South African insurer Discovery Ltd on Thursday declared its first dividend since the Covid-19 pandemic took hold in 2020, citing a strong balance sheet and cash generation, but said macroeconomic uncertainty would persist.
Discovery, which has a market share of 57.8% in the health insurance space, declared a final dividend of 110 South African cents per share.
The company said organic cash generation was strong during the year after increased cash generation in its life insurance Discovery Life following high Covid-19 related claims in the prior period and the reduction in the cost of new initiatives.
"Interim ordinary dividends are expected to be paid in the range of 30% to 40% of the expected total annual ordinary dividend, in line with market practice, with the remainder of the dividend to be paid as a final dividend," Chief Executive Adrian Gore told investors.
Discovery, which also has operations in Britain, has diversified into other insurance products and banking, launched in 2019, making it a comprehensive financial service provider.
The total number of clients at its bank rose by 49% to more than 700,000, while the number of accounts increased by 58.8% to 1.6 million as a result of product innovation and further investments.
The bank continues to run at a loss, but it has narrowed by 22.5% over the 12 months to June 30.
Gore said fewer people were changing their medical aid plans to cope with the high cost of living. About 97% of customers had not changed their plans in the year.
Discovery's headline earnings per share (HEPS) were 834.3 South African cents, up 5% from 792.4 cents a year earlier.
Normalised HEPS, which Discovery considers a more accurate measure of its profit and which also excludes exceptional items, rose by 32%.