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

 


Tower: 67% Profit Increase, Plans $120m Capital Repayment


MEDIA RELEASE

For immediate release

29 November 2012

Tower Reports 67% Profit Increase, Plans $120m Capital Repayment

(Auckland – NZ) TOWER Limited today reported a $55.8 million net profit after tax for the full year to 30 September 2012, a 67% increase over the $33.4 million reported for the comparable period last year.

The result reflects improved performance across all business units, compared with the same period last year.

Strong revenue growth was reported by the Life, Health and General Insurance businesses and there was a drop in the level of insurance claims. Premium income growth for the Health business countered the impact of claims’ inflation while price increases in General Insurance policies covered rising reinsurance costs. The Investments business continues to grow with funds under management surpassing $4.2 billion.

Net asset backing improved to $1.85 per share, up from $1.72 per share, and gearing (debt to debt plus equity) dropped to 14.1%, an improvement from around 15%. TOWER has capital in excess of the new Reserve Bank solvency standards.

Given TOWER’s solid financial position, the Board is pleased to announce that a final dividend of 6 cents per share will be paid on 1 February 2013. This brings the annual unimputed dividend to 11 cents per share.

Group Managing Director, Rob Flannagan, said that TOWER had posted an excellent financial result for the year to September 2012 by getting the basics right, resulting in revenue growth, cost reduction and superior investment performance.

“The Group is recovering well from the Canterbury earthquakes and the strong financial performance highlighted the benefits of its streamlined and cohesive operating structure which included business-to-business alliances and partnerships with distributors,” Mr Flannagan said. The year’s financial result includes further claim costs associated with the earthquakes of $13.6 million after taxation.

Capital management is a key focus for the Board which will be recommending a capital return to shareholders of $120 million - this is subject to Court and shareholder approval.

The repayment of capital will comprise the proceeds of the sale of the Health business and existing surplus capital. The repayment is likely to be via a scheme of arrangement. The intention is for shareholders to approve this at TOWER’s annual shareholder meeting, which will be scheduled for March 2013.

With the return of capital planned, the company’s dividend reinvestment plan will not operate for this dividend payment and all shareholders will receive their dividend in cash.


Interim TOWER Chairman, Steve Smith, said that the financial result for the year to September was very pleasing in the difficult economic operating conditions. TOWER continues to explore proposals arising from its strategic review, with this process expected to be completed by the annual meeting in March 2013

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>

ALSO:

Results:

Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news