Image source: © 2025 Krish Capital Pty. Ltd.

Highlights:

  • Challenger reported a normalised NPAT of AUD 456 million in FY25, up 9% and in line with guidance.

  • Funds Management normalised NPAT increased 41% to AUD 53 million, supported by higher fee income and expense efficiencies.

  • Record retail lifetime annuity sales of AUD 1.1 billion were achieved, representing 26% growth.

Challenger Limited (ASX:CGF) released its financial results for the year ended 30 June 2025, announcing a normalised net profit after tax (NPAT) of AUD 456 million, an increase of 9% compared with the prior year and consistent with its earnings guidance. Statutory NPAT rose 48% to AUD 192 million, impacted by unrealised Australian office revaluations and alternative portfolio performance.

Normalised basic earnings per share (EPS) increased 9% to 66.3 cents per share. The company also reported a normalised post-tax return on equity (ROE) of 11.8%, up 110 basis points and above its stated ROE target. A fully franked full-year dividend of 29.5 cents per share was declared, up 11% on FY24.

Funds Management Performance

Funds Management, which operates through Fidante and Challenger Investment Management, reported a normalised NPAT of AUD 53 million, a 41% increase on FY24. The result was driven by higher net fee income from placement and performance fees as well as structural expense changes.

Funds Under Management (FUM) stood at AUD 112.8 billion at the end of FY25, continuing long-term growth momentum. Fidante expanded its platform by welcoming global long-short manager System Capital, further diversifying investment capabilities for clients.

Retirement Income and Sales Growth

Total Life sales reached AUD 8.6 billion in FY25. The annuity book grew by 4.9% while the broader Life book increased by 1.9%. Retail lifetime annuity sales reached a record AUD 1.1 billion, up 26% year-on-year. Challenger also reported record Japanese annuity sales of AUD 984 million, up 39% compared with FY24.

The Group broadened its asset origination platform to support retirement and income solutions. In FY25, it acquired a NZD 560 million residential mortgage book in New Zealand for Challenger Life.

Technology and Business Simplification

Challenger advanced its digital transformation program during the year. In partnership with State Street, it transitioned custody and administration services across several funds. In its Life business, the company continued re-platforming customer registry systems with Accenture, progressing upgrades across more than 70 systems. These changes aim to improve integration with advisers, platforms, and superannuation funds while enhancing operational efficiency.

Outlook

From FY26, Challenger will shift its earnings guidance metric from normalised NPAT to normalised basic EPS to better align with shareholder returns. For FY26, Challenger has provided normalised basic EPS guidance of 66 to 72 cents per share, with the mid-point of 69 cents representing a 4% increase on FY25.