Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Tower FY profit jumps 67%, to return $120M to shareholders

Tower FY profit jumps 67%, to return $120M to shareholders; shares jump

Nov. 29 (BusinessDesk) - Tower, the insurer that’s 34 percent owned by Guinness Peat Group, posted a 67 percent jump in full-year profit and said it will return $120 million to shareholders after the sale of medical insurance business. The shares climbed 4.2 percent as the market opened.

Profit rose to $55.8 million in the 12 months ended Sept. 30, from $33.4 million a year earlier, the Auckland-based company said in a statement. Revenue from ordinary activities rose 23 percent to $483 million.

Profit is within the guidance of $51 million to $56 million given by managing director Rob Flannagan on Nov. 2 when he announced the sales of Tower Medical Insurance to ASX-listed nib holdings for about $102 million. Profit tumbled in the previous year on costs of the Christchurch earthquakes and reduced revenue from investments.

“The result reflects improved performance across all business units, compared with the same period last year,” Flannagan said. “The group is recovering well from the Canterbury earthquakes.”

Tower will pay a final dividend of 6 cents a share, bringing payments for the year to 11 cents, up from a total of 6 cents last year. The shares rose 8 cents to $1.98 and have gained 25 percent this year. The stock is rated a ‘hold’ based on a Reuters poll of three analysts, with a median price target of $1.955.

The capital return means Guinness Peat, which is selling down its portfolio of assets, will get some $40.8 million. GPG shares rose 0.9 percent to 59 cents and are little changed this year.

Profit in the latest year includes a $9 million gain from the discount rate used when valuing life risk policy liabilities.

Total net premium revenue rose to $272 million from $235 million, led by a 15 percent increase in general insurance premiums to $238.9 million and a 5.9 percent increase in life premiums to $94.2 million.

Investment revenue surged 86 percent to $118.9 million, driven by a gain from equity securities and ‘other’ which includes derivative financial assets and liabilities. Property and fixed income both record declines.

Revenue from investment and management fees fell to $31.4 million from $33.8 million.

The $120 million capital return will use the sale proceeds and existing surplus capital and is likely to be via a scheme of arrangement, the company said today.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Gordon Campbell: On Tiwai Point (And Saying “No” In Greece)

Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good sign for (a) the jobs of the workers affected or (b) for the New Zealand taxpayer. More>>

ALSO:

Half Empty: Dairy Product Prices Extend Slide To Six-Year Low

Dairy product prices continued their slide, paced by whole milk power, in the latest GlobalDairyTrade auction, weakening to the lowest level in six years. More>>

ALSO:

Copper Broadband: Regulator Set To Keep Chorus Pricing Largely Unchanged

The Commerce Commission looks likely to settle on a price close to its original decision on what telecommunications network operator Chorus can charge its customers, though it probably won’t backdate any update. More>>

ALSO:

Lower Levy For Safer Cars: ACC Backtracks On Safety Assessments

Dog and Lemon: “The ACC has based the entire levy system on a set of badly flawed data from Monash University. This Monash data is riddled with errors and false assumptions; that’s the real reason for the multiple mistakes in setting ACC levies.” More>>

ALSO:

Fast Track: TPP Negotiations Set To Accelerate, Groser Says

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser. More>>

ALSO:

Floods: Initial Assessment Of Economic Impact

Authorities around the region have compiled an initial impact assessment for the Ministry of Civil Defence, putting the estimated cost of flood recovery at around $120 million... this early estimate includes social, built, and economic costs to business, but doesn’t include costs to the rural sector. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news