Challenger (ASX:CGF) waves flag for FY21 profit guidance

Company News

by Melissa Darmawan

Challenger (ASX:CGF) has reaffirmed its FY21 profit guidance and expects normalised net profit before tax to be at the bottom end of its guidance range of between $390 million and $440 million.

The annuity company said it’s expecting to achieve strong profit growth in FY22 with a guidance range for normalised net profit before tax of between $430 million and $480 million.

Richard Howes, the CEO and Managing Director said the $3.7 billion company has emerged from a period of disruption and reassured investors that a clear strategy is in place for growth.

“Over the past three years we’ve faced a confluence of disruptive external events and have emerged in strong shape, with a significant capital buffer, a market leading funds management offering and diversified revenue flows in our life business,”

“We are now continuing to build on our strong foundations to capture the opportunities the high growth retirement market presents”.

To underpin the company’s growth strategy, the group revised its target capital range to 1.3 times to 1.7 times the APRA Prescribed Capital Amount extending the upper end of the range and outlining an intention to operate at around 1.6 times.

Consistent with Challenger’s higher capital levels, the group has also revised its pre-tax return on equity target to the RBA cash rate plus 12 per cent.

Shares in Challenger (ASX:CGF) are trading 1.95 per cent lower at $5.54.

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