Discovery has flagged a mixed earnings picture to its shareholders ahead of its annual results presentations scheduled for later this month, largely due to the impact of interest rate volatility on its earnings. Discovery’s UK composite delivered an 18% to 23% rise in normalised profit as higher premium income from VitalityLife boosted profit. "The headline earnings impact of higher rates in the UK was more muted over the reporting year, as the hedging strategy proved effective despite significant market volatility. The sizeable increase in both real and nominal interest rates in South Africa had a more pronounced impact on headline earnings over the reporting period." This underscores the group’s policy of normalising its presentation of headline earnings for the impact of interest rate movements and explains the difference between the expected headline earnings growth of between 3% and 8% and the expected growth in normalised headline earnings of between 30% and 35%.

Source: News 24 September 13, 2023 06:48 UTC