SA-listed financial services group Discovery has come a long way from its roots as a medical aid administrator. It now has an impressively diversified business, both in operating units and geography.
For the year to June, Discovery's headline earnings jumped 30% to R9.6 billion. Operating profit climbed 29% to R15.2 billion, but the most exciting part was the dividend growth of 32%. Shareholders are being rewarded for their patience.
Discovery Bank stole the show, booking its first profit in the second half, ahead of schedule, on the back of 30% client growth and strong gains in loans and deposits. Vitality, the global unit, surged 70% with standout growth in the UK.
Discovery Insure's profits more than tripled, thanks to competitive pricing and a lack of hailstorms, while Discovery Invest grew 29% on rising assets under management. Discovery Life and Health delivered steadier gains, while Ping An Health in China rose 22% on a large base.
Shares popped over 6% a week ago when the trading statement confirmed that the bank had finally turned profitable after years of cash burn. But after seeing the full picture yesterday, the market was less impressed and the shares closed down 9.6%. Maybe traders were disappointed that the traditional Discovery Life and Health units didn't shoot the lights out the way the smaller divisions did? We thought the numbers were great and will continue to hold this stock in local portfolios.