TWR - Tower Insurance.

[ronaldson]

I thought this y/e 30 September result was a decent one with a number of signals that TWR is incrementally building a worthwhile business. That said, it is a good year to now have behind them, with the $5.5m net additional provisioning for the remaining Canterbury earthquake claims (when will the so-called over caps cease arriving?) and $2.6m for customer remediation for errors in applying the multi-policy discounts.

Forward dividend guidance is to maintain the current 6.5cps dividend (but will still be unimputed). The disposal of the PNG interest has enabled the digital rollout to the rest of their Pacifica involvement and a major hub is to be established in Fiji.

Gross Written Premiums are going gangbusters, as are MyTower registrations and the partner relationships, so seizing market share in the broader general insurance sector. Today's (and earlier) OCR increase means investment income will rise sharply in FY23 from FY22. Imagine if the $30m set aside for large events isn't required or is only partially required (the 5-year average is $16m) - what could NPAT look like then?

And they have the best IT platform to underpin growth going forward. It won't all be "blue sky" no doubt, but the foundation is certainly in place after a decade trying to get out from under the Canterbury earthquake boulder.

[bull....]

share price seems to have re-acted well to the results , steady increase. still hoping for a buyback with there surplus funds at some stage

[ronaldson]

Mmmm - did anyone else notice the unusually distant ex-date and payment date for the 4c final dividend?

Doesn't go ex until 17 January, nearly two months after the announcement, and is not paid until 1 February, so that is helping keep the share price up meantime. And since that dividend requires a full $15m from a NPAT of only $18.9m I expect the interest earned meantime over that period will be welcome to TWR. The dividend was a cent per share more than most anticipated, so the Board have bent over backwards to show holders they mean to reward them over time.

Note that the dividend is unimputed and therefore subject to 33% RWT, being a 1.32cps deduction when received "in the hand".

Given that in combination with the interim dividend the total payout for FY22 exceeded NPAT I suggest a buy-back is not imminent. But, as pointed out in 1671 above, we can hope that FY23 is to be a watershed outcome.

[Southern Lad]

Mmmm - did anyone else notice the unusually distant ex-date and payment date for the 4c final dividend?

The ex date and the dividend payment date are the same as the final FY21 dividend.

TWR has a significant level of tax losses (c. $85m gross losses at September 2022) so dividends will remain unimputed for many years to come. As the value of the tax losses is recognised as a deferred tax asset, use of the tax losses results in tax expense in the P&L but are not a cash cost, hence the company has cashflow to pay a higher dividend. If tax was being paid to IRD, the total gross dividend may be similar but there would be a mix of cash and imputation credits. So my read, don’t get to hung up about the absence of imputation credits.

[bull....]

big volume in twr today

[850man]

big volume in twr today

1,996,242 in one single SP transaction at 70c, otherwise normal level of bugger all. Not sure what that signifies.

[ronaldson]

Annual Report for y/e 30 September 2022 now available. Well-presented and worth a close read in my opinion.

The share price is consolidating around 72c now. I feel there are signs it will remain at or above 70c even when it goes ex dividend in mid-January as indicators are tracking positively.

[bull....]

Annual Report for y/e 30 September 2022 now available. Well-presented and worth a close read in my opinion.

The share price is consolidating around 72c now. I feel there are signs it will remain at or above 70c even when it goes ex dividend in mid-January as indicators are tracking positively.

benefits from higher rates and business is relatively sticky so should be a good yr for tower next yr bar no major weather events etc

[ronaldson]

And now we have the TWR CEO selling 116,420 shares on market at just over 70cps average, and despite being cum dividend. Apparently, permission was granted to do that so may be a personal reason behind the disposal?

[winner69]

And now we have the TWR CEO selling 116,420 shares on market at just over 70cps average, and despite being cum dividend. Apparently, permission was granted to do that so may be a personal reason behind the disposal?

Interesting he seems to have an Sharesies account

Awful lot of trades listed eh

Some say not a good sign when CEO sells