PSG CEO talks strategy, COVID-19 risks & SA’s regulatory environment

PSG recently released its financial results for the year ended in February, revealing that the company continues to trade at a substantial discount to its sum of the parts value per share. Despite this, PSG remains committed to executing initiatives that unlock value for its shareholders. In a recent interview with CNBC Africa's Zinathi Gquma, PSG CEO Piet Mouton shed light on the company's strategies and outlook for the future. Mouton emphasized PSG's focus on value creation transactions through three key strategies: growing the underlying portfolio, implementing value-enhancing initiatives such as unbundling and share buybacks, and distributing dividends to shareholders. He highlighted the success of past initiatives, including the unbundling of assets that generated significant shareholder value. Additionally, PSG sold its Pioneer stake and made profitable investments that resulted in substantial dividends for investors. The company also repurchased a substantial number of PSG shares at attractive prices, demonstrating its commitment to creating value for shareholders. Looking ahead, Mouton expressed optimism about PSG's prospects, noting that the worst may be over for the company. Despite the challenges posed by the COVID-19 pandemic, PSG's portfolio companies have shown resilience and adapted well to the new operating environment. As economies gradually reopen and stabilize, PSG is poised to capitalize on growth opportunities. However, Mouton acknowledged the ongoing threat of COVID-19 and the potential for future disruptions. He reassured that PSG's risk management processes are robust, with COVID-19 being a top risk for the company. Mouton emphasized the importance of preparedness and agility in navigating uncertain times. When addressing the regulatory environment in South Africa, Mouton called for a more business-friendly approach. He cited unnecessary regulations that impede entrepreneurship and suggested a loosening of regulatory burdens to enable honest entrepreneurs to focus on business growth. Mouton emphasized that excessive regulations may not deter dishonest individuals and could instead hinder legitimate businesses. Overall, PSG remains committed to pursuing value-creating opportunities for its shareholders while navigating challenges such as COVID-19 risks and regulatory hurdles in South Africa.