Discovery reported a healthy performance for the six months ended December 31, 2024 as its CEO, Adrian Gore, said the JSE-listed financial services group is now " well-positioned for a phase of scaled organic growth".
The board declared an interim dividend of R0.87 per share, up 34% from R0.65 in the prior period.
Key dates:
— Greg Davies (@the_gregdavies) March 4, 2025
•Last day to trade: 25 March 2025
•Payment date: 31 March 2025⁰#DiscoveryResults #Dividend
2/ 💡 Good News:
•Normalised profit from operations rose 27% to R7,020m.
•Headline earnings grew 34% to R4,267m.
•Embedded value increased to R119.6bn, delivering a 19%… https://t.co/7SGMeban2Q
Gore said presenting the results on Tuesday, “We have emerged from a cycle of significant investment, whichfocused on creating new avenues for long-term growth, through globalising our capabilities and footprint, and building new ventures, most notably Discovery Bank. The Bank, in this period, achieved monthly profitability in December and returned its first profit ahead of plan.
"The current strong in-period performance across the Group, shows that we are well-positioned for a phase of scaled organic growth, with focused execution through our newly formed global composite, Vitality, and our domestic business, Discovery South Africa,” he said.
Discovery posted headline earnings, up 34% to R4.3 billion, while its normalised headline earnings rose 34% to R4.4bn. Its embedded value reached R120bn, a 17% annualised increase, while normalised profit from operations increased 27% to R7bn.
Gore highlighted that Discovery’s growth strategy is based on the efficacy,repeatability, and scalability of its model through organic growth and globalpartnerships. The Group’s strong performance demonstrates the effectivedeployment of the model and its applicability across the different industriesand markets.
To put Momentum's discount to Embedded Value in perspective, Discovery's just published results show EV of R179 but the DSY share price is R208, i.e. Discovery trades at a premium to EV! https://t.co/czKyHqGPdV
New business annualised premium income (API) fell 12% to R12.5bn. Revenue from non-insurance business lines climbed 14% to R3.2bn. The financial leverage ratio dropped to 18.1% from 20% at June 30 2024, supported by R500 million in net debt repayments.
Looking at its various business segments:
- Discovery South Africa’s normalised operating profit grew 27% to R5.5bn, with new business API down 18% to R9bn.
- Discovery Health’s operating profit rose 8% to R2bn, though new business API declined 31% to R4.7bn.
- Discovery Life reported a 15% rise in operating profit to R2.6bn, with new business API down 4% to R1.5bn.
- Discovery Invest’s operating profit surged 46% to R904m, with new business API up 7% to R1.7bn.
- Discovery Insure saw operating profit jump over 100% to R401m, despite a 1% dip in new business API to R659m.
- Discovery Bank narrowed its operating loss by 57% to R14m, achieving monthly profitability in December 2024.
- The Vitality composite’s normalised operating profit also increased 27% to R1.5bn, with new business API up 8% to R3.5bn. VitalityHealth’s operating profit grew 14% to R599m, with earned premiums up 16%. VitalityLife’s operating profit rose 8% to R327m, with new business API up 19% to R1.1bn. Vitality Network’s operating profit increased 15% to R339m, with membership rising 26% to 6.2 million.
Gore said the Group demonstrated continued financialresilience and remains well positioned to manage potential volatility in thecurrent macro-environment.
He said the two powerful and focused composites – Discovery South Africa and Vitality – and the strong platforms in each, are resulting in growth in earnings, cash generation, and return on equity, as well as lower leverage.
“Following the emergence from a period of sustained investment, we haveseen a strong performance, which is expected to result in further growth inprofit from operations in 2025, exceeding our medium-term ambition of 15% to 20%, driven, in particular, by a second-half recovery in the UK,” he added.
By 2.20pm on the JSE Discovery's share was up 1.41% at R210.93.
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