Healthy earnings for Discovery

Johannesburg - Health insurance group Discovery Holdings [JSE:DSY] said on Wednesday that normalised headline earnings per share for the six months ended December 2010 are expected to be between 20% and 30% higher than the corresponding period of the previous year.

This excluded the effects of the acquisition of Standard Life Healthcare, and realised gains on available-for-sale financial instruments.

"Management is of the view that this best represents the operating results for the period," the group said in a trading update.

It said details of the effect of its acquisitions would be provided with the results.

In May 2010 it announced the acquisition of the entire share capital of Standard Life Healthcare, a wholly-owned subsidiary of the Standard Life Group, for R1.56bn, as well as the related increase in shareholding in Prudential Health Holdings Ltd (PHHL), the holding company of PruHealth and PruProtect, the joint ventures between Discovery and Prudential Assurance Company (Prudential) of the United Kingdom.

"In order to assist in understanding the results for the period, Discovery intends providing an indication of normalised headline earnings. Normalised headline earnings is defined as earnings excluding the impact of the transaction and excluding realised gains on available-for-sale financial instruments.

"Headline earnings per share which includes some, but not all, of the impacts of the transaction and excludes realised gains, is expected to be between 10% and 20% lower than the corresponding reporting period of the previous year.

"Earnings per share which includes all of the impacts of the transaction and realised gains, is expected to be between 65% and 75% higher than the corresponding reporting period of the previous year."

Discovery is currently finalising its results for the six months ended December 31 2010, which will be released on February 22.

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