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

 

Seeking 'Clarity': Crown To Appeal Southern Response Decision, Offers Costs

“It is our intention that the clarity that will come from the outcome of these proceedings will enable the Crown to work with Southern Response to provide a soundly based proactive solution to those people that are affected.” More>>

Thinking Of The Children: Plan For Classification For Commercial Video On Demand

Classifying on-demand video content will be made mandatory to bring it in line with other media and provide better guidance and protections to families and young people, says Internal Affairs Minister Tracey Martin. More>>

Cheques Out: Inland Revenue And ACC Push For Paperless

Inland Revenue and the Accident Compensation Corporation are calling ‘time’ on cheques. From March next year, IR and ACC will no longer accept payments by cheque from customers who are able to use alternative payment options. More>>

ALSO:

"Vision And Growth": Capital Markets 2029 Report

Broader participation by New Zealanders, greater access to growth capital for New Zealand enterprises, and more choices for investors drive the recommendations in the Capital Markets 2029 report released today. More>>

ALSO:

Forest & Bird: Call For More Funding To Stop Plague Of Wallabies

Wallabies could spread over a third of New Zealand within the next 50 years, unless control is increased dramatically, says Forest & Bird central North Island regional manager Rebecca Stirnemann. More>>

ALSO: