KEY POINTS:
Investors in Tower Ltd will be eager for good news from this week's results announcement after the departure of two key members of personnel, which has acted to depress the share price.
Tower's chief executive of business, Tony Hildyard, left little more than a week ago and its head of New Zealand equities, Wayne Stechman, resigned from his position in October.
Tower's share price closed on Friday at $1.92, down from around $2.30 in October, and it was under pressure throughout last week.
Tower Asset Management is the fourth largest asset manager in New Zealand and is a default KiwiSaver provider.
Market analysts say it is rumoured that Tower's funds under management have fallen by several hundred million dollars as a result of the two resignations.
They expect Tower's annual profit to be either flat or a slight improvement on last year's theoretical proforma profit of $28.1 million but they are, nevertheless, upbeat about company's prospects.
It's been a year since the company, as Tower Group, split its New Zealand and Australian businesses.
John Cairns, of brokers Forsyth Barr, says the departure of Stechman and Hildyard has not been met favourably by the investment community.
"The share price has been hammered in recent times as a function of the upheaval in their investment business.
"The market doesn't like changes in personnel in management teams, especially when you get down to the actual investment team."
The market has had concerns about the departure of the duo but investment is the smallest of Tower's businesses, coming third after health and life insurance, fire and general insurance.
Cairns does not expect a recovery in the share price overnight but he and others say the company is well-positioned.
"They have spent considerable resource on infrastructure in anticipation of KiwiSaver, so they will be one of the big players in that," he says.
"The result is most probably going to be below what the market had expected at the time of the separation.
"But I think the overall direction of the company is positive.
"It's going through a rebuilding process and it is just putting the blocks in place," says Cairns.
"Hopefully what you will get out of the result is not so much the number - but the direction in which the businesses are heading."
Bernard Doyle, strategist at Goldman Sachs JB Were, expects a net profit of about $27.7m.
He says that a key issue will be whether the company announces a long-awaited dividend. Doyle says the decrease in the share price might be an over-reaction.
"We think its probably blown a little bit out of proportion because it [investment] is only a quarter of their business," says Doyle. "It's one of those things that could potentially be resolved by the appointment of another recognised fund manager."
Meanwhile, fishing company Sanford is expected to be hit by high fuel costs and the strong New Zealand dollar.
Doyle is expecting Sanford's adjusted net profit to fall to $14.7m from $26m.
An unadjusted profit, taking into account the sale of its Argentinian operations, of about $22m, is expected.
Sanford's result is due on Wednesday, followed by Tower on Thursday.
