Challenger on track for three year plan

Challengerhas had a strong six months to December 31, 2001 which puts the group on track to make its targeted three yearly after tax profit of $200 million by the end of 2004.

Challenger made a net profit of $109 million in the six months to the end of last year which was more than double its profit for the corresponding period the previous year.

Challenger managing director Bill Ireland attributes the interim result to profits from the group’s growing long term annuity business. Other boosts came from the UK operations, particularly contributions from its annuity product — the Open Annuity - which attracts inflows of £10 million per month.

Challenger also reports growing inflows into its local investment products which have seen it positioned in the top 10 for funds inflow for the last two quarters, according to Assirt.

Ireland says Challenger’s reinforcement of its distribution networks over the past six months has paid dividends for the fund manager.

“We remain focused on building a dynamic distribution team that is constantly in contact with some financial planners, advisers, accountants and stockbrokers,” he says.

“This strategy is being borne out of the fact that today Challenger achieves one in every three long-term annuities sales in Australia.”

Ireland says as well as the growth of its UK business one of the highlights for Challenger over the last six months was the purchase of Credit Suisse First Boston’s (CSFB) 100-strong private client advisory unit, which Challenger relaunched as Challenger First Pacific.

Ireland says 2002 will be the year of organic growth for the group while it works to make a number of acquisitions.

“The past few years has seen the group grow rapidly through acquisition as well as organic growth. We are now concentrating on integrating these new businesses into the Challenger framework, and making sure they become profitable in their own right,” he says.

As part of this strategy, Steve Gilsenan, who has had 18 years atBT Investment Banke remain focus culminating in the position of chief financial officer, has taken on the chief financial officer role at Challenger. His role will be to assess each business unit and underlying products in terms of strategic fit, growth potential and prrofitability.