Shareholder approval last step for Tower shift

By KEVIN TAYLOR

With two-thirds of its business now in Australia, the board of financial services provider Tower will ask shareholders next year for permission to shift its registered office from Wellington to Sydney.

Announcing the company's full-year results yesterday, Tower group managing director James Boonzaier said he was looking for a house in the New South Wales capital.

To allow Mr Boonzaier to focus more on the Australian business, Tower is appointing Jim Minto, Tower Health and Life managing director, as New Zealand chief executive. He will start the job next month.

In the year to September, Tower's net profit was $77.2 million, down 22 per cent on the previous year's $99.6 million, which included an $18.9 million one-off reinsurance gain.

Mr Boonzaier said it was a strong performance in a stormy year, when global equity markets fell 30 per cent.

The investment climate has been described as the worst in 25 years.

Tower's investment income fell 82 per cent from $522 million to $93 million. Premium income fell 11 per cent from $1.06 billion to $945 million, and fee income rose 55 per cent from $119 million to $184 million.

A 10 per cent rise in the value of the New Zealand dollar compared with the Australian also affected funds under management, which fell 4 per cent to $21.2 billion but rose 6 per cent in Australian dollar terms to $A17.5 billion.

Tower earnings per share fell 10 per cent from 48.4c to 43.4c, and a final dividend of 14c per share was declared, bringing the full-year payout to 28c.

Mr Boonzaier said restructuring of the group over the next 18 months was aimed at improving returns. Details were sketchy, but it would involve:

* Redefining the group's core business and putting more focus on wealth creation.

* Using more alliances, and merging or selling non-core operations.

Part of the changes include new management roles for some staff, including the appointment of Mr Minto as New Zealand chief.

Wellington-based Tower executive Stuart Fish will head the changes, becoming director of strategic change early next year and moving to Sydney.

The restructuring is the result of a review of the group's operations by Boston Consulting Group.