TWR - Tower Insurance.

[bull....]

Is this little bit a signal of a further downgrade ....or a bit of let’s hope it’s all OK

Separately, following a review of the FY21 reinsurance programme, there could potentially be an increase in the full year reinsurance costs for FY21. It is anticipated the additional costs, if any, would be within the tolerances of this guidance.

if they didnt adjust re-insurance cover it would mean you would as the consumer pay more for your cover. nothing sinister in it as it also protects there risk as well meaning less chance of them going bust due a big adverse event.

[Beagle]

I ran the ruler over these this morning and got a fair value of 64 cents.

[Balance]

over-reaction? the volume thus far today / yesterday arvo is not huge.

The low volume usually mean one of two things when there is a profit downgrade or price sensitive development :

1. Over-reaction as you think, or

2. Buyers' retreat which necessitates sellers going ever lower to get out of the stock in volume.

2 seems to be the case now with TWR here as price has fallen rather sharply imo.

Buying depth looks very thin while selling depth continues to build up substantially.

[Balance]

Love the lol - can see you are nervous.

Chill, bull .... the trend is your friend as you well know so do whatever your trend tells you to do, right?

Good luck, bull ..., trying to get out of 50,000 shares today!

[bull....]

Good luck, bull ..., trying to get out of 50,000 shares today!

lol i sold my trading portion at 87 i hold my divi portion long time yum yum 8% divvies

[Balance]

lol i sold my trading portion at 87 i hold my divi portion long time yum yum 8% divvies

Really?

Now where & when did you post that fact?

[winner69]

Hard to get enthused over Tower's profit trend

In spite of all the rhetoric about all the exciting things they are doing profit over three years basically gone nowhere-

F19 $27.4m
F20 $28.4m
F21 $26m expected

[Antipodean]

The combined effect of the large house claims and investment 'income' knocks 5.7m off the figures for the year. In the world where this didn't happen they would have well beaten guidance, but insurance is about sudden unexpected events so have to re-consider when these things happen. This could have been slipped in the announcement next week but at least front footing it during the middle of the week (rather than a 4pm Friday release) is a decent sign.

Large house claims can't be helped retrospectively however they are able to incorporate trends into new premium ratings for upcoming years.
Investment income is pretty pitiful and can only wonder if holding all those assets in fixed yields is partly related to capital requirements which are expected to ease in the future.

Share Price of .64 / 270m mcap implies a 10-10.8 p/e with annualised 7.81% gross dividend yield certainly I would agree there is value there! (some would say more than fair value). At sp of .77 you are looking at 12-13 p/e with 6.49% gross dividend yield where we have currently fallen to. Value? Up to you.

Twr advises expected gwp to exceed by 5% previous year so is close to $400m, which is up from just over $350m at ye 2019. Despite the ups and downs net earned premium tends to trend up with gwp. In addition total comprehensive profit is still in uptrend even with this downgrade.

TWR	2017	2018	2019	2020
Net Earned Premium	256915000	268842000	290020000	315332000
Total Comprehensive Profit For the Year	-7677000	-6331000	17871000	11016000

Worth noting the wording on reinsurance has 'if any' and also notes that it wouldn't affect guidance (will this hold?).

Still some silver lining it is worth noting the part where CEO states :

Tower remains confident that our current strategy delivers sustainable value, and ... will add significant growth in premiums and profitability, beginning late in FY21 but with the full benefits realised in FY22 and beyond

So depends if you are in for (and believe) the long story or not.

[850man]

Someone bought a million shares a bit earlier. Wonder what they know that the rest of us don't

[Balance]

Someone bought a million shares a bit earlier. Wonder what they know that the rest of us don't

Someone sold 1 million shares so you could wonder the same? What does the seller know?