Discovery trading update

Discovery Holdings released a trading statement yesterday for the 6 months to end December 2014. A quick refresher, remember that the company bought the rest of the JV with Prudential in November: Discovery buying out PruHealth. The company updates, remembering that there are actuaries galore at Discovery, you need to read this trading statement carefully: "following Discovery's acquisition of the remaining 25% issued share capital of Prudential Health Holdings Limited, the holding company of PruHealth and PruProtect joint venture, from Prudential Assurance Company ("Prudential"), the accounting of the puttable non-controlling interest in respect of Prudential's put option falls away, and the difference between the current value and the purchase price of the 25% will be released to the income statement for the six months ended 31 December 2014." Of course you say, why didn't I do the math on this one, I should have known! As a result, guidance for the half just passed is as follows:

Normalised headline earnings per share undiluted range (cents) - 325.8c to 355.4c

Headline earnings per share- undiluted range (cents) - 587.7c to 617.9c

Earnings per share- basic range (cents) - 600.0c to 630.8c

Huh? From the annual report, on page 210 you see the differences in the normalised headline earnings and headline earnings per share. In this case, as per the release there are two things to consider, as per the inserted paragraph above. The share price has been on a tear lately, the stock is up 19 percent over the last six months. It is softer after this trading announcement, as usual the market is always looking for more. I suppose that we need not wait long for further clarification, the results themselves are expected on the 24th of February, which is next Tuesday.