Discovery building in Sandton. Picture: SUNDAY TIMES/SYDNEY SESHIBEDI
Discovery building in Sandton. Picture: SUNDAY TIMES/SYDNEY SESHIBEDI

Medical scheme operator and financial services group Discovery Holdings expects both headline earnings per share (HEPS) and earnings per share (EPS) for the year to end-June to increase between 18% and 22%.

HEPS would come in at 674c-697c and EPS at 667c-699c, Discovery said on Thursday.

It said the main reason for the increase was that the previous year included one-off costs related to a UK acquisition and rebranding.

As a result, the increase in normalised HEPS would be a more modest 5%-8%, to 710c-730c, based on an 8%-12% increase in normalised operating profit to R6.9bn-R7.2bn.

In 2016, Discovery took over the VitalityHealth and VitalityLife insurance operations that it previously had operated in partnership with Prudential.

In the year to end-June 2016, VitalityHealth’s operating profit declined 17% to R186m, hurt by a £5m expense associated with moving the business onto new systems.

VitalityLife reported a 25% growth in profit to R678m. But record low interest rates at year-end, following the Brexit vote, knocked £26m off the life insurer’s embedded value (the present value of future cash flows).

Discovery expects to release 2017 results on or about September 18.

Please sign in or register to comment.