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Business Description: Challenger Limited (CGF) is an Australian annuities issuer and provider of listed and unlisted investment products and services. Their products are distributed via a large network of third-party intermediaries and independent financial advisers.
Strategy Analysis: Annuities are in demand by retail investors moving into retirement and CGF is well placed to take advantage of this trend. Changing demographics clearly complement the business model. The two business divisions are aligned to changes in the industry and are well positioned to take advantage of their small positions in a large market that continues to grow. We expect strong long-term demand for lower-risk, lower-cost income stream products, with the industry focus on new products and expanded distribution. CGF´s simplified business model is based on annuity sales from its Life business and Funds Management, with around $28bn of assets under management after selling most of its mortgage management business in late 2009.
Challenger reported NPAT down 7.5% to $261.4m for the year ended 30 June 2011. The upward trend in underlying profit resulting from an increasing asset base, due to strong annuity cash inflows in the prior and current period, was offset by lower gains on the Group's debt investments compared to 2010 and losses on the Group's infrastructure assets over the year. Revenues from ordinary activities were $1.53bn, down 6.6% from last year. Diluted EPS was 50.7 cents compared to 50.4 cents last year. Net operating cash flow was $1.22bn compared to $229.1m last year. The final dividend declared was 9.5 cents, taking the full year dividend to 16.5 cents compared with 14.5 cents last year.
The Age 8/02/2012 | TEL AVIV. A Palestinian deal to form a unity government that includes Hamas has been condemned by the Israeli government as a decisive step away from the peace process.
The Age 8/02/2012 | A 3200-square-metre office-warehouse development in Laverton North has been leased and sold within a fortnight, fetching $2.7 million. Nathan Bingham, Colliers International's manager in charge, Melbourne west, negotiated both deals on 70 William Angliss Drive. The new tenant, RMD Industries, which has operated locally for more than 50 years, took out a lease with passing rent of $220,000. The subsequent sale reflected a yield of 8.15 per cent. "It was the combination of the quality of the ...
The Age 8/02/2012 | FOSTER'S has lost the rights to Asahi as the Japanese brewer of the popular imported beer mounts a fresh push into the Australian market. From April 2, Asahi Group Tokyo will import and market its flagship Asahi Super Dry through a new premium beverages division at its local subsidiary, Independent Distillers.
Sydney Morning Herald 8/02/2012 | ONE of the world's biggest pension funds, the California State Teachers' Retirement System (CalSTRS), has tapped the fund manager behind Australia's super industry to manage more than $US500 million ($466 million) worth of infrastructure investments around the world.
Sydney Morning Herald 8/02/2012 | IT TOOK some time but the Thai sugar giant Mitr Phol has gained a majority interest in MSF Sugar, owner of the Maryborough sugar mill in Queensland, and declared its $313 million takeover bid unconditional.
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