Wrap Text
Annual Results for the year ended 30 June 2026 and Cash Dividend Declaration
DISCOVERY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1999/007789/06)
Legal Entity Identifier: 378900245A26169C8132
JSE share code: DSY ISIN: ZAE000022331
JSE share code: DSBP ISIN: ZAE000158564
Debt company code: DSYI
Company tax reference number: 9652/003/71/7
("Discovery" or "the Company" or "the Group")
ANNUAL RESULTS FOR THE YEAR ENDED 30 JUNE 2026 AND CASH DIVIDEND DECLARATION
Discovery Group delivered another year of strong growth and strategic progress for the year ended 30 June 2026, evidenced by a 17% growth in normalised
operating profit to R17 750 million and further growth in operational cash generation, representing 85% of profit.
The Group delivered a strong performance in an external environment shaped by geopolitical uncertainty and policy shifts. Global equity, bond and currency
markets demonstrated heightened volatility and noticeable shifts, with those in South Africa (SA) showing strong gains, benefitting from a more supportive
backdrop. Broader economic conditions remained somewhat constrained in many global economies, however the structural trends underpinning Discovery's
opportunity set continued to strengthen. Demographic change, rising chronic disease prevalence, deepening fiscal burdens and increasing healthcare costs, are
creating growing pressure on health and financial systems globally, while advances in behavioural science, data and artificial intelligence (AI) are fundamentally
changing how risk can be understood, managed and influenced. Against this backdrop, Discovery's Shared-value Insurance (SVI) model continues to differentiate
the Group and aligns the interests of customers, partners and shareholders around better outcomes.
KEY FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2026
Unit June 2026 June 2025 Change
Group earnings
Normalised profit from operations R million 17 750 15 210 17%
Profit attributable to ordinary shareholders R million 13 132 9 471 39%
Normalised headline earnings R million 11 795 9 781 21%
Headline earnings R million 12 923 9 625 34%
Basic earnings per share Cents 1 936.7 1 402.2 38%
Basic headline earnings per share Cents 1 925.6 1 447.0 33%
Basic normalised headline earnings per share Cents 1 757.6 1 470.4 20%
Returns, cash conversion and dividends
Normalised return on equity % 16.5 15.4 1.1pp
Annualised return on opening embedded value (RoEV) % 14.1 15.7 (1.6)pp
Final dividend per share Cents 273 201 36%
Cash conversion(1) % 85 80 5pp
Growth drivers
Income from non-insurance business lines R million 7 282 6 643 10%
New business annualised premium income (API) R million 28 155 26 486 6%
Financial position and embedded value
Net asset value R million 82 661 65 699 26%
Embedded value R million 142 924 126 554 13%
Basic embedded value per share R 212.49 189.85 12%
Financial leverage ratio (FLR) % 15.4 16.8 1.4pp
1 Refer to Annexure A of the Audited Results and cash dividend declaration for the year ended 30 June 2026.
Discovery South Africa delivered 16% growth in normalised profit from operations, reflecting strong contributions across all businesses. Vitality increased
normalised profit from operations by 21%, dampened by currency movements, following exceptional growth in the United Kingdom and continued progress across
the international portfolio.
Normalised headline earnings increased by 21%, as the finance costs declined in line with the Group's reduction in financial leverage, and the normalised return
on equity improved to 16.5%, from 15.4% in the prior year. Headline earnings increased by 34%, boosted by the gains realised through the early termination of the
long-term lease following the acquisition of 1 Discovery Place, the Group's head office. The partial sale of the Group's stake in Cambridge Mobile Telematics (CMT)
resulted in a further increase in basic earnings, which increased 39%.
The Group's embedded value increased to R143 billion, a 14.1% return on embedded value (RoEV), with strong growth in the value of new business and in profits
from non-covered businesses. Favourable non-economic experience variances increased to R2.6 billion, with each business delivering a positive contribution,
reflecting the positive financial dynamics of the model and particularly strong underlying claims dynamics of the in-force pool of clients across the businesses.
Lower long-term interest rates in SA resulted in a substantial positive impact of economic basis assumptions, which offset lower translated values of foreign
operations given the stronger rand, with a favourable contribution in aggregate.
1. GROUP OVERVIEW AND SALIENT RESULTS continued
PLATFORMS POSITIONED FOR GROWTH AS SA EVOLVES INTO THE SUPER BANK STRATEGY AND THE VITALITY SHARED-VALUE INSURANCE
MODEL ACCELERATES
Discovery SA is progressing into its next strategic phase, creating an integrated ecosystem through the super bank strategy. Following its quality scaling, Discovery
Bank is evolving beyond a standalone banking proposition to becoming the orchestrating layer for customers' financial and health lives, providing a seamless
interface through which customers can engage with, and derive value from, the broader Discovery ecosystem. The super bank strategy creates a differentiated
competitive advantage that deepens engagement, strengthens cross-selling and supports growth in each South African business. As the ecosystem scales, it enhances
the quality of customer relationships and reinforces the long-term earnings growth potential of the SA platform.
Globally, structural shifts in demographic, macroeconomic and technology trends have elevated the need and the opportunity to materially compress morbidity.
The Vitality SVI business model leverages a more precise understanding of pricing and managing health risks, and hyper-personalised product experiences to
encourage healthier behaviour. Powered by unique data assets, behavioural science capabilities, AI-driven personalisation and global partnerships, Vitality is
evolving as a scalable platform that improves health and financial outcomes, reduces risk and enhances long-term value creation. These outcomes create benefits
for individuals, businesses and societies, through the compression of morbidity, and for shareholders, through superior margins and returns, with strong actuarial
outcomes.
SUMMARY OF PROFIT FROM OPERATIONS AND NEW BUSINESS PERFORMANCE BY COMPOSITE FOR THE CURRENT PERIOD:
Normalised % change New % change
profit from (Current year business (Current year
R million operations vs prior year) API vs prior year)
Discovery Health 4 629 +9% 10 495 +10%
Discovery Life 5 872 +6% 3 244 +1%
Discovery Invest 2 157 +9% 3 865 +13%
Discovery Insure 1 013 +24% 1 390 +2%
Discovery Bank 370 >600%
Other initiatives and central costs(1) (173) -66% 540 -1%
Discovery SA 13 868 +16% 19 534 +8%
VitalityHealth 1 896 +60% 2 871 +1%
VitalityLife 782 +23% 3 027 +21%
Vitality Global Markets(2) 186 -29%
Ping An Health Insurance (PAHI) 1 317 +9% 2 723 -10%
Vitality AI(3) (299) >200%
Vitality composite 3 882 +21% 8 621 +3%
Normalised profit from operations 17 750 +17%
New business API(3) 28 155 +6%
1 Includes Discovery Vitality SA
2 Vitality Global Markets incorporates Vitality Network (VN) and Vitality Health International Other (VHI Other)
3 Vitality AI also includes Other Vitality central costs
WITHIN THE COMPOSITES:
DISCOVERY SOUTH AFRICA
Discovery SA increased normalised operating profit by 16% to R13 868 million and new business volumes increased by 8% to R19 534 million. The performance
reflects the strength of its category-leading businesses, which are increasingly being unified through the super bank strategy into a single, integrated customer
ecosystem spanning protection, health, wealth and banking. Increased customer engagement levels were delivered while reducing central and Vitality programme
costs over the year.
- Discovery Bank's strong performance reflects continued growth in scale, leveraging improving operating efficiency and client experience and engagement,
increasingly through deployment of AI.
- Discovery Health delivered strong new business and operating performance growth, as a result of continued scalability and cost efficiency and expanding non-
scheme revenues.
- Discovery Life delivered robust earnings momentum, offsetting an anticipated R160 million reduction in the insurance finance income and expense as well as
increased onerousness from policy alterations experience and changes in estimates, while cash generation was very strong.
- Discovery Invest delivered strong asset growth, following capital market gains and positive net flows. The rate of earnings growth was dampened by one-off gains
in the prior period, but delivered 22% growth excluding this, in line with growth in average assets under management.
- Discovery Insure delivered a strong result, with margin expansion coming from outstanding underwriting performance and disciplined claims management.
VITALITY
Vitality's normalised operating profit of R3 882 million increased by 21%, or 26% adjusting for the rand strengthening, following strong performances in both
Vitality UK and Ping An Health Insurance (PAHI), while Vitality Global Markets (Vitality Network and Vitality Health International Other) was impacted by
adverse Japanese macroeconomics. New business API increased by 3% to R8 621 million, as VitalityLife continued to deliver strong growth, mitigating the expected
reduction from PAHI. Investment spend in Vitality AI accelerated over the year, with growing application across customer engagement, healthcare, underwriting
and operational processes, applicable to all markets.
- VitalityHealth delivered a substantial increase in operating margin through disciplined pricing and rigorous claims actions, as claims experience improved. The
business focused on quality new business in a challenging economic environment.
- VitalityLife generated strong earnings growth, benefiting from favourable claims experience and lower cashflow variances, alongside continued strong underlying
business performance. Growth in new business levels as well as new business value was excellent - important determinants of return on invested capital and future
earnings momentum.
- Ping An Health Insurance delivered a strong operational performance, supported by exceptional investment returns. The anticipated decline in new business was
driven by recent changes implemented to its distribution arrangement with Ping An Life.
- Vitality Global Markets' profit was significantly impacted by the decline in the Japanese Yen and higher Japanese interest rates. Excluding this impact, profits
increased by 115%, reflecting rapid progress for VHI Other, while VN builds for greater longer-term scale and value.
ORDINARY SHARE CASH DIVIDEND DECLARATION
Shareholders are advised that the Board of Directors declared a final gross cash dividend of 273.00000 cents (218.40000 cents net of dividend withholding tax) per
ordinary share, out of the income reserves of the company. A dividend withholding tax of 20% will be applicable to all shareholders who are not exempt.
The number of ordinary shares in issue at the date of declaration is 682 491 619.
The salient dates for the dividend will be as follows:
Last day of trade to receive a dividend Tuesday, 13 October 2026
Shares commence trading "ex" dividend Wednesday, 14 October 2026
Record date Friday, 16 October 2026
Payment date Monday, 19 October 2026
Ordinary share certificates may not be dematerialised or rematerialised between Wednesday, 14 October 2026 and Friday, 16 October 2026, both days inclusive.
DIRECTORS' STATEMENT
This results announcement is the responsibility of the Board of Directors of the Company (Board).
Shareholders and/or investors are advised that this results announcement is a summary of the information contained in the audited annual financial statements
for the year ended 30 June 2026 and does not contain full or complete details. Any investment decisions by investors and/or shareholders should be based on
a consideration of the audited annual financial statements available via the JSE link https://senspdf.jse.co.za/documents/2026/JSE/ISSE/DSY/FY2026.pdf and
published on our website at https://www.discovery.co.za/corporate/financial-results on 3 September 2026.
The results announcement has itself not been audited, however, the financial information included herein has been extracted from the audited annual financial
statements which have been audited by the independent joint auditors, KPMG Inc. and Deloitte & Touche, who expressed an unmodified audit opinion.
On behalf of the Board
ME Tucker A Gore
Chairperson Group Chief Executive
2 September 2026
Directors
ME Tucker (UK) (Chairperson), A Gore* (Group Chief Executive), LM Chiume, VN Fakude(1), R Farber, WM Hlahla,
FN Khanyile, D Macready, KC Ramon, M Schreuder, B Swartzberg*, BA van Kralingen, DM Viljoen* (Group Chief Financial Officer)
* Executive.
1 Appointed effective 1 September 2025
Debt officer
DM Viljoen
Registered office and business address
1 Discovery Place, Sandton 2146
PO Box 786722, Sandton 2146
Transfer secretaries
Computershare Investor Services Proprietary Limited
Equity and Debt Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Company secretary
AC Ceba
Independent auditors
Deloitte & Touche
KPMG Inc.
www.discovery.co.za
SENS release date 3 September 2026.
Date: 03/09/2026 08:00:00
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