Full Year 2025 Tower Ltd Earnings Call Transcript
Key Points
- Tower Ltd (ASX:TWR) reported a record underlying profit after tax of $107.2 million for FY25, driven by strong operational and business performance.
- The company returned $45 million of capital to shareholders and declared a fully imputed final dividend of $0.165 per share, bringing total dividends for the year to $0.245 per share.
- Gross written premium increased to $600 million, with strong policy growth and customer numbers rising to 319,000.
- Tower Ltd's risk-based pricing strategy has led to a 21% reduction in expected average annual loss from flooding, improving portfolio resilience.
- The company has successfully renewed its reinsurance program, securing comprehensive cover at competitive rates, which is expected to reduce reinsurance premium expense in FY26.
- Tower Ltd's reported profit for FY25 was $83.7 million, impacted by strengthening provisions for Canterbury earthquake claims and customer remediation costs.
- The company experienced a decline in average premiums due to a soft rating cycle, lower inflation, and reduced claims from a lower risk portfolio.
- Net investment income decreased by $2.4 million compared to FY24, with running yield on the core portfolio declining steadily.
- The management expense ratio remained stable at 31%, with increased investment in strategic initiatives and inflationary pressures impacting costs.
- Tower Ltd's large event allowance for FY26 has been reduced from $50 million to $45 million, reflecting improved risk selection but also indicating potential exposure to future large events.
Good day, and thank you for standing by. Welcome to Tower Limited full year results announcement call 2025.
(Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Michael Stiassny, Chairman of Towers. Please go ahead.
Good morning, and thank you for making the time to join us for this call and presentation of our 2025 full year results. With me in Auckland is our Chief Executive Officer, Paul Johnston; and Interim Chief Financial Officer, Angus Shelton, who will take you through the results and answer your questions. I think we can all agree that it's been a great year for Tower shareholders. FY25 record underlying result demonstrates a strong business, delivering value today whilst continuing to build for tomorrow.
This year, we returned $45 million of capital to shareholders, and I'm pleased to announce that we have declared a fully imputed final dividend of $0.165
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