Tower shareholders will be rewarded for the company's much
improved profit through an increased dividend payment and a
capital return of about $120 million, the company announced
Tower reported a profit before tax of $78 million for the
year ended September, compared with a profit of $45.4 million
in the previous corresponding period.
The after-tax profit was $55.8 million, up 67% on the $33.4
million in the pcp.
The final dividend of 6c a share takes the total dividend for
the year to 11c, compared with a 6c total dividend last year.
The dividend reinvestment plan would not operate and all
shareholders would receive their dividend in cash.
Group managing director Rob Flannagan said the results
reflected improved performance across all business units.
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 continued to grow. Funds under
management surpassed $4.2 billion, he said.
"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
The year's financial results included further claim costs
associated with the earthquakes of $13.6 million after tax,
Mr Flannagan said.
The board had recommended capital return to shareholders of
$120 million - subject to court and shareholder approval.
The repayment of capital would be made up from the proceeds
of the sale of the health businesses and existing surplus
Activities for the current financial year would focus on six
key initiatives: customer retention, distribution,
interaction with advisers, KiwiSaver, product simplification
and pricing, he said.