Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site.

Challenger Ltd (CGF) share price jumps 7% on profit, dividend result

The Challenger Ltd (ASX:CGF) share price traded 1% higher today following the release of its half-year financial report.

The Challenger Ltd (ASX:CGF) share price traded 7% higher today following the release of its half-year financial report.

For context, the broader Australian share market or S&P/ASX 200 (ASX: XJO) was opened around 7012.5, less than 1% higher.

Challenger Ltd

Challenger is Australia’s largest provider of annuities. Annuities are financial products typically sold to retirees who seek reliable income.

Challenger was established in the mid-1980s and listed on the ASX in 1987. As of 2019, Challenger managed more than $80 billion between its investment portfolio, which is the sum of the money invested by retirees who buy annuities, and its fund management business.

Normalised V. Underlying Profit

In the Rask video above, I explain the difference between ‘underlying’ or ‘normalised’ results and ‘statutory’ results. Knowing the difference between these two numbers is essential to understanding many financial reports. For more free videos, subscribe to Rask Australia’s YouTube channel by clicking here – it’s free.

Challenger’s Key Results

This period Last period Change
Life sales ($b) 3.1 2.7 15%
Net profit 191 200 -4%
Cash flow 941 654 44%
Dividends 17.5 17.5 0%

Source: Challenger Ltd announcements; author calculations, millions AUD unless otherwise noted.

As can be seen above, Challenger’s life sales came in at $3.1 billion, up $0.4 billion. The company said this result reflected the company’s Japanese partnership as well as strong institutional sales here in Australia.

In the funds management business, assets grew to $86 billion, up 10%, with the company pointing to increased money flow from both retail and institutional investors.

Challenger’s net profit meanwhile was $191 million, down $9 million. However, using a ‘normalised’ and before-tax measure, Challenger delivered a before-tax profit of $279 million, up 3%.

Read Next: Northern Star’s BIG Half Year Report

On the cash flow statement, which is an important financial statement since it represents the underlying health of a business, operating cash flow was $941 million, up $287 million.

Finally, dividends declared by the company stood at 17.5 cents, flat year over year.

What Happens Next?

Challenger CEO Richard Howes said the company is on track to meet its 2020 full financial year ‘normalised’ before-tax profit goal of between $500 million and $550 million.

“The ongoing execution of our carefully planned strategy, together with our response to industry disruption has put Challenger in a good position to optimise performance in the current environment,” Howes said in the company’s ASX release.

“We see a significant opportunity in engaging more directly with prospective customers and increase support for advisers to better meet customer needs.”

Challenger shares were last seen trading at $8.87, giving the company a market capitalisation more than $5 billion.

[ls_content_block id=”14948″ para=”paragraphs”]

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content