NZ's Tower half year net profit falls 91 percent

WELLINGTON, May 22 (Reuters) - Mid-sized New Zealand insurer and fund manager Tower Ltd. (TWR.NZ: Quote, Profile, Research, Stock Buzz) on Thursday reported a 91 percent drop in half year net profit, as a one-off gain distorted the prior period.

The company said net profit after tax for the six months to March 31 was NZ$19.7 million ($15.3 million) after it booked a one-off gain of NZ$198.8 million from the split with its Australian business in the same period last year.

Net profit from continuing operations rose 28.6 percent to NZ$20.2 million.

Shares in Tower last traded down 0.5 percent at NZ$2.23, having traded between NZ$1.70 and NZ$2.64 over the past year.

The company did not declare an interim dividend.

The company is the subject of a partial takeover from investment firm Guiness Peat Group (GPG.NZ: Quote, Profile, Research, Stock Buzz), which has offered NZ$2.30 a share to lift its holding from 19.7 percent to 35 percent.

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

Analysts say the GPG offer, which values all of Tower at NZ$440 million, is likely to struggle because it is too low, and there is little chance of GPG moving to take over the whole company.

In an interview on March 31, managing director Rob Flanagan told Reuters the company wanted to see its net profit grow faster than inflation, and cement regular dividend payouts. ($1=NZ$1.29)