Discovery sure it can continue on growth path
INSURER Discovery’s continued bullish investment into new growth initiatives has been met with caution by analysts, who appear to be adopting a wait-and-see approach about the effect of these investments on profit. Discovery had grown operating profit 11% to R6.4bn for the year to June 2016, the company reported on Tuesday. But this translated into a mere 1% growth in normalised headline earnings per share, as the effect of capital raising in the debt and equity markets to fund growth initiatives was felt. Spending on new initiatives jumped 73% to R823m over the period. These included Discovery Insure, which expects to turn a profit this year; investments into its new banking initiative; and Discovery Partner Markets where, among others, Discovery is licensing its Vitality rewards programme via partner insurers across the globe. "We are confident we can manage and continue our growth," CEO Adrian Gore said on Tuesday. Despite Gore’s usual charisma, only one analyst has a buy rating ...
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