AUS
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CA
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IND
Highlights
- Annuity sales rose 20% to $1 billion in March quarter
- Full-year profit guidance tightened to $450–$465 million
- Shares climb over 6% on revised earnings outlook
Challenger Limited (ASX:CGF) saw its shares rise over 6% after the company tightened its full-year profit guidance and posted strong annuity sales growth for the March quarter. The investment manager reported a 20% increase in annuity sales, reaching $1 billion, driven by robust demand for long-duration lifetime and Japanese annuities.
While the annuity segment showed solid momentum, the broader business saw some pressure in asset management. Funds under management dropped by 5% to $115.2 billion, and group assets under management fell 4% to $125.6 billion. Despite these declines, the market reacted positively to the more focused earnings outlook and continued growth in high-value annuity segments.
The company narrowed its profit forecast for the financial year to a range of $450 million to $465 million, compared to the previous range of $440 million to $480 million. The revised midpoint reflects a 10% increase on its FY24 result, underlining the business’s confidence in its operating performance despite mixed conditions across investment markets.
Challenger (CGF) attributed the strong sales performance to strategic focus on higher-quality, longer-term products in both domestic and international markets. CEO Nick Hamilton noted that the continued growth in both Australian lifetime annuities and Japanese annuities aligns with the company’s efforts to prioritise value over volume.
The narrowing of guidance signals increased visibility over earnings in the final quarter of the financial year and was well-received by investors. The share price climbed 6.5% to $6.57 during early ASX trading following the announcement.
The momentum in long-duration annuity products highlights a shift in demand toward stable income solutions, particularly in times of economic uncertainty. With a strategic emphasis on securing long-term flows and deepening international partnerships, Challenger (CGF) appears positioned to build on its annuity platform despite near-term pressures in its asset management division.
Investors will be watching closely for how the company executes its strategy in the final quarter, particularly in maintaining its trajectory in lifetime annuity growth while stabilising funds under management across the broader business.
