Challenger (CGF) H2 2024 earnings summary

Executive summary

• Achieved strong FY 2024 financial performance, with normalized NPBT up 17% to AUD 608 million, exceeding guidance, driven by strategic focus on longer-duration, high-quality Life sales and cost discipline.

• Completed the sale of the bank, simplifying the business and enhancing capital flexibility to focus on core Life and Funds Management segments.

• Expanded partnerships with superannuation funds, wealth platforms, and reinsurance partners, and progressed in product innovation.

• Launched new brand and marketing strategy, invested in technology, and achieved gender diversity targets across leadership.

• Business model is more resilient, less capital intensive, and strongly capitalised, supporting sustainable long-term growth.

Financial highlights

• Group normalized net profit before tax rose 17% to AUD 608 million, above guidance.

• Normalized net profit after tax increased 14% to AUD 417 million; statutory NPAT fell 24% to AUD 130 million due to non-cash property revaluations and accounting changes.

• Assets under management grew 21% to AUD 127 billion.

• Fully franked full-year dividend of AUD 0.265 per share, up 10%, with a payout ratio of 44%.

• Life sales totaled AUD 9.1 billion, with lifetime annuity sales up 110% and annuity book growth at 5.5%.

Outlook and guidance

• FY 2025 normalized NPAT targeted at AUD 440–480 million, midpoint representing 10% growth.

• FY 2025 normalized NPBT guidance: AUD 640–700 million, midpoint 10% higher than FY24.

• Cost to income ratio target lowered to 32%-34% for FY 2025.

• Normalized ROE target: RBA cash rate plus 12%, currently ~11.2% post-tax.

• Dividend payout ratio to remain at 30%-50%.