Sygnia reports juicy profits, grows assets under management as savings industry shrinks

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Sygnia has been in the spotlight recently as its CEO Magda Wierzycka has been vocal about her opposition to Asisa’s lobbying against regulations that would allow local investors to increase their offshore exposure. The asset manager has released its annual results for 2020. With all key performance indicators in positive terrain, the firm has weathered a turbulent year well. The company says it is pleased with the growth it has achieved despite significant challenges. – Melani Nathan

Sygnia’s CEOs Magda Wierzycka and David Hutton had this to say in the business review of Sygnia for 2020: “Against the backdrop of one of the largest economic and social crises of our time, Sygnia’s assets under management and administration have grown to R251.8bn (2019: R238.4bn), and we have recorded a very satisfying set of financial results. We are especially pleased with the performance of our retail business, which has enjoyed steadily growing monthly inflows and ended the year with R40.2bn (2019: R30.1bn) under management.

“This is largely attributable to an ever-expanding brand awareness, strong relative investment performance and the launch of new and innovative funds. It also suggests that people have emergency funds to fall back on and/or that they have preserved the severance benefits paid to them from distressed employers. Our commitment to low-cost savings and investment products also continues to resonate with financial advisors and direct clients. Despite a contracting savings industry, the number of retail investors using the Sygnia LISP platform has increased significantly to 24 092 (2019: 17 875). While the largest proportion of retail assets is advice-led, the fact that almost half our retail clients are DIY investors speaks of our popularity with South Africans from all walks of life.”

Highlights from Sygnia’s full year financial statements

  •   Assets under management and administration of R251.8bn as at 30 September 2020 (2019: R238.4bn), up 5.6%.
  •   Revenue of R661m (2019: R508.1m), up 30.1%.
  •   Profit after tax of R206.1m (2019: R125.9m), up 63.7%.
  •   Headline earnings per share of 146.4 cents (2019: 87 cents), up 66.6%, and diluted headline earnings per share of 143.7 cents (2019: 87.3 cents), up 64.6%.
  •    Total dividend per share of 110 cents (2019: 60 cents).

Final dividend

Sygnia is committed to rewarding its shareholders with regular distributions of free cash flow generated. Accounting for projected cash requirements, a gross final dividend for the financial year ended 30 September 2020 of 70 cents per share has been declared out of income reserves, resulting in a net dividend of 56 cents per share for shareholders after Dividends Tax. Together with the interim gross dividend of 40 cents per share, this amounts to a total gross dividend of 110.0 cents per share.

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