Challenger NPAT 19% down in FY21
Challenger has posted a 19% drop counting year-on-year in its normalised net profit after tax (NPAT) to $279 million for the financial year 2021.
In its announcement to the Australian Securities Exchange (ASX) the company said it repositioned its investment portfolio during the pandemic which included holding higher levels of cash and liquid assets and enhanced business risk settings.
At the same time, its net profit before tax (NPBT) stood at $396 million, which was within the firm’s guidance range and reflected “proactive decision to maintain more defensive portfolio settings during the pandemic”, while statutory net profit after tax was $592 million.
Challenger said the group’s assets under management (AUM) grew 29% to $110 million, helped by strong contributions from both the life and fund management businesses.
The firm said its funds management overall delivered exceptional performance, with net flows reaching a record $16 billion, which represented 20% of opening funds under management.
Following this, Challenger posted record net flows of $106 billion which demonstrated a 30% growth and outperformed the broader market.
“Our funds management business again delivered a standout performance, with funds under management up 30% to $106 billion, supported by strong institutional and retail flows and promising signs from our strategy to diversify globally. Challenger is now Australia’s third largest and one of the fastest growing active fund managers,” Challenger’s managing director and chief executive, Richard Howes, said.
“This year, we have taken decisive action to set up the business for future growth – executing our strategy to diversify revenue, repositioning our investment portfolio and strengthening our balance sheet.
“Following our decision to reposition the investment portfolio during the early stages of the pandemic, as flagged, we gradually deployed significant cash balances into returning assets throughout the year, with the full benefits to be realised next year.
“Underscoring confidence in our business, the board resumed paying dividends after pausing in the early stages of the pandemic, declaring a full year dividend of 20 cents per share.”
Recommended for you
There is one specific risk that is a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the AICD.
Global fund managers are shunning bonds, with the asset class seeing the largest drop in allocations in more than 20 years.
Australian Ethical has seen its funds under management reach $10 billion, driven by organic customer growth and superannuation contributions.
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
