New computer system costly for Tower

Stuff reports that Tower‘s new computer system has resulted in a costs blowout of around $1 million NZD for every month of delay.

The $30 million project (or so it was initially priced) faces software development issues and also a delay in commissioning of around five months, meaning the final project price will probably run to millions more.

Tower investors were told that the total project cost will probably run to the $36 million mark.

Brian Gaynor of Milford Asset Management, owner of about 4.5 per cent of Tower, hit back at claims that the group is ‘over-capitalised’, saying, “Yes, I agree we’ve got a lot of money, a lot of cash, and that’s not all a bad thing.”But having said that, the board is addressing our whole capital structure in the next two months and we’ll be looking at what and where we need it and what we’re planning on doing with it and, if appropriate, there might be a return of capital to shareholders but I’m not promising that here and now.”

Perhaps the funds need to go towards the computer system…..

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