TWR - Tower Insurance.

[Gerald]

https://www.nzx.com/announcements/352542

New CEO.

HY 20 results at the end of the month.

[Leemsip]

Im expecting a decent first half of 2020 with pre-tax profit of $18- 20m. Modelling this based on
- lower canty provision cost $1m,
- youi increase profit of $2m,
- large event in the pacific cost of $7m (probably overcooked this),
- lower claims in nz due to covid $1m upside,
- increase of 10% gross written premiums .
- increase in depreciation of $3.5m due to the new system and a mill or so of efficiencies due this as well.
- non-underlying nonsense of $2m (who knows)

Simplisticly setting up a full year of $40m before tax and $27m after tax - bang on guidance. This WILL mean a dividend announcement as the balance sheet is fine now! I expect them to be able to payout 70% (rather than 50%) due to the large non-cash costs now present in the P&L.

70% of $27m is $19m across 428m shares = 4.4c divi fully imputed.

Current share price is $0.62 so a net 7% return in an average year with 10% growth across the book.

[Cadalac123]

Im expecting a decent first half of 2020 with pre-tax profit of $18- 20m. Modelling this based on
- lower canty provision cost $1m,
- youi increase profit of $2m,
- large event in the pacific cost of $7m (probably overcooked this),
- lower claims in nz due to covid $1m upside,
- increase of 10% gross written premiums .
- increase in depreciation of $3.5m due to the new system and a mill or so of efficiencies due this as well.
- non-underlying nonsense of $2m (who knows)

Simplisticly setting up a full year of $40m before tax and $27m after tax - bang on guidance. This WILL mean a dividend announcement as the balance sheet is fine now! I expect them to be able to payout 70% (rather than 50%) due to the large non-cash costs now present in the P&L.

70% of $27m is $19m across 428m shares = 4.4c divi fully imputed.

Current share price is $0.62 so a net 7% return in an average year with 10% growth across the book.

Do you really think they’ll pay a dividend as well as paying out claim holders ..

[Independent Observer AUNZ]

$40m FY before tax is very optimistic I would have thought.

[tim23]

My hopes of dividend were dashed when they decided to refund customers for premiums while their cars not been driven much during lockdown.

[macduffy]

I wouldn't blame any company for being cautious about paying dividends in today's circumstances. Favouring policy holders is another prudent move when others have done this. But I'm neither a shareholder nor a policy holder, so what would I know.

Disc: Sold my TWR many moons ago.

[Leemsip]

I wouldn't blame any company for being cautious about paying dividends in today's circumstances. Favouring policy holders is another prudent move when others have done this. But I'm neither a shareholder nor a policy holder, so what would I know.

Disc: Sold my TWR many moons ago.

This has been a very testing share to hold for the last few years (Im a high conviction holder and will NEVER sell, despite constant disappointments). Its now or never for tower...... come on boys, lets see some reaffirmed guidance!

[Balance]

This has been a very testing share to hold for the last few years (Im a high conviction holder and will NEVER sell, despite constant disappointments). Its now or never for tower...... come on boys, lets see some reaffirmed guidance!

Looks like FY20 will be reduced to $24.5m - $27.5m, in the absence of any offsetting positives to Cyclone Harold?

Guidance was affirmed at the ASM on 14 Feb 2020 so :

http://nzx-prod-s7fsd7f98s.s3-websit...424/316745.pdf

There is no change to Tower’s previously communicated FY20 guidance of underlying NPAT of $27 - $30 million.

But there has been an additional significant weather event :

https://www.nzx.com/announcements/351949

This is $2.5m - $4.5m more than the $8m large event assumption in Tower’s FY20 market guidance.

[Balance]

My hopes of dividend were dashed when they decided to refund customers for premiums while their cars not been driven much during lockdown.

It may be that the company is feeling confident about their profit outlook which is why it decided to do the refund as a goodwill gesture (to be applauded).

Remember that Insurance is an essential service.

[850man]

Pressure in the public forum for insurance companies to do this, they really had no choice here other than to offer premium rebates. While this has to have an impact to profit, the bigger picture is their image in the eyes of customers and potential customers will get a boost from this move and will likely attract more customers but will certainly not turn customers away which has to be good long term. Let's hope the right balance is achieved between giving rebates and growing profit in the business.