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PSG Konsult credit rating and outlook unchanged

23 July 2018

PSG Konsult credit rating and outlook unchanged

Rating agency Global Credit Rating Company (GCR) affirmed PSG Konsult’s long-term rating of A-(ZA) and short-term rating of A1-(ZA), with the outlook for both ratings remaining stable.

About the review

GCR is one of three accredited rating agencies in South Africa. Their review of PSG Konsult’s credit rating is carried out annually after the release of our financial results.

GCR’s rating rationale

GCR states, “PSG Konsult’s ratings reflect its established franchise in wealth management, complemented by its small but growing asset management and insurance divisions. The synergistic nature of the divisions creates a solid platform for cross-selling opportunities, leveraging off its large and growing advisor distribution network that has allowed for good customer loyalty to be maintained over the years.

PSG Konsult’s financial risk profile benefits from limited capital needs, despite insurance risk, and minimal debt on its standalone balance sheet. GCR takes into consideration adjusted gearing (includes guarantees), with debt to operating income reported at a very conservative 12%. PSG Konsult’s net interest coverage ratio is in excess of 30x, whilst discretionary cash flow cover of adjusted debt was also strong at well over 100%. The group is highly cash generative, which has afforded meaningful financial flexibility to pursue several acquisitions with internal resources. This combined with entrance into the debt capital markets further enhance the liquidity buffer.”

To read the full announcement from GCR, click here.

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