Challenger: Benefits of Positive Mix Shift Evident

No-moat Challenger is on track to deliver maintained margin and earnings expansion. We note several ongoing positive trends: Robust growth in lifetime annuity sales, rising proportion of longer-dated annuity sales and new business tenor, and further reductions in product maturity rates. The benefits of this mix shift toward longer-dated products are evident. Guidance for fiscal 2024’s pretax profit increased toward the top end of its guided range—previously "top half"—despite a 10% decline in overall annuity sales in the year to March 2024, relative to the previous corresponding period. This points to revenue from the current asset book being considerably more margin-accretive than in prior years.