Financial services group Discovery expects annual headline earnings to rise as much as 9% as new business grew 18%.
The group said in a voluntary trading statement on Thursday that it expected headline earnings per share (HEPS) for the year ended June to be 4%-9% higher at between 1,062.4c and 1,113.4c.
Normalised HEPS was expected to be 12%-17% higher, it said in the statement. Normalised profit from operations is expected to have increased by between 15% and 20%.
The normalisation adjustment to headline earnings largely relates to the realisation of the UK interest rate swaption during the second half of the prior financial year, resulting in no profit or loss during the reporting year in contrast to the prior year fair value gain, it said.
Discovery SA performed strongly, with a compelling contribution from each business in the composite, while Discovery Bank exceeded expectations, with excellent progress across all metrics. The acquisition of quality clients continued to accelerate, resulting in strong revenue growth, it said.
Discovery Life delivered robust earnings, despite the result for Group Life being elevated in the prior year, while Discovery Health generated solid earnings growth, while continuing to invest in technology, innovation and artificial intelligence (AI).
Discovery Invest delivered strong profit growth due to an increase in the value of assets under management. Discovery Insure delivered a strong recovery in the second half, as prior period management actions took effect.
Vitality UK achieved strong growth in customers, new business and earned premiums. VitalityHealth’s membership reached 1-million during the year, having grown strongly from the increased demand for private medical insurance given the backlogs experienced by the National Health Service (NHS), Discovery noted.
Vitality Global performed exceptionally over the year, with Ping An Health Insurance delivering an excellent operating result, with a reduction in the combined ratio, and strong cash generation.
Ping An Health Insurance commenced the payment of dividends at a payout ratio of 30% of 2023 calendar year distributable profits.
Vitality Network generated strong profit and membership growth, with improving margins.
Vitality Health International represents a key growth area for the group, with investment made over the period to capitalise on the opportunity.
Discovery will release its full-year results on September 19.
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