The reported profit of $44.2 million for the March half-year was inclusive of abnormal items of $30.7 million made up of a gain on sales of divested businesses, transaction costs, an IT system write-down, further provisioning for Christchurch and a revaluation of Australian liabilities.
Tower declared an interim dividend of 5c per share and indicated it would adopt a dividend policy payout ratio of 90% to 100% of reported profit in the future.
The shares, which had fallen on Monday, bounced back 7.65% yesterday to trade up 13c to $1.83. Shares earlier reached a high of $1.88.
Mr Flannagan said the six-month results were pleasing.
''This is a new era for Tower. We have been able to release shareholder value through the period while also preparing the business for its future as a focused general insurer.''
The general insurance business delivered a ''solid performance'' in the period and, after all capital returns, was ''exceedingly'' well capitalised with more than $127 million in capital above minimum solvency requirements, he said.
Tower has been selling assets to transform itself after a strategic review with its major shareholder GPG winding down its own portfolio of assets.
Since November, the insurer has sold its life business to Fidelity Life Assurance for $145 million in cash and liabilities, its investment unit to Fisher Funds for $79 million and its medical unit to Australia's nib for $102 million.
The insurer did not give guidance for the full year, but said the final result would be affected by one-off items and the cost of restructuring the group in what's seen as a transition year.
Tower's net operating revenue fell 3% to $140.4 million, even as net premium revenue gained 13% to $112.1 million.
Forsyth Barr broker Haley Van Leeuwen said the general insurance business, the main operating business of the downsized group, reported an operating profit from normal trading of $13.9 million, up from $13.6 million in the previous corresponding period.
''Tower intends to make a capital return of $114.5 million to shareholders in July. We had been expecting a capital return of around $100 million.''
Tower also intended repaying the $81.8 million of bonds and would be debt free.
With the sell-down of the investment arm of the business and the health/life insurance, Tower was left as a niche player in the general insurance sector, Mrs Van Leeuwen said.
