Discovery (DSY) H2 2025 earnings summary

Executive summary

• Operating profit grew 29% to over ZAR 15.2 billion for the year ended 30 June 2025, with robust performance across all business segments despite a volatile geopolitical environment.

• Normalized headline earnings rose 30% to over ZAR 9.6 billion, and a final dividend of ZAR 2.88 per share was declared, up 33%.

• The group is now structured around two composites: Discovery South Africa and Vitality globally, both showing strong growth (22% and 70% respectively).

• Cash generation was strong, with ZAR 17.7 billion generated, ZAR 5.4 billion net after investments and finance costs, and ZAR 1.6 billion net after dividends.

• Group Embedded Value (EV) increased to ZAR 126.6 billion, with a 15.7% return on EV.

Financial highlights

• South Africa composite operating profit up 22% to over ZAR 12 billion; Vitality global up 70%.

• Discovery Bank turned profitable, with client base up 30% to 1.2 million and over 3 million accounts.

• Discovery Health operating profit up 7%, membership just below 4 million, and new business (excluding Sasolmed) up 12%.

• Discovery Life operating profit up 14%, driven by strong mortality experience; cash generation at ZAR 3.3 billion.

• Discovery Invest operating profit up 29%, assets under administration up 15% to ZAR 179 billion.

• Discovery Insure operating profit exceeded ZAR 800 million, with a focus on margin and quality of new business.

• Ping An Health profit up 22% to CNY 2.5 billion, with market share rising to nearly 10% and lives covered up 17% to 32.1 million.

Outlook and guidance

• Targeting 15-20% compound annual growth over the next five years (2025-2029), with a focus on scaling existing businesses and investing in Vitality AI.

• ROE expected to climb above 15% as Discovery Bank scales; cash conversion targeted at 60-70%.

• Spend on new initiatives to be around 5% of profit, with no major new business launches anticipated.

• Dividend cover expected to remain at or below 5x.

• Strategic focus on scaling Discovery Bank and maintaining market leadership across business lines.