Tower climbs back to investors' relief

By Dunan Bridgeman

Friday 28th May 2004

Battle-hardened Tower shareholders finally received the news they were looking for yesterday when the company reported a substantial turnaround in half-year profit.

A key feature of the result was the performance of Tower Australia, which had been a particularly problematic part of the company.

The fund manager and insurer posted an after-tax profit of $20.5 million for the six months to March. In the previous corresponding period it lost $154.4 million.

The result was generally in line with expectations, with group operating earnings at $14.6 million compared with a net loss of $4.3 million a year ago.

Tower Australia, including the wealth management division, recorded a profit after tax of $18.2 million compared with $4.6 million a year ago.

Shares in Tower, 17% owned by Sir Ron Brierley's Guinness Peat Group, last traded up 6c to $1.55 at presstime.

Tower chairman Olaf O'Duill said the result provided evidence of steady progress after 15 months of rebuilding across the group. Growth was driven by a combination of operational improvements and a strengthened capital position supported by favourable investment markets.

The company continued to reduce debt this financial year, to $210 million from $427.7 million a year ago.

No interim dividend was announced although the Tower board reiterated its intention to resume dividend payments on further improvement of profitability.

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