Sygnia delivers strong full-year growth in profits
The investment manager founded by Magda Wierzycka expects SA to lose its last investment credit rating in 2020
The investment manager founded by Magda Wierzycka delivered robust growth in profits for the year ended September due to strong revenues.
Headline earnings per share advanced 27% to 87.9c per share and revenue growth increased by nearly 21% during the period. The full-year dividend was maintained at 60c per share.
“Sygnia’s focus on low-cost investment and savings products and service provision has meant that, in contrast to our competitors, we have experienced little pressure on management fees,” said the company in a statement attached to its results.
It noted that the revenue lost as a result of closing its fund of hedge fund products and a decrease in stockbroking revenue as a result of the depressed market activity had been replaced with the launch of new products and services.
But expenses grew slightly faster than revenues as a result of the company entering the UK market, an impairment the business took to its bitcoin exchange project and ongoing investments into systems and technology, it said.
Growth in assets under management and administration was more moderate, advancing 7% to R238.4bn.
Despite the robust financial health of the business, Sygnia expressed concern about the future of the country and expected it to lose its last investment credit rating in 2020.
“As it takes countries an average of 15 years to regain creditworthiness after being downgraded to junk, in such a scenario the rand is likely to weaken further in the face of forced outflows from SA, while our borrowing costs are likely to rise, leaving less money for health care, education and other poverty-alleviating measures,” it said.