Our opinion on the current state of SYGNIA(SYG)Sygnia (SYG) describes itself as a "specialist financial services group." It is South Africa's largest provider of exchange-traded funds (ETF) and has a number of unit trusts. The company has R217.7 billion under management and appears to be taking market share away from other asset managers. Sygnia Itrix makes it possible for Sygnia to attract funds looking for offshore exposure. The fact that Sygnia was able to increase assets under management during such a challenging time indicates that it has caught the attention of fund managers.
The company's revenue is a function of its ability to continue to attract funds for management. We believe that this company could be quite similar to Coronation in early 2012 when that company was relatively cheap and subsequently grew four-fold. In its results for the six months to 31st March 2024, the company reported assets under management (AUM) up 9.1% to R341.3 billion and headline earnings per share (HEPS) up 9.7%. The company said, "Group revenue for the six months to 31 March 2024 increased by 8.7% to R444.2 million (31 March 2023: R408.6 million), while total expenses rose by 8.0% to R253.8 million (31 March 2023: R235.0 million). After accounting for net interest and investment income and finance costs of R20.0 million (31 March 2023: R18.0 million), pre-tax profit amounted to R210.4 million (31 March 2023: R191.6 million)."
Technically, the share has been in an upward trend since COVID in March 2020. We see that upward trend as continuing. On a P:E of 10.31 and a dividend yield (DY) of 8.2%, it looks like good value.
