The Challenger Ltd (ASX: CGF) share price is in focus today after the company posted a 9% lift in normalised NPAT to $456 million and declared an 11% higher fully franked dividend for FY25.
What did Challenger report?
- Normalised net profit after tax (NPAT): $456 million, up 9% year-on-year, in line with guidance
- Statutory NPAT: $192 million, up 48%
- Normalised basic earnings per share (EPS): 66.3 cents, up 9%
- Normalised post-tax return on equity (ROE): 11.8%, up 110 basis points, above target
- Full year dividend: 29.5 cents per share fully franked, up 11%
- Total Life sales: $8.6 billion, including record retail lifetime and Japanese annuity sales
What else happened in FY25?
Challenger continued to advance its digital transformation, re-platforming its customer and investment technology with support from digital partners. The company broadened its credit asset origination capabilities, including the acquisition of a significant New Zealand residential mortgage book to support future growth.
Challenger also strengthened its retirement partnerships, including a new collaboration with Insignia Financial for the launch of MLC Retirement Boost and expanded its innovative product range with the launch of a listed income note platform.
On the funds management front, Challenger's Fidante platform welcomed a global long-short manager to its offering, while net profit for the segment rose 41% to $53 million. Total group assets under management closed FY25 at $123.9 billion, a 3% decline from last year.
What did Challenger management say?
Commenting on the result, Chief Executive Officer Nick Hamilton said:
In FY25, Challenger delivered against its key priorities – reporting a strong result as we achieved our financial targets, executed our strategic initiatives and progressed a digital transformation that will underpin the next phase of our growth strategy.
What's next for Challenger?
Challenger is shifting to normalised basic EPS guidance from FY26, targeting a range of 66 to 72 cents per share, with the midpoint representing a further 4% rise on FY25. The business highlighted a continued focus on digital transformation, simplification, and customer-centricity as it pursues the retirement market opportunity.
Forthcoming regulatory reforms, such as APRA's capital standards update for annuities, are expected to support industry growth and strengthen the business's balance sheet. Challenger aims to maintain its financial strength and broaden its range of income solutions for retirees.
Challenger share price snapshot
Over the past 12 months, Challenger shares have preformed in line with the market. Both Challenger shares and the S&P/ASX 200 Index (ASX: XJO) have risen 12%.
