TWR - Tower Insurance.

[winner69]

You know that how?

Didn’t say I knew ….said way things are going with Tower their run of bad luck might be continuing

[nztx]

Hey Mr TWR Chair -- How come this fabulous company - Tower which you and possibly
a few of your Board Companions willingly plonked bundles more dosh into shares recently
continues to operate in a certain untoward Manner to make many of us believe that an explosion
originating under your very Chair with loud proclamations "No Material Disasters this time"
and spraying forth a shower of Overdue Dividend sparks is all but impossible ?

Many of us believed that your acclaimed skills suggested certainty to succeeding at recovering golden eggs
from the worst of crashed burnt out wrecks - but alas this TWR ship has been successfully kept afloat,
alive and kicking under your precise careful guidance. However to date, No GOLDEN EGGS have been sighted -
not even the slightest glow off just one, even after the discovery party has finally returned after their earlier
request for their Caps be topped up for the long & dangerous expedition into the unknown ..

[Antipodean]

Well TWR did return to a first dividend payment in 5 years on 29/6/21, flipped total comprehensive profit from red to green 2018-2019, remained green in following year (though smaller).
Also worth noting the 19m lower bound estimate is still going to be higher than any of those years.
Net earned premium has been growing about since 2017 and underwriting profit along with it since 2019.
So this year is a disappointment perhaps compared to the initial FY guidance, but still an upward trend in the long term.

Had a look at some numbers over the weekend.

The fall in NPAT guidance from each step has seen TWR stay at 13-14 P/E each time. Seems the market has its price for now.
From 25m-27m @ ~.87, 22m-24m @ ~.76, and now 19m-21m @ .665.

Forecast eps has dropped from the peak of about 7.0cps to 4.5-5cps.

So given a 2.5c interim dividend has already been paid, and the 60-80% dividend policy (noted in last announcement), I would expect the final dividend to be 1.0-1.5c.
That's not great when looking at some of my sp purchases over the last 6 months, but back further and if I were to be topping up today that is still a 5% gross return in a bad year.

[ronaldson]

Earlier this year it was announced to NZX that on 12 March 2021 Tower paid $14m cash to acquire from ANZ a legacy portfolio of insurance policies for 23k people underwritten by Tower but provided by ANZ and National Bank to their customers between 1990 and 2009, thus avoiding future commissions on those policies and enabling those persons to be migrated to Tower's platforms.

Today, as an ANZ Bank customer but not a policyholder affected by the above transaction, on logon I was messaged an invitation to take up an ANZ motor vehicle insurance policy underwritten by VERO.

Given the former longstanding partnering between ANZ ( and the now subsumed National Bank ) this seems to lack good faith. In fact, I would have thought any sensibly constructed acquisition would have addressed this situation, at the very least a non competition clause for a reasonable period of time. That seems not to be the case, with the result that ANZ is now in active competition with Tower and presumably targeting all those historic policyholders still active customers in common with other existing customers. Given banking relationships are notoriously "sticky" this is still likely to be most of the policyholders transferred to Tower in March.

Another ? mark over ANZ ( there have been many over my time as a customer ) but also over Tower's negotiating skills if this is not a breach of the terms of the original transaction!

[Poet]

Great Result

2.5c per share final dividend and a $30m capital return via compulsory share buyback and cancellation (roughly 8c per share capital return)

Should light a fire under Share price

Microsoft Word - 211108 TWR FY 21 results announcement_DRAFT 5 (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com)

[bull....]

Great Result

2.5c per share final dividend and a $30m capital return via compulsory share buyback and cancellation (roughly 8c per share capital return)

Should light a fire under Share price

Microsoft Word - 211108 TWR FY 21 results announcement_DRAFT 5 (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com)

i thought pretty good result and at current prices a 10% gross yield when the imputations come back one day

[Filthy]

big wall up at 70c, hopefully it can smash through it in the next few days. good result. not much in the way of future guidance, but well positioned I think.

[bull....]

the buyback is a positive maybe for increasing divs in the future on a lower no of shares on issue. esp if they can maintain or improve profits

[ronaldson]

The actual result was as signaled by the most recent guidance. A good year to put in the rear vision mirror so far as large claim events is concerned. Confirmation of the 2.5c dividend is welcome but, together with the similar interim dividend, takes $21m which is 100% of the underlying profit.

A few CEQ claims still on foot, clearly the hardest ones. I wonder when/on what basis the excess solvency margin required by the regulator will be released.

The compulsory share buyback is a good move as perhaps the best application of surplus capital, given returns on conservative investments are manifestly poor just now. With the historic capital raise undertaken at a very low subscription rate this company has too many shares on issue currently and a reduction will support higher dividends per share in future which is the only real hope of driving the share price higher.

I have wondered if this company is a potential takeover target. It's financials are now much tidier, the CEQ situation seems under control, it does seem to have the best IT platform by comparison with peers, and has made lots of incremental operational improvements over recent years.

[850man]

http://nzx-prod-s7fsd7f98s.s3-websit...692/360484.pdf

CEO putting his money where his mouth is, always a good sign