Discovery sees improved earnings ahead of banking launch

Listed financial services firm Discovery has advised that it expects an increase in headline earnings for the year ended June 2017.

The company said on Thursday (31 August 2017) that it expects headline earnings per share to increase in the range of 18% to 22%, to between 674 cents and 697 cents from 571.1 cents in the prior year.

Earnings per share is expected to increase in the range of 18% to 22%, to between 676 cents and 699 cents over the prior year.

Normalised profit from operations is expected to increase by between 8% and 12% to between R6.9 billion and R7.2 billion (2016: R6.4 billion).

Normalised headline earnings per share is expected to increase in the range of 5% to 8%, to between 710 cents and 730 cents, from 676.3 cents in 2016.

Discovery pointed out that the reason for the difference in the growth rate between HEPS and normalised HEPS is largely as a result of non-recurring rebranding and business acquisition costs in the UK included in headline earnings in the prior year, which have reduced in the current year.

Shares in Discovery traded at R148.84, on the JSE on Thursday morning, up from R120 a year ago, and giving the group a market cap of R93.15 billion.

Discovery received authorisation from the Registrar of Banks to establish banking operations in South Africa, and is on track to launch its banking products next year.

The insurer is expected to publish its results on 18 September 2017.


Read: Discovery given go ahead to open local bank in 2018

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Discovery sees improved earnings ahead of banking launch