TWR - Tower Insurance.

[JohnnyTheHorse]

TWR did a capital raise in September 2019 in large part because the RBNZ wouldn't count the then disputed EQC receivable for capital adequacy purposes. With that position now resolved (albeit for an amount less than sought), TWR will have excess capital that it may have difficulty returning to shareholders tax effectively due to an absence of any imputation credits. I therefore favour investing the excess capital to grow the business.

The ability of insurers to pay dividends continues to be under RBNZ surveillance due to COVID concerns on liquidity. Assuming TWR has a more than adequate capital position, small unimputed dividends hopefully won't be far off.

Ah yes I forgot about that, have to eat my hat! Intending to pay a 2.5cps dividend in May (3.8% interim, 8% yearly dividend?).

Should see a rerating with the dividend.

[bull....]

Ah yes I forgot about that, have to eat my hat! Intending to pay a 2.5cps dividend in May (3.8% interim, 8% yearly dividend?).

Should see a rerating with the dividend.

isnt the dividend as always dependant on no big claims

[JohnnyTheHorse]

Targeting full year dividend of 6cps. ~8.5% yield (refer to AGM address).

[JohnnyTheHorse]

Bullish break of weekly/monthly bull flag if it can sustain this, would like a bit more volume to come in. Also breaking above a multi year downtrend.

TWR Weekly.jpg

[Arbroath]

Targeting full year dividend of 6cps. ~8.5% yield (refer to AGM address).

As they are paying full income tax the dividends should be imputed so 6.0cps is a gross yield of about 11.5%

[nztx]

isnt the dividend as always dependant on no big claims

Does that include shelling out for a further portfolio of risks ?

[nztx]

As they are paying full income tax the dividends should be imputed so 6.0cps is a gross yield of about 11.5%

Most may be sure that TWR should be able muster a few creative im-pear-ments to maintain the recent past trajectory ..

[bull....]

Does that include shelling out for a further portfolio of risks ?

i agree with jaa that they probably brought the portfolio instead of risking losing all those customers and the 40 million revenue/ yr. cost $609 per customer approx so they wont get the full benefits of the purchase till the following yr.
and like you say bigger client base means potential risks are more claims on there diminishing investment revenue

[nztx]

i agree with jaa that they probably brought the portfolio instead of risking losing all those customers and the 40 million revenue/ yr. cost $609 per customer approx so they wont get the full benefits of the purchase till the following yr.
and like you say bigger client base means potential risks are more claims on there diminishing investment revenue

Good points there too..

[Southern Lad]

As they are paying full income tax the dividends should be imputed so 6.0cps is a gross yield of about 11.5%

As at 30 September 2020 TWR had tax losses of circa $90m, which a tax benefit of $25.7m had been recognised in the financial statements (assuming all recognised tax losses are NZ tax losses rather than Pacific Islands, etc.). As future profits are earned, the income statement records a tax expenses as these losses are used up. That doesn't mean any tax will be paid to IRD and therefore there won't be any imputation credit available. If TWR made a taxable income in NZ of $30m per year (whick looks about right given the NZ segment profit disclosed for 2020, adjusted for the EQC settlement write off), then it will be three years before they need to pay any tax to IRD and three years before they can attach imputation credits to dividends.