Chairman Bill Falconer said he was conscious that the company had raised capital from shareholders two years ago for growth opportunities and with nothing immediate on the horizon Tower would look at a capital return.
Shares in insurer Tower gained some lost ground today after the company said it would consider returning capital to shareholders having been outbid on acquisition opportunities.
Tower shares traded up 6c or 4.1% to $1.51 following today’s annual meeting when the board and management team updated shareholders on the year ahead.
Chairman Bill Falconer said he was conscious that the company had raised capital from shareholders two years ago for growth opportunities and with nothing immediate on the horizon Tower would look at a capital return.
Tower raised $81 million in 2009 but recently missed out on acquiring embattled Christchurch insurer AMI, since bought by IAG for $380 million.
Managing director Rob Flannagan said the company had been outbid by bigger balance sheets.
“Any acquisition opportunities that emerge will be evaluated to see if they will enable a step up in growth that the company wants to pursue, but that is not the strategy on which we are focused day to day. We will continue to look at acquisitions and divestments if this adds to shareholder value.”
Tower reported a 43% drop in full-year profit to $33.4 million in the year to September 30 largely due to costs of the Christchurch earthquakes and reduced revenue from investments.
Meanwhile director Dennis Wood has resigned from Tower after deciding not to stand for re-election when 35% shareholder Guinness Peat Group told the board it would not support his vote.
GPG has signaled selling its stake in Tower as it winds down its investment portfolio.
In a statement to media GPG chairman Rob Campbell denied suggestions GPG had forced Mr Wood to stand down from Tower.
“With 35% of the votes we do not control Tower but rather work together with the Board in the mutual interests of all shareholders,” he said.
“Tower is in the process of a strategic review and board renewal programme which we support. Declining to support a director whose term fell due simply reflects this position.”
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