TWR - Tower Insurance.

[winner69]

Was wondering what a drop in interest rates means for TWR.

They got $8m interest income at the half hear, so lets say $16m full year on $267m investments, so getting 6%.
Might get cut in half if the NZ Reserve Bank drops us into the abyss?

Not ideal, but just a flesh wound if they can repeat the $70m odd NPAT prediction from this year...

Lower interest rates should help share price ...esp for those keen on divies

[percy]

https://www.nzx.com/announcements/435796

Tower Updates Guidance
8/08/2024, 08:30 NZST, MKTUPDTE
8 August 2024

Tower updates guidance

Kiwi insurer, Tower Limited (NZX/ASX: TWR) now expects underlying net profit after tax (NPAT) for the financial year ending 30 September 2024 to be greater than $45m, an increase on previous guidance which was for NPAT of more than $40m.

Tower’s business-as-usual (BAU) claims performance has been stronger than expected since its guidance update on 11 June 2024. This is due to both the continuation of Tower’s targeted underwriting actions to tackle the impacts of vehicle thefts and unseasonably benign weather in New Zealand.

Gross written premium (GWP) growth is expected to be at the top end of, or exceed, current GWP guidance of 10% to 15%.

This updated guidance assumes full utilisation of the FY24 large events allowance which is conservatively set at $45m. In a departure from recent norms, no large events have been recorded in the financial year to date. Any unused portion of the large events allowance at year end will increase underlying NPAT to improve the full year result. For example, if no large events were to occur in FY24, underlying NPAT would be increased by an additional $32m ($45m less tax).

ENDS

This announcement has been authorised by Blair Turnbull, CEO, Tower Limited.

[ronaldson]

https://www.nzx.com/announcements/435796

No large events yet. Cross fingers but it is looking like TWR could eliminate its accumulated losses almost entirely in FY24 and pay imputed dividends in FY25, which would be massive.

And GWP growth even higher than anticipated which indicates going gangbusters even in this recessionary environment. And remember that they have divested entirely from some (more risky) jurisdictions.

[bull....]

should be soon , its like an option as we get closer to expiration ( end of sept ) if there are no events it becomes more valuable

like we say , more valuable by the day

[Leemsip]

lets go $1.50

[Rawz]

The good news up cycle continues. Some will say it’s just good luck, like thanks to low claims, weather etc

Compare to say FBU whom are in a bad news down cycle. Broken boats n pipes etc. some will say it’s just bad luck..

Maybe you make your own luck? Comes from winning internally I reckon

[silverblizzard888]

Got to give it to Michael Stiassny, two of the best turnarounds this year has been under his Chair. Anyone going for the trifecta and betting on NTL (director there and not Chair) getting gold this year too.

[Poet]

No large events yet. Cross fingers but it is looking like TWR could eliminate its accumulated losses almost entirely in FY24 and pay imputed dividends in FY25, which would be massive.

And GWP growth even higher than anticipated which indicates going gangbusters even in this recessionary environment. And remember that they have divested entirely from some (more risky) jurisdictions.

Yes, I think you are right about this Ronaldson.

At the last FY report TWR was carrying $16m of deferred tax asset. If I'm not mistaken, this is available to offset future taxes payable so will cover a profit of $16/0.28=$57m. after that, the tax will be actually payable to IRD and will be available as imputation credits on dividends.

So if they don't use the large event allowance this year and hence make a before tax profit of $107m, they will fully eliminate their tax losses and will pay $107mX0.28-$16m=$14m to the IRD

With $14m in imputation credits available, they will then be able to pay a fully imputed gross dividend of $50m or gross 13c per share. 9.4c per share net with $3.6c of tax credit.

Disclosure: Holding more than is good for me and definitely not an accountant so above could be totally wrong DYOR

[Southern Lad]

Yes, I think you are right about this Ronaldson.

At the last FY report TWR was carrying $16m of deferred tax asset. If I'm not mistaken, this is available to offset future taxes payable so will cover a profit of $16/0.28=$57m. a

The $16m is a net deferred tax amount. If you look at Note 3.1 in the 2023 annual report, there is a disclosure that tax losses were $106 million with a tax effect at 28% of $29.4m. So unlikely to be any tax payable in 2024 even if the large event allowance is not used.

[Poet]

The $16m is a net deferred tax amount. If you look at Note 3.1 in the 2023 annual report, there is a disclosure that tax losses were $106 million with a tax effect at 28% of $29.4m. So unlikely to be any tax payable in 2024 even if the large event allowance is not used.

Thanks - always more complicated than it looks when it comes to tax