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

 


TOWER posts solid half-year result of $13.1 million

TOWER posts solid half-year result of $13.1 million

TOWER has today reported a net profit after tax (NPAT) of $13.1 million for the six months ended 31 March 2014.

This compares to NPAT of $44.2 million in the previous corresponding period, which included significant abnormal profit and earnings from businesses that have been divested.

TOWER Chairman Michael Stiassny said the result was solid and an indication of the underlying strength of the general insurance business, which had been impacted during the period by a number of severe weather events.

“TOWER has made good progress against its key metrics and strategic priorities, and is well advanced in the execution of its core strategy to deliver growth and sustainable shareholder returns,” he said.

TOWER Chief Executive Officer David Hancock said over the past six months the organisation had been deeply engaged in executing its refreshed general insurance strategy to provide both an improved experience for customers and continued strong returns for shareholders.

“We’re an old company with a lot of new ideas about how to better deliver to our customers, and we’re encouraged by the number of green shoots that are already visible. Customer retention, brand recognition and net promoter score have all improved over the first six months of the year,” he said.

“Significant work has also been undertaken to take advantage of technology shifts to improve our direct business, launch new products and services such as our innovative SmartDriver app and provide better value to our customers.”

Gross written premium increased 5% on the previous corresponding period, supported by premium growth to reflect earlier rises in reinsurance costs. Net earned premium increased 7.7% to $115.6 million.

Mr Hancock said TOWER’s result for the first six months of the year was particularly pleasing given the abnormal weather patterns that continued to impact the local insurance industry.

Large claim events in New Zealand and the Pacific cost $4.8 million before tax compared to $3.3 million in the previous corresponding period. Significant New Zealand events in the first half of the year included floods in the South Island and the impact of Cyclone Lusi.

In the Pacific, despite a cyclone in Tonga and suspected arson activity in the Cook Islands, normalised NPAT recovered to $2.7 million in 1H14.

Mr Hancock said management would continue to focus on the reduction of cost within the business.

Life insurance business TOWER Life (N.Z) Limited reported NPAT of $3.7 million, well above the full year plan of $2.8 million due to one-off earnings improvement. The business has a closed book in run-off with no new business being written. TOWER continues to receive approaches about its Life business and will continue to evaluate these.

Mr Hancock said TOWER continued to work hard to deliver value to shareholders.

In January, TOWER returned $52.6 million to shareholders through a voluntary share buy back, taking total capital returned to shareholders in the last 13 months to $171.8 million. In April, TOWER repaid $81.8 million in bonds to become debt free.

TOWER has responded to shareholder requests for a cost-effective solution to dispose of small parcels of shares in the company and has announced a share cancellation programme offering shareholders with fewer than 200 shares the opportunity to have TOWER cancel them free of any brokerage charges.

Mr Hancock said TOWER remained a very well capitalised business and was carrying $43 million in capital above solvency requirements at the business level and an additional $35 million at the corporate level.

The regulatory environment is expected to allow the release of this capital for growth or shareholder returns in the medium-term.

Over the next 6-12 months Mr Hancock said TOWER’s focus would be to:
Drive growth and efficiency through staff engagement;
Unlock significant brand potential through customer service;
Maintain a leading position in attractive Pacific markets;
Deliver financial performance;
Efficiently manage risk and capital for better returns; and
Capitalise on the opportunities presented by industry consolidation.
Mr Stiassny said TOWER remained an attractive yield stock with a dividend ratio at 90%-100% of NPAT. The Board had determined that a half year dividend of 6.5 cents per share (unimputed) appropriately reflected the company’s performance and would be paid for the six months ended 31 March 2014.

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news