$4.2 billion ASX 200 financial stock sinks 7% on half year results

Let's see how this blue chip performed during the first half of FY 2025.

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.

Frustrated and shocked businesswoman reading bad news online from phone.

Image source: Getty Images

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.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Challenger. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

A man leans forward propped on his elbows as he holds his clasped hands to his mouth in a worried pose as he gazes at his computer screen in a home setting.
Earnings Results

5 things reporting season taught ASX investors about FY27

Five FY26 lessons that shape the year ahead.

Read more »

Two smiling colleagues looking at a tablet in a data centre.
Earnings Results

This broker is tipping 33% upside for Megaport shares

It could be time to buy the dip on Megaport shares.

Read more »

Elderly couple using laptop at home while drinking a cup of coffee.
Earnings Results

Why now is the time to buy MediBank Private shares: Expert

This stock comes with a strong yield and defensive profile.

Read more »

A gambler at a casino bets a pile of chips on one number.
Earnings Results

The Star Entertainment share price falls on FY26 earnings

The Star Entertainment Group posted a $307 million net loss for FY26, but cost cuts and stabilised revenues mark early…

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Financial Shares

Kina Securities lifts profit and dividend in half-year 2026 earnings

Kina Securities lifts 1H 2026 profit and dividend, buoyed by strong capital and digital initiatives.

Read more »

Businessman planning and analysing investment data.
Earnings Results

Kingsgate Consolidated posts record FY2026 earnings

NPAT jumps 843% and a dividend is declared on record gold and silver production.

Read more »

Woman at computer in office with a view
Earnings Results

Praemium posts FY26 revenue growth and completes platform integration

Praemium’s FY26 results show revenue growth, HNW momentum, and successful tech integration driving future opportunities.

Read more »

happy group of people
Earnings Results

Black Cat Syndicate posts record FY26 earnings and profit turnaround

Black Cat Syndicate reports record FY26 results, including a $374 million revenue surge and $86 million profit turnaround on strong…

Read more »