Challenger posts $44m loss, CEO resigns Challenger Financial...

Challenger posts $44m loss, CEO resigns


Challenger Financial Services Limited (CGF) reported a full year net loss of $44.2 million compared to a profit of $255 million last year. The company also announced that CEO Mike Tilley had resigned.

Challenger said that Mr Tilley would step down from CEO on August 31, to be replaced by current deputy managing director Dominic Stevens.

Chairman Peter Polson said Mr Tilley came to Challenger with a clear mandate; he had fulfilled that mandate and the board had been considering the right structure for the next phase of the company's development.

"Mike has developed a strong senior team and there was no question about succession, Mr Polson said.

"The board looks forward to working closely with Dominic during the next phase of the company's development."

The asset management company said the result reflected negative mark-to-market impacts, but it remained confident on delivering long-term EPS growth.

Normalised earnings per share increased by 12% to 37.1c per share and Mr Stevens said Challenger Financial remained confident of generating double-digit EPS growth in the long term.

"The current difficult market conditions are set to continue but that the business was well placed to manage the cycle," Mr Stevens said.

"The strategies we have put in place have put us in a very good position in terms of liquidity and capital, providing some insulation from the difficulties of the current environment."

The company said that normalised NPAT, excluding significant items and investment, was $217.9 million, 20% above the previous financial year and normalised EBIT rose 21% to $320 million, reflecting cost management initiatives.

These results surpassed consensus reports from seven investment banks, which had forecast an NPAT and EBIT of $213.55 million and $313.55 million respectively.

Challenger said it would pay a final dividend of 7.5c, steady with last year and in line with the company's own guidance.

At 1010 AEST, shares in Challenger gained 3c to $2.28.