Company Reports

Challenger is a major annuity provider in Australia, and its products are represented on platforms used by the majority of Australia’s financial advisors.

Challenger's operating profit after tax for fiscal 2026 increased 55% to AUD 470 million. Stripping out investment gains, core business earnings fell 10% to AUD 439 million. Guided fiscal 2027 maturity, or product outflow, rates of 26% are higher than fiscal 2026's 23%.

Challenger is a major annuity provider in Australia, and its products are represented on platforms used by the majority of Australia’s financial advisors.

Challenger's life book, comprising annuities and special institutional products, grew 1% in the third quarter of fiscal 2026, versus negative 1% in the same time last year. Meanwhile, funds under management declined 9%.

Challenger is a major annuity provider in Australia, and its products are represented on platforms used by the majority of Australia’s financial advisors.

Challenger's normalized earnings per share for the first half of fiscal 2026 increased 2% from last year. The firm reiterated full-year EPS guidance of AUD 0.66-AUD 0.72 per share, representing 4% growth at the midpoint.

Challenger is a major annuity provider in Australia, and its products are represented on platforms used by the majority of Australia’s financial advisors.

Challenger saw a 4% increase in product sales for the first quarter of fiscal 2026 to AUD 2.5 billion, from AUD 2.4 billion a year ago. Funds under management in its funds management business fell 8% over the same period to AUD 110 billion.

Challenger's normalized net profit after tax for fiscal 2025 grew 9%, in line with guidance. Operating margins improved and the firm highlighted growth opportunities from new partnerships, product innovations, and potentially looser capital requirements.

Challenger is a major annuity provider in Australia, and its products are represented on platforms used by the majority of Australia’s financial advisors.

Most of our covered ASX-listed asset managers have underperformed the S&P/ASX 200 Total Return Index since the start of 2025.

Challenger reported an increase in product sales for the third quarter of fiscal 2025 from a year ago, across retail lifetime, domestic fixed term, and Japanese annuities. A new business partnership was announced with NGS Super. Fund management continued to see net outflows.

Challenger’s annuity sales amount to roughly 80% of yearly annuity sales in Australia, while its products are represented on platforms used by the majority of Australia’s financial advisors.

ASX-listed asset managers saw mixed shareholder returns relative to the S&P/ASX 200 index over the year to March 2025.

Challenger’s annuity sales amount to roughly 80% of yearly annuity sales in Australia, while its products are represented on platforms used by the majority of Australia’s financial advisors.

Challenger’s annuity sales amount to roughly 80% of yearly annuity sales in Australia, while its products are represented on platforms used by the majority of Australia’s financial advisors.

Challenger's normalized NPAT for first half fiscal 2025 grew by 12% from first half fiscal 2024. However, shares still declined intraday.

Total shareholder returns for most asset managers under our coverage, excluding GQG and Pinnacle, still trail the S&P/ASX 200 Index since 2022, when rates rose from historic lows. In 2024, shareholder returns for our covered asset managers were mixed.

Average earnings growth for the seven asset managers we cover—Challenger, GQG, Insignia, Magellan, Perpetual, Pinnacle, and Platinum—are likely to improve through to fiscal 2025, driven by better fund flows compared with fiscal 2022-23. However, we expect earnings growth to moderate starting fiscal 2026. More than half of these firms—Insignia, Perpetual, Magellan, and Platinum—will likely continue experiencing net outflows over the medium term.

No-moat Challenger's sales momentum for the first three months of fiscal 2025 was relatively slow, with total life product sales down 14% from the previous corresponding period. However, this included a one-off large institutional policy win in the PCP. Excluding this anomaly, life product sales had increased by 10%. We believe Challenger is still on track for maintainable sales growth and margin expansion. Key positives from the latest business update include ongoing growth in longer-dated, higher-margin retail lifetime annuity sales, and strong Japanese annuity and institutional guaranteed-return product sales. We maintain our fair value estimate at AUD 7.50 per share, with shares screening as undervalued at current levels.