Challenger’s hold on annuities takes profits higher
Challenger Internationalhas attributed a 24 per cent rise in its year-on-year profit figures to an increase in sales of annuities and funds management products.
The financial services group today reported net profits of $191 million for the year ending June 30, 2002, compared to last year’s result of $154 million.
This result was achieved by focusing on “organic” growth, and by hosting seminars and educational programs to boost annuity sales with investors and dealer groups, Challenger says.
Challenger now claims to service one third of the total market for annuities - or 5000 of approximately 15,000 products sold in the Australian market. However, it hopes to extend its hold on the annuities market by targeting retirees, and says 266,000 Australians retire every year.
Meanwhile, in spite of a drop in net profits in the group’s funds management division to $21.8 million from $29.6 million the previous year, Challenger says many of its funds experienced good inflows. The group says its Howard Mortgage Trust performed particularly well as investors looked towards more secure ‘income-style’ investments.
Growth in annuities enabled Challenger to expand its property acquisition activities, and its property portfolio is now worth $2.47 billion.
Challenger is likely to pay dividends at 6.6 cents per share, to be paid to shareholders on October 31, 2002.
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