The Discovery Group said it delivered robust profit and new business growth in the six months to December 31, 2023.
In a trading statement yesterday, the healthcare and financial services group said normalised headline earnings (NHE) were expected to increase between 8% and 13% in the interim period, while new business annual premium income (API) increased 28%. Normalised profit from operations were expected to rise by between 10% and 15%.
Headline earnings (HE) were expected to be between 3% lower, and 2% higher.
The difference between the growth in NHE and HE was attributed mainly to the prior period fair value gain from a UK interest rate swaption. The swaption was realised towards the end of the prior year and so had no profit impact in the reporting period. And consistent with prior reporting, headline earnings were normalised for this.
The SA Composite reported “robust earnings and new business growth”. Discovery Health’s new business was boosted by the take-on of the Sasolmed scheme.
Discovery Bank’s performance was “excellent, with strong progress across all metrics”.
Discovery Life’s individual life business saw strong earnings growth with improving new business margins, while Group Life declined from an exceptional performance the prior period.
Discovery Invest’s performance saw revenues and profit benefiting from higher market-levels.
Discovery Insure’s profit recovery was constrained by two severe weather events.
In the UK Composite, VitalityHealth experienced robust new business growth due to backlogs in the NHS and an increase in demand for private medical insurance.
However, there was a concomitant increase in claims experience due to a change in claim patterns in respect of primary care demand.
VitalityLife’s earnings benefited from higher interest rates and one-off positive variances.
Vitality Global performed strongly. Ping An Health Insurance’s operating result and new business production exceeded expectations.
Vitality Network generated strong revenue and profit growth, with margin expansion.
Discovery’s directors said the restated normalised profit from operations under IFRS 17 (an accounting standard) for the prior period to December 31, 2022, was 16% lower than under IFRS 4.
Headline earnings a share (HEPS) was expected to be between 3% lower and 2% higher to between 483.4 cents and 508.4 cents – compared to the restated IFRS 17 HEPS of 498.4 cents for the prior period (453.6 cents previously reported under IFRS 4).
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