Tower Ltd yesterday reported a profit after tax ahead of market expectations and celebrated by increasing its final dividend by a cent to 9c a share.
The insurance and wealth management reported a net profit of $50.1 million for the year ended September, a 23.8% increase on the previous corresponding period.
Forsyth Barr broker Suzanne Kinnaird described the result as "solid", with all three business units, health and life, general insurance and investments, performing well.
"The capital position is robust, following the bond and rights issues earlier in the year. All in all, a very encouraging result in difficult times," she said.
Underlying net profit for the year to the end of September was up 22.3% from a year earlier, to $46.9 million.
That took into account a gain of $3.1 million, which resulted from changes in the global investment market.
This had affected the discount rate applied in valuing individual life risk policy liabilities, Tower chief executive Rob Flannagan said.
The health and life division reported a 19.7% rise in underlying profit to $31.6 million, with general insurance up 16.9% to $17.3 million, and investments' net profit up 56.8% to $5.8 million.
When, after a rights issue in September, new shares were taken into account, the dividend increase was effectively 49%, he said.
Market conditions were expected to remain challenging in the next six to 12 months, but Tower's business fundamentals were sound and secure, Mr Flannagan said.
Tough financial conditions had not detracted from the company's drive to enhance and strengthen its core businesses.
"Uncertainty has continued to dominate international and domestic markets during the 12 months to September. However, Tower stood tall through all of this, and has delivered an excellent result."
Tower chairman Tony Gibbs said the outlook was positive, and the profit was sustainable, in the board's view.
Tower remained competitive in all of its business operations, and liquidity had been further improved as a result of the recent share issue.
At the September financial year end, Tower's cash balances exceeded $146 million, Mr Gibbs said.
"There will be opportunities which Tower is now in a position to take advantage of. We are very much looking forward to the next 12 months."
