Tower out of woods but treading carefully
Tower Limited, 15 months into a two year rebuilding program of the group, appears to have put its recent woes behind it with today’s net profit after tax announcement of NZ$20.5 million for the six months ending March 2004.
The performance is a marked improvement on the NZ$154.4 million loss for the corresponding period in 2003, and suggests last year’s suffering, both for the group and shareholders, may now have passed.
Tower managing director Keith Taylor however is not resting on his laurels, and remains vigilant in saying, while the performance is pleasing there is still much to do.
“Over the next six months the focus will be on further improving operational performance and further building momentum in earnings growth,” Taylor says.
Tower, which completed a major reshuffle of its board in September 2003 as part of a move to revitalize the NZ-based firm, conducted significant capital raising last year as part of the group’s bid to meet its large debt obligations.
For the latest performance, both Tower Australia and Tower Wealth Management contributed strongly to the overall group’s profits.
Tower Australia contributed $9.2 million in net profit compared to a $0.5 million loss for the corresponding 2003 period, while the wealth management division, which includesBridges Financial Planning, Tower Trust, Tower Asset Management and Tower Credit Union Alliance, delivered a $6.8 million net profit (up almost 50 per cent).
In particular Tower Trust’s $2.2 million net profit contribution was an 83 per cent improvement, while Bridges experienced a 20 per cent rise in net profit to $5.5 million and an almost doubling of its inflows - up from $54 million in the corresponding 2003 period to $99 million.
Tower chairman Olaf O’Duill says the results provide evidence of the group’s steady progress, but like Taylor he remains cautious.
“With improved operational effectiveness, Tower’s next priorities are new sales growth and further improvements in customer retention,” O’Duill says.
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