Bloomberg News

Discovery Profit Rises 50% After Insurer Expands in U.K.

September 01, 2011

(Updates with company comment in third paragraph.)

Sept. 1 (Bloomberg) -- Discovery Holdings Ltd., which owns South Africa’s largest medical-insurance administrator, said fiscal full-year profit rose 50 percent after it expanded in the U.K.

Net income for the 12 months to June 30 climbed to 2.58 billion rand ($368 million) from 1.72 billion rand a year earlier the Johannesburg-based company said in a statement today. Earnings a share excluding one-time items were 3.66 rand. The median of eight analysts surveyed by Bloomberg estimated adjusted earnings a share of 3.71 rand.

In the fiscal year Discovery, which is seeking to expand its business in South Africa and the U.K., bought the entire share capital of Standard Life Healthcare for 1.56 billion rand and increased its shareholding in Prudential Health Holdings Ltd. The Prudential transaction boosted Discovery’s profit. The insurer also raised 800 million rand in August to help it invest in its existing business and expand further.

Discovery is “well capitalized for continued growth and profitability into the future,” the company said, declaring a final dividend of 48 cents a share, keeping its dividend cover ratio at 4.5 times.

Discovery is the second-worst performing stock on the five- member FTSE/JSE Life Assurance Index this year after Sanlam Ltd., having dropped 2.8 percent compared with the average return of 0.5 percent.

--Editors: Jon Menon, Steve Bailey

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net


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