JOHANNESBURG (Reuters) - South Africa's top health insurer, Discovery, reported a 34 percent jump in diluted headline earnings per share to 126.4 cents, and paid its maiden dividend, sending its share up by 1 percent.

The company, majority-owned by financial and banking group FirstRand, said in a statement it had declared its first dividend of 27 South African cents per share for the year to end-June, reflecting a stronger cash position.

The company has not issued a dividend before in order to pursue its goal of organic expansion without recourse to raising debt from external sources, but said even with a wide array of expansion initiatives planned, it had sufficient cash to pay for these as well as the dividend.

South African companies are encouraged to sell stakes to blacks who were excluded from the mainstream economy during decades of apartheid white rule.

Discovery said PruHealth, its UK joint venture with insurer Prudential, had seen a jump of 705 percent in new businesses to 282 million rand, with 58,912 members covered, but its U.S. unit Destiny Health continued to struggle, widening its loss by 68 percent to 151 million rand.

Discovery said on August 31 it expected headline EPS would be 20-40 percent higher than the previous year, excluding the impact of its BEE transaction.

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