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Business Description: Challenger Limited (CGF) is an investment management firm focusing on providing Australians with financial security in retirement. Challenger operates two core investment businesses, Life division and Funds Management division.
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. CGFÂ´s simplified business model is based on annuity sales from its Life business and Funds Management, with around $40bn of funds and assets under management after selling most of its mortgage management business in late 2009. Management expects further growth in fund flows due to growth of existing boutique managers and investing in new managers over coming years.
Challenger reported NPAT of $222.0m for the half-year ended 31 December 2012. The increase in statutory profit reflects a significant improvement in investment experience due to improved global sentiment leading to a contraction in credit spreads. Revenues from ordinary activities were $810.9m, up 21.7% from the same period last year. Diluted EPS was 41.5 cents compared to 3.8 cents last year. Net operating cash flow was $261.0m compared to $400.6m last year. The interim dividend declared was 9.5 cents compared with 7.5 cents last year.
Nick Swales, Regional Director, Newcastle Office, Rathbones 27/10/2014 |
â€śIf you want to have a better performance than the crowd, you must do things differently from the crowd.â€ť Sir John Templeton.
Ric Spooner (Chief Market Analyst, CMC Markets) 20/10/2014 |
Today, Australian investors will not have to go it alone buying stocks as they did for much of last week. Bargain hunters this morning will be supported by the morale boosting encouragement of a 3% turnaround in the German Dax and a 264 point rally in the Dow Jones.
Carl Richards, director of investor education at the BAM Alliance 17/10/2014 |
â€śAs odd as it may sound, the sooner you start treating your investments like you treat life, the happier youâ€™ll be with the outcome.â€ť
William H. Gross, Janus Capital Group 16/10/2014 |
â€śFinancial markets are artificially priced. In the bond market, there is nothing normal about a three year German Bund yielding â€śminusâ€ť 10 basis points.â€ť
CMC Markets 8/10/2014 |
Share market indices around the globe are breaking down. While analysts cast around for reasons, itâ€™s clear that a time factor is in play. Simply put, many investors â€śfeelâ€ť a correction is overdue. How low could it go?
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