Fund manager and insurer Tower had an improved start to the year despite the slowing economy, and while offering a healthy interest rate on its latest bonds has benefited from recent reductions in interest rates.
Tower, whose share price has dived 23 per cent in the last year
mirroring the sharemarket performance, did not give details, but chairman Tony Gibbs told shareholders that first quarter results were tracking ahead of the same period last year.
As a result of recent reductions in interest rates, Tower had benefited from an upward revaluation in policyholder liabilities, he said.
The company's five-year $100 million bond offer, with a fixed rate of 8.5 per cent per annum paid quarterly, was proceeding well with $80 million taken up so far since opening yesterday.
Tower would use the proceeds to repay existing bank debt maturing in November, and to add to working capital.
New Zealand's number two health insurer and third-largest fund manager planned to develop its product range, increase market share and improve its operations ahead of an expected market recovery.
"And it is likely that there will be opportunities in the future for Tower to grow into a more significant player in the New Zealand market," Mr Gibbs said.
Tower's general insurance and health & life insurance businesses were growing in terms of policyholder numbers and revenue, but the investments business had been hurt by the loss of some mandates and by the investments market, chief executive Rob Flannagan told the annual meeting.
"However we are stable and profitable, which, in this market, can be regarded as a success."
The Pacific Island businesses continued to perform well.
Tower shares were up 3c at $1.53 in early afternoon trading.
- NZPA
