Tower profits up 24pc

Insurance and wealth management company Tower has lifted full year net profit 23.8 per cent to $50.1 million.

The result was underpinned by growth across each of Tower's three businesses - Health & Life, General Insurance and Investments, the company said today.

Underlying net profit for the year to the end of September was up 22.3 per cent from a year earlier to $46.9m.

That took into account a gain of $3.1m which resulted from changes in the global investment market which had affected the discount rate applied in valuing individual life risk policy liabilities, Tower said.

The Health & Life division reported a 19.7 per cent rise in underlying profit to $31.6m, with General Insurance up 16.9 per cent to $17.3m, and Investments net profit up 56.8 per cent to $5.8m.

A dividend of 9c per share is to be paid, compared to 8cps the previous year.

When new shares issued following a rights issue in September were taken into account, the dividend increase was effectively 49 per cent, Tower said.

It expected market conditions to remain challenging in the next six to 12 months, but said its business fundamentals were sound and secure.

Tower group managing director Rob Flannagan said tough financial conditions had not distracted from the company's drive to enhance and strengthen its core businesses.

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 $146m, said Gibbs.

"There will be opportunities which Tower is now in a position to take advantage of."

Tower shares closed yesterday at $1.82, 1c down from a year high reached during the day.

- NZPA