Challenger shares fall on Q1 sales hit
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More news: Shares in Challenger dropped on the ASX after the investment manager posted a 14% reduction in annuity sales during the September quarter.
Challenger shares were down 4.1% to $6.54 by 1pm AEDT, making it the third worst performing stock across the ASX 200.
Challenger reiterates FY profit guidance despite Q1 sales hit
The news: Investment manager Challenger has reaffirmed its full-year profit guidance despite a double-digit fall in annuity sales during the September quarter.
The numbers: Challenger reiterated its FY25 normalised NPAT guidance of between $440 million and $480 million.
During the three months to 30 September, group assets under management (AUM) grew 1% to $128 billion, driven by positive market movements in its funds management segment.
However, Challenger Life sales dropped 14% to $2.4 billion, impacted by a $619 million group lifetime annuity policy secured in the first quarter. Excluding this, total Life sales increased 10%, with notable growth in retail lifetime annuity sales (26%), Japanese annuity sales (74%), and Challenger Index Plus sales (55%).
Meanwhile, Challenger attributed a 22% fall in retail fixed term annuity sales to the company's "disciplined approach" to pricing shorter duration business.
The context: Challenger’s managing director and CEO, Nick Hamilton, explained that while sales grew in the September quarter, rising term pricing and an inverted yield curve affected fixed term annuity sales year on year.
Last month, Challenger shares tumbled after its largest shareholder Apollo Global Management more than halved its stake in the Sydney-based investment group.
What they said: "As more Australians transition to retirement and with the market now developing solutions consistent with their unique needs, we see significant opportunities for Challenger to continue achieving strong growth across our range of retirement income and other investment products," said Hamilton.
The source: ASX announcement
