Challenger shares surge as it tightens full-year profit guidance

The news: Investment manager Challenger has narrowed its full-year profit guidance after mixed third quarter results, sending its shares higher.

The numbers: Annuity sales during the March quarter increased by 20% to $1 billion with strong growth in long duration lifetime and Japanese annuities. However, funds under management were down 5% to $115.2 billion, while group assets under management slipped 4% to $125.6 billion.

The company tightened its full-year profit guidance to a range of $450 million to $465 million, from between $440million and $480 million previously. Shares in the company are up 6.5% to $6.57 in early trading on the ASX.

The context: CEO Nick Hamilton said Challenger saw continued sales growth across domestic lifetime annuities and Japanese annuities, supporting its focus on longer tenor and more valuable sales. The company said the mid-point of its revised profit guidance range represents 10% growth on its FY24 result.