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Tower shareholders have again been told dividends are at least several months away, despite a 55 per cent rise in the company's underlying net profit.
The insurance and financial services firm's New Zealand and Australian operations became separate companies last month, but yesterday they gave September-year results for the pre-split entity.
Excluding a $78.4 million profit from the sale of Australian Wealth Management last year, net profit for the group rose to $63.5 million, slightly more than estimates the company gave in September in information about its demerger plan.
But despite Tower Group this year giving what former managing director Jim Minto described as a "clear signal" that dividend payments were likely to resume at the full year, neither company is to pay one for at least months.
Minto, now Tower Australia's chief executive, said the two companies' boards would consider dividend policy "in the appropriate course of time".
"The obvious next waypoint on this will be the AGM in New Zealand in February."
He said both companies were "very well capitalised and progressing".
Actions taken to restore value in Tower had been "financially better for investors than if we had tried to pay dividends which would not have been tax effective and which would have destroyed some shareholder value".
Yesterday's result showed that the two Towers' resurgence since a disastrous start to the decade remained largely on track.
The New Zealand business, which has struggled relative to its Australian counterpart because of service issues, restructuring charges, costly weather events and a more competitive insurance market, produced a 36 per cent increase in net profit to $33.8 million.
"There has been considerable improvement in business outcomes as a result of the focus and work the management team led by Jim have done over the last 18 months or so," said new Tower NZ chief executive Rob Flannagan.
Operating earnings from the health and life division rose 38 per cent and those from its investment business were up 35 per cent.
But the general insurance division's operating earnings fell 64 per cent to $1 million after a $1.3 million operating loss in the second half, caused largely by claims related to the June South Island snowstorms and the Solomon Islands riots.
Tower Australia's net profit rose 45 per cent to $48.7 million, mainly from the contribution of wholesale life insurer PrefSure over the second half.
Tower became Australia's third largest life insurer with the acquisition early in the year and its integration was now almost complete.
Credit Suisse analyst Arjan van Veen said positives from yesterday's result were that Tower Australia's operating earnings of $33.2 million were better than expected and the New Zealand investment business had continued to improve profitability.
On the downside were weaker second-half performances from Tower NZ's general insurance and health and life businesses.
The result reinforced Credit Suisse's view of Tower NZ as a slow turnaround story and its preference for Tower Australia.
Since Tower's demerger, investors have favoured the Australian company's stock over that of the New Zealand business.
Yesterday Tower NZ shares closed 3c down at $2.10 and Tower Australia shares rose A2c to A$2.35.
One of the few specialist life insurers in Australia, Tower has been growing at a faster rate than the overall market, which is rapidly expanding with Australia's burgeoning workplace superannuation industry.
"The life insurance industry is now a good place to invest and the market's recognised that," said Minto.
He refused to comment on Tower's outlook for the current year. "Tower's a business that always shows by its deeds what its done rather than saying what it's going to do."
Flannagan said Tower's three New Zealand businesses would "develop and build on their current market positions".
Its health and life insurance division would "take advantage of the increased attractiveness of private health cover in the face of growing funding pressure on the public sector".
