Discovery Holdings Limited - Trading Statement In Respect Of The Financial Year

Discovery Holdings Limited - Trading Statement In Respect Of The Financial Year 
Ending 30 June 2005                                                             
DISCOVERY HOLDINGS LIMITED                                                      
(Incorporated in the Republic of South Africa)                                  
(Registration number 1999/007789/06)                                            
Share code: DSY                                                                 
ISIN: ZAE000022331                                                              
("Discovery" or "the Company")                                                  
TRADING STATEMENT IN RESPECT OF THE FINANCIAL YEAR ENDING 30 JUNE 2005          
Discovery has noted the strong performance of the Company"s share price in      
recent months. In light of this performance and what the Company believes to be 
significant expectations that are reflected in the share price, the Company     
believes that it is important to update shareholders on the expected performance
over the six months to June 2005.                                               
Discovery"s shareholders are advised that the group"s headline earnings per     
share and earnings per share for the financial year ending 30 June 2005 are     
expected to exceed the comparative period by between 25% and 35%.               
Some key observations with regard to the performance of the individual          
businesses are:                                                                 
1. Discovery Life has experienced strong growth in profitability. The launch of 
the "retirement Optimiser", Discovery Life"s retirement product range, was      
successful with new business expected to commence on 1 August 2005. Significant 
development has taken place for the life insurance initiative planned with the  
UK-based Prudential Plc.                                                        
2. Discovery Health has experienced particularly strong growth, with new        
business for the six months ended 30 June 2005 expected to grow 30% year-on-    
year. This has resulted in a significant increase in acquisition costs.         
Furthermore, the termination of reinsurance income which was present in the     
prior year will have a negative impact on a comparable basis. The combined      
impact of these factors is an overall modest increase in profits for the year.  
3. PruHealth, the Company"s UK-based joint venture with Prudential Plc, is      
evolving in line with expectation. Approximately R145m has been invested over   
the course of the year, as expected.                                            
4. Destiny Health, Discovery"s US-based subsidiary, has had a difficult but     
productive period since January 2005. There has been a reduction in operating   
losses of approximately 40% compared to the previous year. Membership growth of 
70% has been achieved over the year, from 35,000 at the start of the year to the
current level of 60,000. Despite the growth achieved and profits generated in   
January and February 2005, Destiny Health is expected to generate an operating  
loss of approximately $5 million for the 6 months ended 30 June 2005 as a result
of the following factors:                                                       
- The Company geared up for expansion into new markets with its joint venture   
partner, Guardian Life Insurance Company. The entry into these markets has been 
later than anticipated, and is only expected to occur in October 2005; and      
- During the period the decision was taken to transition the full back-office   
operations from the US to South Africa. This was successfully completed in June.
However, this did result in duplication of functions and costs over the period. 
The administration efficiencies anticipated from the transitioning of these     
functions to South Africa are expected to be realised going forward.            
5. The performance of the Discovery Card has been pleasing, with approximately  
170 000 cards already in issue. It is expected that the Card will perform an    
important role in Discovery"s future product strategy.                          
This announcement is prepared in compliance with the JSE Securities Exchange    
South Africa Listings Requirements ("Listing Requirements").                    
The forecast financial information on which this trading statement is based has 
not been reviewed and reported on by the Company"s auditors.                    
Sandton                                                                         
24 June 2005                                                                    
Merchant bank and sponsor                                                       
RAND MERCHANT BANK (A division of FirstRand Bank Limited)                       
Discovery will be hosting a conference call for analysts and other interested   
parties at 12h00 (Midday - SA time) on 24 June 2005. Dial in details:           
South Africa   0800 200 648                                                     
United Kingdom 0800 917 7042                                                    
United States  1866 752 6302                                                    
Date: 24/06/2005 10:15:40 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department