Challenger Limited has announced its half-yearly results, attributing a rise in profits to increasing appetite for annuities and life products.
In a statement to the Australian Securities Exchange yesterday, Challenger announced a normalised half-year net profit after tax (NPAT) of $149 million - indicating a 17 per cent increase on the prior corresponding period - and a statutory NPAT of $222 million, up from $20 million.
In addition, Challenger's life business achieved total sales of $1.98 billion, which the company says is an increase of 55 per cent on the prior corresponding period, with $1.06 billion in retail sales and $921 million in institutional sales.
According to the statement, the company has enjoyed a 48 per cent rise in revenues and 40 per cent rise in normalised profit over the past five years, while expenditure only grew by 9 per cent over that period.
Describing the results as a "great set of numbers", Challenger managing director and chief executive Brian Benari told InvestorDaily his company is in part a beneficiary of advantageous population changes.
"As you have demographic changes and more people are ageing and retiring they are looking for products that will provide them reliability of income in retirement and we have as a result we have seen our sales grow," he said.
"Our sales have been driven by the ageing population and the search for products that are capital-guaranteed," he added.
Mr Benari said the life segment of the market was largely unaffected by the global financial crisis, and that Challenger is "still looking strong" now that the worst of the crisis has subsided.
However, the positive results for Challenger are not only the product of beneficial societal changes but also of structural changes in its life product offering, Mr Benari said.
"We spent some time talking about the move to lifetime products this year and that is reflected in the results," he said. "Annuities today now have the ability to withdraw capital during the first 10 years, doing away with traditional concerns about annuities."
Mr Benari praised the work of financial advisers in raising the profile of annuity products.
