Modestly profitable Challenger backs asset origination capability

Challenger Limited has emphasised its asset origination capability as being the engine of its growth plans on the back of reporting a 9% lift in normalised net profit after tax to $456 million.

The company’s statutory NPAT was up 48% to $192 million.

At the same time as announcing the solid profit result, Challenger confirmed it will be launching a new income platform that will issue ASX listed, unsecured fixed income notes backed by a portfolio of public and private credit.

It said the new offering combines the features of a fixed-income investment with the accessibility of a listed security in a fixed term structure.

Announcement of the new offering comes just months after major insurer TAL, owned by Japan’s Dai-ichi, took a significant stake in the company

Commenting on the result, Challenger managing director and chief executive, Nick Hamilton said the firm had delivered against its key objectives.

“Our business continued to demonstrate its standing as a retirement income leader,” he said. “Record retail lifetime and Japanese annuity sales reflects the success of our strategy to grow longer duration, more valuable business and contributed to total Life sales of $8.6 billion.”

Hamilton noted that Challenger had strengthened its relationships across the retirement market, adding new partnerships with superannuation funds, wealth managers and platforms.

“Most recently, our partnership with Insignia Financial demonstrates our ability to deliver retirement solutions for large clients, at scale,” he said.

Hamilton noted that the Board had determined a fully franked dividend of 29.5 cents per share, representing an increase of 11%.

Looking over the horizon, the company said that its earnings guidance will move from normalised NPAT to normalised basic earnings per share (EPS) “as a better reflection of shareholder returns”.

It said that it was targeting a normalised basic EPS guidance range of between 66 and 72 cents per share, with the mid-point (69 cents per share) representing a 4% increase on the 2025 financial year.