Tower nudges profit higher

By Phil Boeyen, ShareChat Business News Editor

Wednesday 23rd May 2001

Financial services and insurance company Tower (NZSE: TWR) has reported a small interim profit increase despite a considerable drop in sales and pre-tax operating surplus.

Tower says to the end of March its profit rose 1% to $38.9 million compared with last year, reflecting a 25% increase in operating margins.

However sales for the period fell to $621.8 million from $896.2 million previously, and its operating surplus before unusual items and tax fell from $75.7 million last year to $49 million.

MD, James Boonzaier says has described the interim profit as "very satisfactory given the difficult market conditions."

He says the period was one of consolidation and change for the company, with the integration of three acquisitions - Bridges Financial Services and IOOF Trustees in Australia and AXA Health in New Zealand. Seven of the group's eight operating companies also underwent restructuring.

"The result is in line with expectations and Tower is now in a good position to achieve growth in the coming months, particularly if the investment climate is a little kinder," says Mr Boonzaier.

"Cost savings to be gained from the integrated operations are projected to be $7-$8 million per annum, and the integration of Bridges, together with the establishment of Goldridge, provide a strong financial planning backbone for growth."

Excluding foreign exchange effects Tower had asset growth of $600 million over last year, with total assets under management of $21.2 billion at the end of March.

Mr Boonzaier says the company has maintained its position as the country's top retail funds manager while continuing to build its position in the Australian wealth management sector.

Tower plans to pay an interim dividend of 14 cents per share, the same as last year.

Comments from our readers

No comments yet