Shareholders in Challenger, the country’s largest annuities provider, regained a dividend but lost a CEO in Tuesday’s full year results that were a bit ho-hum seeing the company had already guided to the reported figures last month.
The announcement revealed shareholders will get a full-year dividend of 20 cents a following solid sales and profits for the 2021 financial year.
The company declared a final dividend of 10.5 cents a share on Tuesday, compared to no final dividend paid last year as the pandemic saw the company (and many others) suspended payouts to conserve cash in case the situation worsened. That left the total payout up 2.5 cents from 2019-20.
Challenger reported statutory profit after tax of $592 million, a major swing from the $416 million loss reported the same time last year (which was hit by impairment losses).
The company said its “normalised net profit before tax was down 22% at $396 million and the ’normalised net profit after tax fell 19% to $279 million. Those falls in part reflected the problems caused by Covid and the repositioning of the company’s investment portfolios which crimped returns.
But the company is looking at a stronger performance in 2021-22, projecting a 15% rise in normalised net profit before tax to between $430 million and $480 million, with a mid-point of $455 million.
Sales of annuities were up 46% over the year to $4.6 billion. That helped assets under management (AUM) grow 29% to $110 billion.
Challenger’s CEO Richard Howes surprised though with an announcement he would be stepping down next March.
“We have emerged from a period of significant disruption in good shape and are well-positioned to deliver strong earnings growth going forward,” he said in Tuesday’s statement to the ASX
“The superannuation system continues to grow significantly, and retirement income reforms are progressing that will see increased focus on providing better retirement solutions.”
Challenger chair Peter Polson praised Mr Howe’s contribution during his 18-year tenure at Challenger.
“As a result of Richard’s deep understanding of capital markets and their impact on our business model, he will leave Challenger with robust and sustainable capital settings. He, together with the team, have developed a clear and compelling strategy which creates the platform for our next phase of growth,” Mr Polson said.
Challenger shares rose 1.9% to $5.89.
