Challenger benefits from super reach
Challenger Limited has reaped the benefits of broadening its annuities distribution through superannuation funds and platforms as well as sale of Kapstream Capital, reporting an 18 per cent improvement in normalised profit after tax for the first half to $182 million.
The result has prompted the directors to declare an interim dividend of 16 cents per share fully franked.
Commenting on the result, Challenger chief executive, Brian Benari said it was a strong outcome with double-digit growth in every financial metric which influenced shareholder value — something which had been supported by growth in assets under management, margin expansion and an improved cost to income ratio.
"Underlying annuities sales continue to rise and are up 10 per cent on the first half of 2015," he said. We are seeing encouraging early signs from the recent launch of annuities on platform which already account for five per cent of annuities sales."
The Challenger chief executive clearly acknowledged the importance of Australia's ageing population as a driver for the business.
"We are five years into a 20 year cycle of retiring baby boomers," he said. "With over 700 Australians turning 65 every day, ensuring this fast-growing cohort doesn't run out of money is one of the great economic and social challenges of our time."
He said the superannuation industry was clearly responding to this and was moving ahead of impending regulatory reform by making retirement solutions more widely available to financial advisers and retirees.
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