Discovery rolls with the punches and starts bouncing back post-Covid

Group chief executive Adrian Gore noted the positive operating performance from Discovery’s established businesses despite a complex operating environment during the past year, as conditions started to normalise in most markets post-Covid. But the market really didn’t like it: Discovery’s share price got thumped more than 10%.

However, Discovery said operating profit increased by 45% to R9.4-billion and new business initiatives grew strongly, led by Discovery Bank and initiatives within Vitality Group, such as Amplify Health. Profit for the year almost doubled, climbing 70% to R5.4-billion.

Normalised headline earnings (adjusted to remove the effects of seasonality, revenue and expenses that are unusual or once-off) climbed 71% to R5.8-billion, while basic headline earnings per share increased 74% to 792.4 cents.

“We accelerated investment in new businesses, specifically with Discovery Bank over the last four years – the pandemic has lasted two years and the real macro complexity has been over the last two years and is likely to intensify,” Gore said.

As at June this year, the robust and well-oiled machine that is the Vitality shared-value model was able to boast more than 30 million customers in 39 markets, and gross income of R77-billion.

In the face of a high-inflation environment where consumers are facing some form of recession in many markets, management has decided to continue its more prudent policy of not paying a dividend.

Focus areas going forward, and following a cycle of intense organic investment into new initiatives, include driving new initiatives such as Discovery Bank and Vitality Group to scale, streamlining certain initiatives to position them for future growth, and ensuring capital and business discipline with high levels of liquidity and solvency.