For immediate release
28 May 2013
Tower Net Profit of $44.2m, New Direction Ahead
(Auckland – NZ) TOWER Limited has reported a $44.2 million net profit after tax for the half year to 31 March 2013.
The period saw the completion of a strategic review of operations, with TOWER now repositioned as a focused General
Insurer. In total, the sale of its Health, Investments and Life businesses will release capital of $370 million*. Of
this, $120 million has already been distributed and it is intended that a further $114.5 million will be returned to
shareholders once the Life sale has been completed. At that time, TOWER bonds of $81.8 million will also be repaid.
Group Managing Director, Rob Flannagan said the half year results are pleasing as the company commences its new
direction: “This is a new era for TOWER. We have been able to release shareholder value through the period while also
preparing the business for its future as a focused General Insurer.
“Our General Insurance business delivered a solid performance for the period and after all capital returns is
exceedingly well capitalised, having more than $127 million in capital above minimum solvency requirements*. TOWER is
now strongly positioned to concentrate on being a simpler, dynamic and more agile business in a sector that is poised
for growth,” Mr Flannagan said.
TOWER has increased its provisions for the February 2011 Christchurch earthquake by a further $14.2 million after
taxation, driven by higher levels of inflation, the difficulty and delays in obtaining EQC data and new claims.
“TOWER is well advanced in its drive to be a focused General Insurer offering an attractive alternative to the big
Australian brands,” said Mr Flannagan.
TOWER Chairman, Michael Stiassny said: “In our 144 year history, we’ve proven our ability to adapt and evolve in order
to thrive and deliver significant value to our shareholders. On settlement of the Life sale we will have successfully
concluded our strategic review and will concentrate on TOWER being a leaner, focused General Insurer.”
With TOWER’s solid underlying performance and strong capital position, the Board has announced an unimputed dividend of
5 cents per share for the six months to 31 March. In addition, TOWER will adopt a dividend policy payout ratio of
90-100% of NPAT for the future. With the return of $114.5 million capital intended following the Life sale, TOWER’s
dividend reinvestment plan will not operate for the interim dividend.
* Following settlement of the Life sale which is subject to conditions including regulatory approval