Challenger still in black
Challenger Group has defied the current volatile conditions to report a lift in net profit after tax of 4 per cent to $106 million for the six months to December 31 last year.
The result was strongly underpinned by the group’s insurance operations, which largely offset the decline in its funds management operations.
Commenting on the result, Challenger chief executive Dominic Stevens said the underlying business continued to prove resilient in the worst market conditions in decades.
He said the earnings before interest and tax (EBIT) increases of 34 per cent in the life company and 21 per cent in the mortgage business had offset the lower contribution of the funds management business.
Stevens said the full reinvestment of the MetLife acquisition and widening spreads had assisted the life business to achieve a 34 per cent increase in EBIT, while the acquisition of AXA’s $1.3 billion portfolio led to growth in investment of 11 per cent.
He said the reduction in funds under management had been significant over the period but costs had reduced by 26 per cent to achieve a return on net assets of 22 per cent.
AUTHOR
Mike Taylor
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