14 Sep 2012

Changes in the wind for Tower

5:12 am on 14 September 2012

Tower is considering a number of proposals to change its business structure, following a review just completed by its management.

The fund manager says its performance is not reflected in its share price and it wants more value for shareholders.

In the six months to the end of March, profits rose to $23.6 million, after the previous full year earnings were hit by the Canterbury earthquakes.

The company wants to improve its value for shareholders and is looking at various proposals - but is not wanting to be specific to Radio New Zealand about the options just yet.

But it says these include operational alliances and divestment of assets.

Earlier this month the company issued a profit warning after announcing it was setting aside more for payouts resulting from last year's Christchurch earthquake.

Despite that, the company has made profits in recent months, group managing director Rob Flannagan says.

He says the company has traded well and the share price is trading well, but it is still valued lower than the sum of the parts of the organisation, so the company needs to look at how to get that value to the shareholders.

Mr Flannagan says it's a time of transition for the insurance industry which is going through a lot of adjustments.

Chair Bill Falconer will step down now, instead of February, when the term expires, to allow a new chairperson to implement changes from the strategic review.

Shares in Tower were down 5 cents to $1.80 on Thursday.