Discovery delivers 27% profit growth in strong interim results
Discovery Group has posted exceptional interim results with headline earnings surging 34%, driven by Discovery Bank reaching operational break-even and strong performance across its portfolio of businesses
Discovery Interim results in review
Discovery has produced a strong financial performance for the interim period, marked by significant growth and profitability. The Group's normalised profit from operations increased by 27%, with headline earnings rising by 34%, reflecting effective execution of its growth strategy and contributions from both its Discovery South Africa and Vitality composites.
Key growth drivers of succeed include a strong performance from Discovery Bank, which achieved monthly operational break-even with a 42% increase in total revenues, and solid results from Discovery Health, Life, Invest and Insure. The Vitality Composite also demonstrated robust growth, and Ping An Health Insurance (PAHI) contributed positively.
Capital ratios remain strong, and the Group is generating substantial cash flow. The declared interim dividend of 87 cents per share, a 34% increase, signals confidence in the company's financial health and future prospects.
The Group's financial position is resilient, with the company focusing on scaled organic growth, technology investments, and its Shared-value Insurance model to improve the health and wellness of its clients.
Discovery – technical view
The share price of Discovery is consolidating at highs and trades within a long term uptrend. The uptrend suggests keeping a long bias to trades on the stock. For new positions, traders might hope to see a close above resistance at 21535, before targeting a move towards overhead resistance at 23850. In this scenario, a close below support at 20130 might be used as a stop loss consideration.
Long term broker ratings and price target
A Reuters poll of analyst ratings suggest a long term ‘buy’ for Discovery with a price target mean of 20034c. The share price currently trades at a premium to this suggested long term price target.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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