Challenger Ltd (ASX: CGF) shares are on the slide on Tuesday morning.
At the time of writing, the $4.2 billion ASX 200 financial stock is down 7% to $5.70.
This follows the release of the annuities company's half year results.
ASX 200 financial stock sinks on results day
- Total life sales down 12% to $4.6 billion
- Assets under management (AUM) increased 3% to $131 billion; Funds under management (FUM) rose 3% to $121 billion
- Normalised net profit after tax (NPAT) up 12% to $225 million; statutory NPAT surged 28% to $72 million
- Fully franked interim dividend up 12% to 14.5 cents per share
- Outlook: Reaffirmed earnings guidance
What happened during the six months?
For the six months ended 31 December, Challenger delivered a solid first-half profit result despite a sizeable drop in total life sales. It reported a 12% increase in normalised NPAT to $225 million.
Managements notes that the Life business maintained its positive momentum during the period, with record retail lifetime and Japanese annuity sales driving total Life sales of $4.6 billion.
A focus on longer-duration sales has strengthened the company's liability profile, supporting higher returns. Challenger also expanded its institutional relationships, securing new lifetime annuity and defined benefit opportunities.
The ASX 200 financial stock's funds management business performed well, with FUM rising 3% to $121 billion as active management strategies continued to deliver value. Meanwhile, the company has been making significant progress in re-platforming its customer and investment technology to support future growth.
In light of its profit growth, the Challenger board declared a fully franked interim dividend of 14.5 cents per share. This is a 12% increase on the prior corresponding period.
Management commentary
The ASX 200 financial stock's CEO, Nick Hamilton, was pleased with the half. He said:
In the first half of 2025, Challenger reported a strong result as we delivered against our financial targets and executed our growth strategy. At the same time, we made significant progress in re-platforming our customer and investment technology, which will enable future growth.
Further progress has also been made in strengthening relationships across our sales channels, including with institutional clients where we have secured new lifetime annuity and defined benefit opportunities in the half.
Outlook
Management has reaffirmed its guidance for FY 2025.
It continues to expect its normalised NPAT to be between $440 million and $480 million. The midpoint of this guidance range implies 10% annual growth.
Commenting on its outlook, Hamilton said:
Challenger enters the second half of the financial year in great shape. We have a business with strong fundamentals that is achieving our targets and will generate long term sustainable growth.
