Tower, the insurer that is 34 per cent owned by Guinness Peat Group, posted a 67 per cent jump in full-year profit and said it will return $120 million to shareholders after the sale of its medical insurance business. The shares climbed 4.2 per cent as the market opened.
Profit rose to $55.8 million in the 12 months ended September 30, from $33.4 million a year earlier, the Auckland-based company said in a statement. Revenue from ordinary activities rose 23 per cent to $483 million.
Profit is within the guidance of $51 million to $56 million given by managing director Rob Flannagan on November 2 when he announced the sales of Tower Medical Insurance to ASX-listed nib holdings for about $102 million. Profit tumbled in the previous year on costs of the Christchurch earthquakes and reduced revenue from investments.
"The result reflects improved performance across all business units, compared with the same period last year," Flannagan said. "The group is recovering well from the Canterbury earthquakes."
Tower will pay a final dividend of 6 cents a share, bringing payments for the year to 11 cents, up from a total of 6 cents last year. The shares rose 8 cents to $1.98 and have gained 25 per cent this year. The stock is rated a 'hold' based on a Reuters poll of three analysts, with a median price target of $1.955.
