NZ's Tower full-year profit rises on tax credit

WELLINGTON, Nov 21 (Reuters) - New Zealand insurer and fund manager Tower Ltd (TWR.NZ) on Friday reported a 17 percent rise in full-year profit on a tax credit, but underlying earnings showed signs of softness.

Net profit for the the year to Sept. 30 was NZ$40.5 million ($21.1 million), compared with NZ$34.6 million for the same period last year.

The company increased its dividend to 8 cents a share from last year's 6 cents a share.

Tower is the third-largest retail fund manager in New Zealand and the second-largest health insurer.

Formerly operating as one company in New Zealand and Australia, it split into separate listed companies in November 2006, saying they were distinct operations needing differing strategies.

Total revenue from continuing operations for the year to September fell 5.5 percent to NZ$454.8 million.

Insurance income was higher, but returns from the funds management operation were down.

In June, investment firm Guiness Peat Group Ltd (GPG.NZ) upped its stake in Tower to 35 percent from 20 percent. ($1=NZ$1.92) (Reporting by Gyles Beckford)