
Registration number 1919/000478/06
 
JSE share code: PGFP
 
ISIN code: ZAE000096079
 
Interim results (unaudited)
 
for the six months ended 31 August 2009
 
- Recurring headline earnings increased by 10,8% to 81,8 cents per share
 
- Headline earnings increased by 359,1% to 135,9 cents per share
 
Condensed income statement
 
31 Aug Change 31 Aug 28 Feb
 
2009 % 2008 2009
 
Rm Rm Rm
 
Income
 
Investment income 208,9 113,6 452,5
 
Insurance income 2,0 54,0
 
Net fair value (73,0) (26,3) (374,2)
 
adjustments to financial
 
instruments
 
Commission and other fee 487,9 468,3 979,7
 
income
 
Other operating income 43,1 31,4 62,5
 
Total income 668,9 587,0 1 174,5
 
 
Expenses
 
Insurance claims 3,5 43,2
 
Operating expenses 473,9 448,3 958,8
 
Total expenses 477,4 448,3 1 002,0
 
 
Net income from operating 191,5 38,1 138,7 172,5
 
activities
 
Finance costs (50,2) (33,6) (93,2)
 
Share of profits of 187,0 128,8 233,0
 
associated companies
 
Net income before 328,3 40,4 233,9 312,3
 
taxation
 
Taxation (39,0) (70,4) (48,0)
 
Net income of the group 289,3 76,9 163,5 264,3
 
 
Attributable to:
 
Non-controlling interests 95,6 112,5 213,2
 
Equity holders of the 193,7 279,8 51,0 51,1
 
company
 
289,3 163,5 264,3
 
 
Attributable to equity 193,7 51,0 51,1
 
holders of the company
 
Non-headline items (note 40,0 (1,1) 58,8
 
2)
 
Headline earnings 233,7 368,3 49,9 109,9
 
 
Earnings per share
 
(cents)
 
- attributable 112,6 271,6 30,3 30,3
 
- headline 135,9 359,1 29,6 65,3
 
- diluted attributable 112,3 273,1 30,1 30,2
 
- diluted headline 135,6 361,2 29,4 64,9
 
 
Dividend per share
 
(cents)
 
- interim 13,0 19,0 19,0
 
- final 38,0
 
- special 200,0 200,0
 
13,0 219,0 257,0
 
 
Number of shares
 
(million)
 
- in issue (net of 175,4 168,2 168,0
 
treasury shares)
 
- weighted average 172,0 168,5 168,4
 
- diluted weighted 172,4 169,8 169,3
 
average
 
Condensed statement of comprehensive income
 
31 Aug 31 Aug 28 Feb
 
2009 2008 2009
 
Rm Rm Rm
 
Net income of the group 289,3 163,5 264,3
 
Share of other comprehensive (0,9) (12,2)
 
income of associated
 
companies
 
Currency translation (5,3) (5,4) 5,4
 
adjustments and fair value
 
(losses)/gains
 
Step acquisition of
 
associated company
 
Reversal of previous fair
 
value
 
gains on equity securities (162,8)
 
Revaluation of assets and
 
liabilities of associated 125,3
 
company
 
Total comprehensive income 283,1 158,1 220,0
 
for the period
 
 
Attributable to:
 
Non-controlling interests 92,9 113,7 220,1
 
Equity holders of the company 190,2 44,4 (0,1)
 
283,1 158,1 220,0
 
Condensed statement of financial position
 
31 Aug Restated 28 Feb
 
2009 31 Aug 2009
 
Rm 2008 Rm
 
Rm
 
Assets
 
Property, plant and equipment 34,8 34,3 32,9
 
Intangible assets 786,0 742,6 736,4
 
Investments in associated 3 960,4 3 489,1 3 568,8
 
companies (note 3)
 
Financial assets linked to 8 285,0 9 422,6 7 717,0
 
investment contracts
 
Other financial assets 512,8 1 290,2 898,9
 
Deferred income tax 21,6 21,2 28,6
 
Receivables 260,8 228,8 665,0
 
Cash and cash equivalents 600,5 302,0 479,1
 
Total assets 14 461,9 15 530,8 14 126,7
 
 
Equity
 
Ordinary shareholders' equity 2 986,2 2 827,9 2 755,4
 
Non-controlling interests 2 095,8 1 896,0 1 863,6
 
Total equity 5 082,0 4 723,9 4 619,0
 
 
Liabilities
 
Insurance liabilities 31,5 1,7 30,8
 
Financial liabilities under 8 285,0 9 422,6 7 717,0
 
investment contracts
 
Other financial liabilities 620,0 789,2 1 317,9
 
Deferred income tax 68,6 152,6 67,7
 
Payables and provisions 319,6 320,3 342,7
 
Current income tax liabilities 55,2 120,5 31,6
 
Total liabilities 9 379,9 10 806,9 9 507,7
 
 
Total equity and liabilities 14 461,9 15 530,8 14 126,7
 
 
Net asset value per share 1,703 1,681 1,640
 
(cents)
 
Net tangible asset value per 1,254 1,240 1,202
 
share (cents)
 
Condensed statement of changes in owners' equity
 
31 Aug 31 Aug 28 Feb
 
2009 2008 2009
 
Rm Rm Rm
 
Ordinary shareholders' equity at 2 755,4 3 295,4 3 295,4
 
beginning of period
 
Shares issued 119,9
 
Net movement in treasury shares (15,3) (23,2) (38,1)
 
Share-based payment costs 1,9 3,7 8,6
 
Total comprehensive income 190,2 44,4 (0,1)
 
Dividends paid (65,9) (492,4) (510,4)
 
 
Ordinary shareholders' equity at 2 986,2 2 827,9 2 755,4
 
end of period
 
 
Non-controlling interests 2 095,8 1 896,0 1 863,6
 
 
Beginning of period 1 863,6 1 773,6 1 773,6
 
Total comprehensive income 92,9 113,7 220,1
 
Dividends and capital distributions (44,0) (36,8) (112,9)
 
paid
 
Interest acquired from minority (16,0)
 
shareholders
 
Acquisition of subsidiaries 217,6 74,6 65,6
 
Preference dividend paid (34,3) (29,1) (66,8)
 
 
Total equity at end of period 5 082,0 4 723,9 4 619,0
 
Condensed statement of cash flows
 
31 Aug Restated 28 Feb
 
2009 31 Aug 2009
 
Rm 2008 Rm
 
Rm
 
Cash generated by operations 454,2 100,4 312,3
 
Net change in financial instruments 199,5 (31,3) (122,3)
 
Net cash flow from operating 653,7 69,1 190,0
 
activities
 
Net cash flow from investment (124,8) 86,6 31,7
 
activities
 
Net cash flow from financing 275,7 (330,0) (559,6)
 
activities
 
Net increase/(decrease) in cash and 804,6 (174,3) (337,9)
 
cash equivalents
 
Cash and cash equivalents at (211,3) 126,6 126,6
 
beginning of period
 
Cash and cash equivalents at end of 593,3 (47,7) (211,3)
 
period *
 
* Include bank overdrafts and CFD (137,4) (387,5) (915,5)
 
financing of
 
* Include clients' cash linked to 130,2 37,8 225,1
 
investment contracts of
 
Notes to the condensed financial statements
 
1. Basis of presentation and accounting policies
 
The condensed interim financial statements have been prepared in terms of IAS
 
34 - Interim Financial Reporting and should be read in conjunction with the
 
annual financial statements for the year ended 28 February 2009, which have
 
been prepared in accordance with IFRS.
 
The accounting policies used in the preparation of the interim financial
 
statements are consistent with those used in the previous financial year. The
 
following new standards and amendments to standards are mandatory for the
 
first time for the financial year beginning 1 March 2009:
 
- IAS 1 (revised), `Presentation of financial statements'. The revised
 
standard prohibits the presentation of items of income and expenses (that is
 
`non-owner changes in equity') in the statement of changes in equity,
 
requiring `non-owner changes in equity' to be presented separately from owner
 
changes in equity. All `non-owner changes in equity' are required to be shown
 
in a performance statement.
 
Entities can choose whether to present one performance statement (the
 
statement of comprehensive income) or two statements (the income statement and
 
statement of comprehensive income).
 
The group has elected to present two statements: an income statement and a
 
statement of comprehensive income. The interim financial statements have been
 
prepared under the revised disclosure requirements.
 
- IFRS 8, `Operating segments'. IFRS 8 replaces IAS 14, `Segment reporting'.
 
It requires a `management approach' under which segment information is
 
presented on the same basis as that used for internal reporting purposes.
 
Operating segments are reported in a manner consistent with the internal
 
reporting provided to the chief operating decision-maker. The chief operating
 
decision-maker has been identified as the PSG Group Executive Committee ("PSG
 
Exco"), who is responsible for the management of the PSG Group's investment
 
portfolio and for making strategic decisions.
 
2. Non-headline items
 
31 Aug 31 Aug 28 Feb
 
2009 2008 2009
 
Rm Rm Rm
 
Gross Net Gross Net Gross Net
 
Gross/net of taxation
 
and non-controlling
 
interests
 
Impairment of (52,0) (48,8) (30,0) (28,7)
 
investments in
 
associated companies
 
Net (loss)/profit on (0,3) (0,3) 0,4 0,4 (9,9) (9,1)
 
sale/dilution of
 
investments in
 
subsidiaries
 
Net loss on (2,8) (2,9) (2,9) (3,6) (5,2) (9,3)
 
sale/dilution of
 
investments in
 
associated companies
 
Negative goodwill on 18,0 18,0 19,3 19,3
 
acquisition of
 
subsidiaries
 
Profit on 6,4 4,5 (20,0) (20,0)
 
sale/(impairment) of
 
available-for-sale
 
assets
 
Impairment of intangible (13,5) (13,5) (14,9) (12,7)
 
assets (incl. goodwill)
 
Impairment of (4,9) (4,2)
 
shareholders' loans
 
Non-headline items of (1,7) 2,2 11,6 4,7 16,6 6,8
 
associated companies
 
Other investment 1,3 0,8 (0,8) (0,4) (1,7) (0,9)
 
activities
 
(44,6) (40,0) 8,3 1,1 (50,7) (58,8)
 
3. Investments in associated companies
 
31 Aug 31 Aug 28 Feb
 
2009 2008 2009
 
Rm Rm Rm
 
Carrying value
 
- listed 1 575,3 1 296,1 1 503,3
 
- unlisted 2 385,1 2 193,0 2 065,5
 
3 960,4 3 489,1 3 568,8
 
Market and directors' valuation
 
- listed 1 964,0 1 088,3 1 163,5
 
- unlisted 2 442,7 2 313,3 2 123,0
 
4 406,7 3 401,6 3 286,5
 
4. Segment reporting
 
The PSG Exco reviews the group's internal reporting in order to assess
 
performance and allocate resources. Management has determined the operating
 
segments based on these reports.
 
The PSG Exco considers the headline earnings, split between recurring headline
 
earnings and non-recurring headline earnings, from each of its significant
 
business units as a reliable measure to evaluate the financial performance of
 
the group.
 
The information provided to the PSG Exco is measured in a manner consistent
 
with the information in the financial statements.
 
31 August 2009
 
Inter- Recurring Non- Net
 
recurring
 
segment headline headline Headline asset
 
Segment Income income earnings earnings earnings value
 
Rm Rm Rm Rm Rm Rm
 
Capitec* 61,8 61,8 1 303,5
 
Zeder 53,3 40,4 4,3 44,7 913,1
 
Paladin** 7,2 30,1 68,1 98,2 752,6
 
PSG Konsult 417,1 (19,2) 28,9 28,9 274,1
 
PSG Fund 143,9 (2,4) 9,8 9,8 137,5
 
Management
 
PSG Corporate 86,7 (17,7) 9,9 20,5 30,4 430,7
 
Before 708,2 (39,3) 180,9 92,9 273,8 3 811,5
 
funding and
 
STC
 
 
Funding and (40,1) (40,1) (825,3)
 
STC
 
 
Total 708,2 (39,3) 140,8 92,9 233,7 2 986,2
 
 
Non-headline (40,0)
 
 
Attributable 193,7
 
earnings
 
 
* Equity accounted
 
** Including Petmin that was sold to Paladin effective 1 March 2009
 
 
31 August 2008
 
Inter- Recurring Non- Net
 
recurring
 
segment headline headline Headline asset
 
Segment Income income earnings earnings earnings value
 
Rm Rm Rm Rm Rm Rm
 
Capitec* 41,3 41,3 1 230,2
 
Zeder 33,6 31,2 5,5 36,7 586,4
 
Paladin 27,2 38,3 (30,9) 7,4 609,2
 
PSG Konsult 414,6 (19,2) 34,7 34,7 252,1
 
PSG Fund 143,1 (6,5) 13,9 13,9 123,3
 
Management
 
PSG Corporate 9,1 (14,9) 16,6 (13,7) 2,9 1 056,3
 
Before 627,6 (40,6) 176,0 (39,1) 136,9 3 857,5
 
funding and
 
STC
 
 
Funding and (51,6) (35,4) (87,0) (1
 
STC 029,6)
 
 
Total 627,6 (40,6) 124,4 (74,5) 49,9 2 827,9
 
 
Non-headline 1,1
 
 
Attributable 51,0
 
earnings
 
 
* Equity accounted
 
 
28 February 2009
 
Inter- Recurring Non- Net
 
recurring
 
segment headline headline Headline asset
 
Segment Income income earnings earnings earnings value
 
Rm Rm Rm Rm Rm Rm
 
Capitec* 104,3 104,3 1 260,1
 
Zeder 72,0 73,8 6,7 80,5 661,8
 
Paladin** 63,7 70,5 (77,9) (7,4) 701,7
 
PSG Konsult 809,3 (34,8) 70,9 70,9 276,3
 
PSG Fund 318,3 (9,4) 31,2 21,8 53,0 148,4
 
Management
 
PSG Corporate 6,2 (50,8) 40,9 (99,8) (58,9) 637,8
 
Before 1 269,5 (95,0) 391,6 (149,2) 242,4 3 686,1
 
funding and
 
STC
 
 
Funding and (97,1) (35,4) (132,5) (930,7)
 
STC
 
 
Total 1 269,5 (95,0) 294,5 (184,6) 109,9 2 755,4
 
 
Non-headline (58,8)
 
 
Attributable 51,1
 
earnings
 
 
* Equity accounted
 
** Including Petmin that was sold to Paladin effective 1 March 2009
 
31 Aug 31 Aug 28 Feb
 
2009 2008 2009
 
Rm Rm Rm
 
5. Commitments
 
Operating lease commitments 87,6 69,8 61,0
 
6. Reclassification of prior period figures
 
The 31 August 2008 figures were reclassified as follows:
 
- Margin accounts and collateral held relating to Contracts for Difference
 
("CFDs") of R78,2 million, previously included in other financial assets, have
 
been reclassified as receivables.
 
- The composition of financial assets included in the at-acquisition statement
 
of financial position of PSG FutureWealth was reclassified. The net impact of
 
same was an increase in cash of R139,2 million as at 29 February 2008, with a
 
corresponding reduction in other financial assets linked to investment
 
contracts. In addition, other financial assets linked to investment contracts
 
of R37,8 million was reclassified as cash and cash equivalents as at 31 August
 
2008.
 
The effect on the specific line items is reflected below:
 
As Reclassification Reclassification Restated
 
previously of PSG of CFD-related
 
stated FutureWealth equity
 
statement of securities to
 
financial receivables
 
position
 
Rm Rm Rm Rm
 
Statement of
 
financial position
 
Assets
 
Other financial 1 368,4 (78,2) 1 290,2
 
assets
 
Receivables 150,6 78,2 228,8
 
 
Statement of cash
 
flows
 
Net change in 70,1 (101,4) (31,3)
 
financial
 
instruments
 
Net cash flow from 170,5 (101,4) 69,1
 
operating
 
activities
 
Net (72,9) (101,4) (174,3)
 
increase/(decrease)
 
in cash and cash
 
equivalents
 
Cash and cash (12,6) 139,2 126,6
 
equivalents at
 
beginning of period
 
Cash and cash (85,5) 37,8 (47,7)
 
equivalents at end
 
of period*
 
*Include clients' 37,8 37,8
 
cash linked to
 
investment
 
contracts of
 
These reclassifications had no taxation impact or effect on the net income
 
attributable to the equity holders of the group or earnings per share as at 31
 
August 2008.
 
7. PSG Financial Services Limited
 
The company is a wholly owned subsidiary of PSG Group Limited, except for the
 
6 079 738 preference shares which are listed on the JSE Limited. No separate
 
interim financial statements are presented for the company as it is the only
 
asset of PSG Group Limited.
 
Contribution to headline earnings
 
Headline earnings Number Net asset value
 
of
 
shares
 
31 Aug 31 Aug 28 Feb 31 Aug 31 Aug 31 Aug 28 Feb
 
2009 2008 2009 2009 2009 2008 2009
 
Rm Rm Rm m Rm Rm Rm
 
Recurring headline 180,9 176,0 391,6 3 307,8 2 917,9 3 143,8
 
earnings (before
 
funding and STC)
 
Capitec Bank 61,8 41,3 104,3 28,9 1 303,5 1 230,2 1 260,1
 
PSG Konsult 28,9 34,7 70,9 536,3 274,1 252,1 276,3
 
PSG Fund 9,8 13,9 31,2 137,5 123,3 148,4
 
Management
 
(including PSG
 
FutureWealth)
 
Paladin Capital 30,1 38,3 70,5 418,6 526,6 446,5 548,4
 
and other private
 
equity
 
Zeder 396,9 839,9 492,1 568,1
 
Equity accounted
 
earnings,
 
dividends and
 
other income 36,4 27,9 64,9
 
Management fee
 
earned by PSG
 
after costs 4,0 3,3 8,9
 
PSG Corporate 226,2 207,7 141,9
 
Investment income 2,9 3,6 17,8
 
BEE funding 10,7 12,6 24,8
 
Net operating
 
costs (3,7) (6,2) (8,7)
 
Channel Life 6,6 7,0 166,0 200,6
 
(sold)
 
 
Non-recurring 92,9 (74,5) (184,6) 503,7 904,6 542,3
 
headline earnings
 
Marked-to-market
 
profits/(losses)
 
Paladin Capital
 
(mainly Thembeka) 68,1 (30,9) (77,9) 226,0 162,7 153,3
 
Zeder 4,3 5,5 6,7 73,2 94,3 93,7
 
Other investments 23,3 (12,2) (95,5) 154,3 618,9 242,3
 
Interest rate
 
swap (2,8) (4,3) (15,0) 0,1 13,6 2,9
 
Other
 
STC (special
 
dividend) (35,4) (35,4) (35,0)
 
PSG FutureWealth
 
deferred tax
 
credit 21,8
 
Various 2,8 10,7
 
m Cubed Holdings 218,0 50,1 50,1 50,1
 
 
Funding costs (39,9) (46,5) (99,3) (825,9) (989,0) (930,9)
 
Perpetual (27,4) (29,3) (61,1) (555,3) (558,1) (561,0)
 
preference shares
 
(net of interest
 
on interest rate
 
swap)
 
Net interest after (12,5) (17,2) (38,2) (270,6) (430,9) (369,9)
 
tax (borrowings
 
and cash)
 
 
STC (0,2) (5,1) 2,2 0,6 (5,6) 0,2
 
 
Total 233,7 49,9 109,9 2 986,2 2 827,9 2 755,4
 
 
Statistics Change
 
Recurring HEPS 81,8 73,8 174,9 10,8%
 
after funding and
 
STC (cents)
 
HEPS (cents) 135,9 29,6 65,3 359,1%
 
Review of results
 
Recurring headline earnings (refer to Contribution to Headline Earnings table)
 
remains the board's predominant measure of PSG Group's financial performance.
 
The sustainable earnings from subsidiary and associated companies are included
 
in recurring, whereas marked-to-market profits/losses and once-off items are
 
disclosed as non-recurring headline earnings.
 
A commendable performance by associated company, Capitec, resulted in PSG's
 
recurring headline earnings after funding and STC increasing by 10,8% to 81,8
 
cents per share for the six-month period ended 31 August 2009.
 
Reportable headline earnings and attributable earnings per share increased by
 
359,1% to 135,9 cents and by 271,6% to 112,6 cents respectively for the six-
 
month period ended 31 August 2009. This is mainly the result of positive
 
marked-to-market movements in both PSG Corporate's and Thembeka Capital's
 
listed investment portfolios.
 
Corporate action
 
- PSG Group issued 3 million shares at R14,40 per share and 4,7 million shares
 
at R16,23 per share for a cash consideration of R43,2 million and R76,7
 
million respectively during the period under review.
 
- AltX listing of and R150 million renounceable rights issue by Paladin
 
Capital.
 
- Zeder rights issue, underwritten by PSG, in terms of which R495 million was
 
raised.
 
- Unbundling of KWV's own operational business from the Distell investment,
 
driven by Zeder as major shareholder.
 
- PSG Konsult's acquisition of T-Sec's private client stockbroking division
 
for a consideration of R66,4 million.
 
- Merger of PSG Fund Management with PSG FutureWealth.
 
- Sale of 18% interest in MiWay Finance for R25 million.
 
- Conclusion of a R200 million, 4-year redeemable preference share facility,
 
of which R100 million has been utilised.
 
Capitec Bank (34,8%)
 
Capitec's headline earnings increased by 50% to R178,3 million and headline
 
earnings per share by 48% to 215 cents for the six months ended 31 August
 
2009. Capitec's return on equity for this period was 28%, exceeding
 
management's 25% goal.
 
The bank remains financially sound with R1,5 billion in equity and R4,3
 
billion in assets (excluding cash). The risk-weighted capital adequacy ratio
 
is 36%. Liquidity remains a high priority and at 31 August 2009 it would have
 
been possible to repay all retail call savings deposits immediately.
 
Capitec now has 2,1 million clients served by 3 804 employees from 371
 
branches and more than 1 000 ATMs (own and in partnership).
 
Despite management's caution in these uncertain times, new clients are
 
expected to increase. PSG remains optimistic about the future of this
 
investment.
 
Capitec's comprehensive results for the six months ended 31 August 2009 are
 
available on its website www.capitec.co.za.
 
PSG Konsult (73,2%)
 
Taking cognisance of the current economic environment and the effects thereof
 
on PSG Konsult's clientele, reasonable results were achieved for the period
 
under review. Headline earnings decreased by 16,6% to R39,5 million and
 
headline earnings per share by 16,9% to 5,4 cents compared to the
 
corresponding six-month period in 2008.
 
Selected statistics include:
 
- Turnover increased by 5,4% to R391,2 million.
 
- The T-Sec acquisition added 10 500 new private clients to PSG Konsult's
 
existing client base of more than 110 000.
 
- Funds under administration increased to approximately R63 billion (2008: R50
 
billion), which was largely driven by the assets obtained through the T-Sec
 
acquisition.
 
- Short-term insurance premiums increased to R1,5 billion (2008: R1,4 billion)
 
on an annualised basis.
 
- PSG Konsult's BEE initiative, PSG Konsult Nhluvuko, is now fully operational
 
and has reported an encouraging profit for the period under review. The
 
primary focus of Nhluvuko will be commercial and institutional business.
 
PSG Konsult's comprehensive results for the six months ended 31 August 2009
 
are available on its website www.psgkonsult.co.za.
 
Zeder (40,6%)
 
Zeder successfully concluded a rights issue in terms of which R495 million was
 
raised at R1,35 per share in June 2009. Zeder's recurring headline earnings
 
increased by 17% to R74,8 million for the six months under review. However,
 
recurring headline earnings per share decreased by 9,5% to 9,5 cents and
 
reportable headline earnings per share by 20% to 10,9 cents. This was mainly
 
attributable to the increased number of Zeder shares in issue following the
 
aforementioned rights issue together with disappointing results from KWV's own
 
operational business having made a headline loss of R17,9 million from its
 
continuing operations for the year ended 30 June 2009.
 
Zeder's comprehensive results for the six months ended 31 August 2009 are
 
available on its website www.zeder.co.za.
 
Paladin Capital (93,9%)
 
Paladin remains PSG Group's preferred investment vehicle in industries other
 
than the financial and agri-related sectors.
 
Its investment portfolio currently comprises 13 investments. Paladin listed on
 
the AltX in September 2009 and raised R150 million by means of a renounceable
 
rights issue to PSG shareholders earlier in October.
 
Paladin's reportable headline earnings increased to R129,2 million (2008: R5,2
 
million) for the six months under review, while headline earnings per share
 
increased to 29,5 cents (2008: 1,4 cents) mainly as a result of favourable
 
marked-to-market movements in Thembeka Capital's listed investments in the JSE
 
Ltd, PSG and Capitec. Recurring headline earnings per share after funding and
 
STC decreased by 29% to 6,9 cents. This is mainly as a result of a loss
 
contribution from tanker manufacturer, GRW, which was severely affected by the
 
downturn in the economy. The Paladin board consequently deemed it prudent to
 
write down the investment from R91 million to R39 million. Paladin's net asset
 
value per share increased by 18% to 183 cents.
 
Significant investments made by Paladin subsequent to year-end included a 50%
 
interest in Curro Holdings, a private schooling group, for R50 million, and a
 
9,4% interest in Petmin previously owned by PSG by means of a share swap.
 
Following the aforementioned rights issue, PSG Group's interest in Paladin
 
diluted to 80,7%.
 
Paladin's comprehensive results for the six months ended 31 August 2009 are
 
available on its website www.paladincapital.co.za.
 
PSG Fund Management (95,1%)
 
With effect from March 2009, PSG Fund Management acquired the 80% shareholding
 
of PSG Group in PSG FutureWealth.
 
Profitability in the asset management industry remained under pressure with
 
the PSG Fund Management group's headline earnings decreasing by 24% to R10,8
 
million for the period under review. PSG Fund Management has been able to
 
attract further assets, albeit at a lower margin, while PSG FutureWealth has
 
enjoyed success with its secured investment product business. Selected
 
statistics for the past six months are:
 
- Funds under administration increased by 18% to R23,9 billion.
 
- Funds under management increased by 9% to R10,5 billion.
 
- Local and offshore investments experienced positive net inflows of R1,7
 
billion.
 
PSG Corporate (100%)
 
PSG Corporate acts as PSG Group treasurer, and is the appointed manager to
 
both Zeder and Paladin.
 
PSG Corporate secured a R200 million, 4-year preference share facility, of
 
which R100 million has been utilised to date. It has selectively provided
 
subsidiary companies with capital for investment purposes in the form of
 
equity and/or short-term bridging facilities.
 
The net increase in the listed share prices of our strategic and non-strategic
 
investments accounted for the non-recurring marked-to-market profits achieved
 
during the period under review.
 
Prospects
 
Management remains focused on growing PSG's recurring headline earnings base
 
and intrinsic value. We believe it to be achievable given the diversification
 
of the Group's operations across the broader economy and our commitment to
 
success.
 
We have a dream and a plan, and remain excited about the future of PSG Group.
 
Dividends
 
Ordinary shares
 
In April 2009, PSG Group's future policy to pay an annual dividend equal to
 
75% of free cash flow was announced to the market. The directors of PSG Group
 
Limited have consequently resolved to declare an interim dividend of 13 cents
 
per share (2008: 19 cents) in respect of the six months ended 31 August 2009.
 
The following are the salient dates for the payment of the ordinary dividend:
 
Last day to trade cum dividend Friday, 30 October 2009
 
Trading ex dividend commences Monday, 2 November 2009
 
Record date Friday, 6 November 2009
 
Day of payment Monday, 9 November 2009
 
Share certificates may not be dematerialised or rematerialised between Monday,
 
2 November 2009, and Friday, 6 November 2009, both days inclusive.
 
Preference shares
 
The directors of PSG Financial Services Limited declared a dividend of 450,4
 
cents per share in respect of the cumulative, non-redeemable, non-
 
participating preference shares for the six months ended 31 August 2009, which
 
was paid on 28 September 2009.
 
On behalf of the board
 
Jannie Mouton Wynand Greeff
 
Chairman Financial director
 
Stellenbosch
 
14 October 2009
 
Directors: JF Mouton (chairman)*, L van A Bellingan, PE Burton,
 
ZL Combi, J de V du Toit, MM du Toit, WL Greeff*, MJ Jooste, JJ Mouton, PJ
 
Mouton*, CA Otto, W Theron, CH Wiese
 
*Executive Independent
 
Secretaries and registered office: PSG Corporate Services (Pty) Limited
 
1st Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600
 
PO Box 7403, Stellenbosch, 7599
 
Transfer secretaries: Computershare Investor Services (Pty) Limited
 
70 Marshall Street, Johannesburg, 2001
 
PO Box 61051, Marshalltown, 2107
 
Sponsor: PSG Capital
 
Date: 14/10/2009 15:43:01 Produced by the JSE SENS Department.
 
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