Challenger Rises on Quarterly Results

Shares in Challenger Ltd soared today and ended almost 10% higher at $7.50 a share.

The Challenger share price is on the move after the financial services company released its results for the third quarter of FY22.

Some of the key points from the announcement include:

  • Life sales of $2.7 billion, up 10% for the quarter

  • Life book growth of $500 million, or 2.8%, for the quarter

  • Group assets under management (AUM) of $106 billion

  • Normalised net profit before tax expected to be towards the upper end of $430 million to $480 million FY22 guidance range

Total Life net flows were $491 million for the quarter. This included annuity net inflows of $286 million and inflows of $205 million to its Other Life segment. Further, sales to institutional clients grew by 10% to $2.1 billion during the period. Growth was underscored by “strong Challenger Index Plus sales of $1.1 billion (up 30%) and institutional term annuity sales of $1.0 billion”.

Excluding its sale of Whitehelm Capital, FUM reduced by 3% for the quarter, and included “negative investment market movements of $1.9 billion and net outflows of $1.7 billion,” Challenger says. The company is also well capitalised with 1.65 times the minimum amount of ‘prescribed’ capital set by APRA.

Managing Director Nick Hamilton stated:

“Product innovation remains a key priority and our market-linked annuity reflects our commitment to meeting the needs of more customers. The market-linked annuity has now been added to approved product lists of key financial advice businesses and initial feedback and engagement from financial advisers has been positive.”

In the last 12 months, the Challenger share price has climbed 31%.