Mixed results for Tower

Demerged entity boost profits

By Victoria Young
Fri 23 May 2008

Re-establishing the New Zealand and Pacific businesses remains a clear goal since Tower's trans-Tasman split.

Tower Limited has had mixed results since decoupling with Tower Australia, reporting a 28 per cent increase in net profit after tax of NZ$20.2 million in the six months to March 31, 2008.

Operating earnings from the combined health and life business were boosted by 28 per cent to $15.1 million, up from $11.8 million in the same period last year.

However, total revenue from continuing operations plunged 14.8 per cent to NZ$204.9 million for the six months to March 31, 2008, compared to the prior period.

In another blow, net profit after tax for Tower's investment arm dropped to NZ$2.3 million compared to NZ$3.6 million in the same period last year.

This was attributed to increased project expenses and compliance costs with KiwiSaver and the Portfolio Investment Entity regime, combined with lower investment returns in the turbulent share market. Tower KiwiPlan has more than 40,200 members.

"Our focus on customer service remains a top priority and we will deliver a standard of professionalism and excellent across all of our core fundamentals in all three of our businesses," Tower group managing director Rob Flannagan said.

"We operate in a highly competitive market where excellence, innovation, service and vision are key."

Tower's growth priorities are expanding and diversifying distribution channels and also making product improvements.

The company plans to improve efficiency by driving down costs and the ongoing renewal of legacy computer systems.

Go to today's news

More stories by this author