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Unaudited Interim Results and Cash Dividend Declaration for the six months ended 31 December 2024
DISCOVERY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1999/007789/06)
Legal Entity Identifier: 378900245A26169C8132
JSE share code: DSY ISIN: ZAE000022331
JSE share code: DSBP ISIN: ZAE000158564
Debt company code: DSYI
Company tax reference number: 9652/003/71/7
("Discovery" or "the Company" or "the Group")
UNAUDITED INTERIM RESULTS AND CASH DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
KEY FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
31 December 31 December
Unit 2024 2023 % change
Group earnings
Normalised profit from operations1 R million 7 020 5 536 27%
Normalised headline earnings1 R million 4 350 3 256 34%
Headline earnings1 R million 4 267 3 196 34%
Basic earnings per share1 Cents 637.1 483.3 32%
Basic headline earnings per share1 Cents 642.9 484.1 33%
Basic normalised headline earnings per share1 Cents 655.4 493.1 33%
Returns, cash conversion and dividends
Normalised Return on Equity (RoE) % 15.0% 12.6% +2.4%
Annualised Return on Embedded Value (RoEV) % 19.0% 12.1% +6.9%
Dividend per share Cents 87.00000 65.00000 34%
Cash conversion ratio1 % 75% 75% 0%
Growth drivers
New business API1 R million 12 534 14 278 (12%)2
Income from non-insurance business lines1 R million 3 181 2 786 14%
31 December 30 June % change
2024 2024 (annualised)
Balance sheet and embedded value
Net asset value R million 64 644 57 719 25%
Embedded value (EV) R million 119 616 110 354 17%
Basic embedded value per share R 179.47 166.95 16%
Financial leverage ratio (FLR) % 18.1% 20% lower by 1.9%
1 Restated (refer to D.1.1 and Annexure A in the unaudited condensed consolidated financial statements for the six months ended
31 December 2024)
2 6% when excluding Sasolmed in the prior period
The period under review was characterised by increased geo-political complexities. Global inflation rates have moderated, however, the
easing of interest rates has been stalled by increased uncertainty around global policy shifts and trade tensions, with consumers and
economic growth remaining constrained in many regions. In South Africa (SA), confidence increased following the positive election
outcome, the programmes driving energy and logistics reforms, and the continued constructive engagement around the National
Health Insurance (NHI) Act to facilitate a viable journey to universal healthcare coverage in SA. The fiscal environment in the United
Kingdom (UK) remains constrained with a knock-on impact on the National Health Service (NHS) backlogs keeping the demand for and
utilisation of private medical insurance (PMI) elevated. China has continued to face macroeconomic and growth constraints, however,
bond and equity markets delivered a strong performance over the period following some signs of stabilisation.
Strong in-period performance in the growth phase, with consistent growth across the two composites
- Discovery has emerged from its cycle of significant investment. That phase focused on creating new avenues for long-term growth,
through globalising its capabilities and footprint and building new growth ventures, most notably, Discovery Bank. This has
positioned the Group for a new distinct phase of scaled organic growth, with focused execution through its newly formed global
composite, Vitality, and its domestic business, Discovery South Africa.
- Over the period, the Group executed its growth strategy delivering growth in normalised profit from operations of 27%. Both
composites achieved normalised profit from operations of 27%, with strong contributions across the Group. Headline and
normalised headline earnings both increased by 34%, as the cost of financing less investment returns remained broadly
unchanged. The normalised return on equity increased to 15% annualised, from 12.6% in the six months ended 31 December 2023
("the prior period").
- The Group's embedded value increased to R120 billion, which represents a 19% annualised return on embedded value (RoEV). This
included a positive contribution from experience variances over the period, reflecting the competitive dynamics of the Shared-
value Insurance model, a strong improvement from non-covered businesses, as well as a favourable economic basis and exchange
rate.
The Group is financially resilient in a complex and uncertain environment
Capital ratios remained strong across every business and liquidity at each regulated entity and at the centre remains well in excess of
the required buffers. The cash conversion ratio remained steady at 75% of after-tax normalised operating profit compared with the
prior period, notwithstanding the strong growth in normalised profit from operations. Favourable claims experience in Discovery Life
and Discovery Insure, as well as the increased use of financial reinsurance funding for VitalityLife, mitigated the expected dilution
impact from Discovery Health's slower inherent growth and high intrinsic cash conversion rate. The cash conversion ratio is expected to
normalise back within the Group's 60% to 70% range for the full financial year. This strong underlying cash generation facilitated a
further c.R1 billion of financing repayments within Discovery Life and c.R500 million net debt repayments by the Group.
Summary of the current period profit from operations and new business performance by composite:
Normalised
profit from New business
R million operations % Change API % Change
Discovery Health 2 023 8% 4 714 (31%)
Discovery Life 2 612 15% 1 463 (4%)
Discovery Invest 904 46% 1 735 7%
Discovery Insure 401 >100% 659 (1%)
Discovery Bank (145) (57%)
Other initiatives and central costs1 (275) >100% 448 22%
Discovery SA Composite 5 520 27% 9 019 (18%)
VitalityHealth1 599 14% 1 326 2%
VitalityLife 327 8% 1 101 18%
Vitality Network 339 15%
Ping An Health Insurance (PAHI) 424 23% 1 088 6%
Vitality Health International (VHI) Other (149) (14%)
Other initiatives and central costs (40) (33%)
Vitality (UK and VG) Composite 1 500 27% 3 515 8%
Normalised profit from operations 7 020 27%
New business API 12 534 (12%)*
1 Restated (refer to Annexure A in the unaudited condensed consolidated financial statements for the six months ended
31 December 2024)
* 6% when excluding Sasolmed in the prior period
Normalised operating profit for Discovery SA increased 27% to R5 520 million. The composite focused on driving quality new business
at appropriate margins, with new business increasing 6%, excluding the prior period take-on of the Sasolmed closed medical scheme
(decreased 18%, including Sasolmed).
Discovery Bank delivered a 42% increase in total revenues and has now achieved monthly operational break-even and continued to
deliver excellent performance across all key metrics. It is well positioned to leverage its scale, data and capabilities to drive growth
across the composite.
Discovery Health delivered robust earnings growth while continuing strategic investments in technology, innovation, artificial
intelligence, and personalised healthcare. New business increased 9%, excluding the Sasolmed closed medical scheme take-on in the
prior period (decreased 31%, including Sasolmed).
Discovery Life delivered strong earnings and cash generation with positive claims experience and maintained its retail market share and
new business margins, however group life new business, which is lumpy by nature, declined over the period.
Discovery Invest delivered significant earnings growth benefitting from strong market performance and some one-off gains for the
period.
Discovery Insure delivered an excellent recovery in operating margin, from diligently executed business actions and benign weather
conditions.
The Vitality Composite's normalised operating profit increased by 27% to R1 500 million and new business API increased by 8%.
VitalityHealth's (VH) operating profit increased 15% to 25.9 million (14% to R599 million). VH has successfully actioned significant price
increases over the last 18 months to mitigate increased private medical insurance utilisation, with the strong retention of in-force
business resulting in a 16% increase in earned premiums.
VitalityLife's (VL) operating profit increased by 8% to 14.1 million (8% to R327 million). VL utilised its advanced price optimisation to
deliver a 19% increase in new business API of high quality (39% excluding automatic contribution increases), despite a stagnant UK
market.
Vitality Network's (VN) operating profit increased by 20% to US$18.9 million (15% to R339 million), as margins increased from 31% to
35%. Membership grew by 26% to 6.2 million, demonstrating the global relevance of the Shared-value Insurance model.
The Group's share of Ping An Health Insurance's (PAHI's) after-tax operating profit increased by 23% to R424 million, following strong
gains from Chinese bond and equity market movements in the period and continued operating delivery.
Within VHI Other, Vitality USA acquired WellSpark, further progressing its expansion from its traditional focus on the employee wellness
market towards the significantly larger addressable market of integrated digital health and care. AmplifyHealth successfully deployed
nine health tech solutions across multiple Asia-pacific markets.
ORDINARY SHARE CASH DIVIDEND DECLARATION
Shareholders are advised that an interim gross cash dividend of 87.00000 cents per ordinary share was declared (69.60000 cents net of
dividend withholding tax) out of income reserves. A dividend withholding tax of 20% will be applicable to all ordinary shareholders who
are not exempt.
The number of ordinary shares in issue at the declaration date is 679 680 841.
The salient dates for the dividend will be as follows:
Last day of trade to receive a dividend Tuesday, 25 March 2025
Shares commence trading "ex" dividend Wednesday, 26 March 2025
Record date Friday, 28 March 2025
Payment date Monday, 31 March 2025
Ordinary share certificates may not be dematerialised or rematerialised between Wednesday, 26 March 2025 and Friday, 28 March
2025, both days inclusive.
DIRECTORS' STATEMENT
This results announcement is the responsibility of the Board of Directors of the Company (Board).
Shareholders and/or investors are advised that this results announcement is a summary of the information contained in the unaudited
condensed consolidated financial statements for the six months ended 31 December 2024 and does not contain full or complete
details. Any investment decisions by investors and/or shareholders should be based on a consideration of the unaudited condensed
consolidated financial statements available via the JSE cloud link https://senspdf.jse.co.za/documents/2025/JSE/ISSE/DSY/HY2025.pdf
and published on our website at https://www.discovery.co.za/corporate/financial-results on 4 March 2025.
This results announcement and the unaudited condensed consolidated financial statements have not been reviewed or reported on by
Discovery's independent joint auditors.
On behalf of the Board
ME Tucker A Gore
Chairperson Group Chief Executive
3 March 2025
Directors ME Tucker (UK) (Chairperson), A Gore* (Group Chief Executive), LM Chiume, R Farber, WM Hlahla, FN Khanyile, D Macready,
KC Ramon, M Schreuder, B Swartzberg*, BA van Kralingen, DM Viljoen* (Group Chief Financial Officer)
* Executive.
Debt officer
DM Viljoen
Registered office and business address
1 Discovery Place,
Sandton 2146
PO Box 786722,
Sandton 2146
Transfer secretaries
Computershare Investor Services Proprietary Limited
Equity and Debt Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Company secretary
A Ceba
www.discovery.co.za
SENS release date 4 March 2025
Date: 04-03-2025 08:00:00
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