Tower NZ weathers economic slowdown

Tower Limited, the New Zealand arm of the group, has reported growth in its life insurance and overall profit despite some pain in its investment management division.

Group managing director Rob Flannagan said the New Zealand business is “not distracted by overseas relationships”, and added the group’s “underlying strengths will serve it well in a slowing economy”.

While the group’s pre-tax earnings were down on last year, profit after tax was up.

In its second annual report after splitting from Tower Australia in November 2006, Tower Limited reported net profit after tax (NPAT) of NZ$40.5 million for the year to September 30, 2008. This was up NZ$5.2 million on last year’s result of NZ$34.6 million.

Total revenue from continuing operations was down 5.5 per cent to NZ$454.8 million.

The group reported a NZ$5.8 million increase in NPAT in its health and life business to NZ$28.5 million, while reporting NPAT in its Tower Investments business of NZ$3.7 million, down from NZ$7.6 million last year. The group said this was the result of reduced funds under management and ongoing expenses related to Kiwisaver and portfolio investment entity systems.

The annualised return on shareholder funds was up slightly to 14.7 per cent, with the group to pay an after tax dividend of 8 cents per share fully imputed.

The group has a conservative gearing ratio of 14.6 per cent.