Tower Limited (ASX:TWR) Reports Strong FY24 Full Year Results

Strong Financial Performance

Tower Limited (ASX:TWR) reported a significant turnaround in its financial results for the year ending 30 September 2024. The company achieved an underlying net profit after tax (NPAT) of $83.5 million and a reported profit of $74.3 million, a stark contrast to the previous year’s reported loss of $1 million.

This improvement was attributed to a lack of large catastrophic events during the year, an enhanced business-as-usual claims performance, and 15% growth in gross written premium (GWP) to $595 million.

Dividends and Capital Return

Reflecting its solid FY24 results, the Board has declared a final dividend of 6.5 cents per share, bringing total dividends for the year to 9.5 cents per share. Additionally, Tower has conditionally approved a return of NZ$45 million in excess capital to shareholders through a mandatory share buyback, subject to high court approval and shareholder vote.

Chief Executive Officer Blair Turnbull stated, “Continued improvements in claims performance, sustained GWP growth, and enhanced business efficiencies, backed by benign weather, have delivered a positive result for shareholders.”

Operational Efficiencies and Customer Experience

The company’s management expense ratio improved to 31.4%, down from 32% in FY23. Tower’s focus on digital transformation and operational efficiencies has also significantly enhanced the customer experience, contributing to a net promoter score increase to +38, up from +28 in the previous year.

Mr Turnbull noted, “Our strategy of delivering simple and rewarding experiences combined with digital technology continues to bolster our business performance.”

Future Guidance

Looking ahead, Tower is projecting an underlying NPAT for FY25 between NZ$50 million and NZ$60 million, alongside continued GWP growth of 10% to 15%. The Board remains optimistic about the future despite tightening risk appetites and ongoing macroeconomic challenges.

The outlook assumes full utilisation of a prudent $50 million large events allowance, reflecting growth in Tower’s house insurance portfolio amid an easing inflationary environment.

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Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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