Annuities drive strong Challenger result
Challenger Limited ended the financial year in good shape, posting a seven per cent increase in normalised net profit after tax of $248 million on the back of strong product sales and cash earnings.
The company said increased advertising, marketing and distribution activity and an outlook for ongoing equity market volatility had helped drive organic retail sales of annuity products up by 56 per cent to $1.46 billion.
As well, Challenger chief executive, Dominic Stevens said in the company's announcement to the Australian Securities Exchange he believed there was considerable scope for further growth in annuity sales.
"While Challenger's annuity sales have already grown by an annual compound rate of 33 per cent since 2006, we believe we're still in the early stages of a fundamental change in the Australian retirement savings market," he said.
Stevens said to match expected demand the company had grown its distribution team targeting 25 per cent retail annuity growth, 10 per cent retail book growth and a record $430 million in cash earnings for the life company.
"In the medium term we believe this growth rate is sustainable because baby boomers controlling 60 per cent of the assets in our trillion dollar super system are beginning to retire," he said.
Challenger rewarded investors with a final dividend of 9.5 cents, with the full-year dividend up 14 per cent to 16.5 cents.
AUTHOR
Mike Taylor
Recommended for you
Results are out for the latest sitting of the ASIC financial advice exam, with the pass rate falling for the second consecutive sitting.
Adviser losses for the end of June have come in 143 per cent higher than the same period last year, and bring the total June loss to over 350.
ASIC’s enforcement action is having an active start to the new financial year, banning a former Queensland financial adviser for 10 years in relation to fees for no service conduct.
ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay.
