Challenger Financial Services Group
Stock Code
Stock Exchange
Challenger Financial Services Group Limited (CGF) is a versatile financial services organisation with its core business focusing in administration and funds management platforms, annuities, mortgage financing and financial planning. CGF was listed on the Australian Stock Exchange on the 23rd of December 2003. CGF purchased the Choice Aggregation Services in September 2007 and included in its purchase is the Choice Home Loans, a mortgage broker and aggregator in Australia. The company’s annual revenue reaches a total of $1,158,900,000.
Financial services company and Australia's largest annuities provider Challenger Limited (ASX:CGF) have announced its half year financial results for 2013 to its shareholders and investors on the Australian stockmarket.
- Challenger Financial have announced a normalised Net Profit after tax (NPAT) of $149 million, up 17 percent. Challenger also announced a statutory NPAT of $222 million, up from $20 million.
Investment manager, Challenger Limited (ASX:CGF) have announced their full year profit results to the Australian sharemarket on Monday.
- Net profit: $148.5 million, down 43 percent year on year.
- Profit is down on the back of a volatile investment environment and re-valued fixed income assets.
- Normalised net profit: $296.8 million, up 20 percent.
Australian Diversified Financial company, Challenger Financial Services Group (ASX:CGF) has proposed to make $850 million, or 40 percent, of funds from the Howard Mortgage Fund, which was frozen in October 2008. The proposal, if approved by fund members on 28 October 2010, will see the capital made available to investors by December 2010.
Arrow Energy (AOE) was the overall best performing stock taking in a 12.61 percent increase. It was a mixture of drilling services, chemical manufacturing, financial services, energy and mining & exploration companies who were among the best performing stocks for the week 23 of 2008 of the Australian sharemarket: Boart Longyear (BLY), Incitec Pivot (IPL), Challenger Financial Services Group (CGF), Arrow Energy (AOE), Sundance Resources (SDL). These best performing stocks managed gains above 6.06 percent by the end of the trading week.
Boom Logistics (BOL) was the overall worst performing stock taking in a 25.5 percent decrease in its share price this week. Among the worst performing stocks for the past trading week (week 7 for 2008) on the Australian sharemarket were a mixture of financial services, electronic, implant devices, constructing and logistics: Challenger FSG (CGF), Cochlear (COH), Leighton (LEI), Boom Logistics (BOL), JB Hi-Fi (JBH). These worst performing stocks for week 7 of 2008 were ranged from 12 percent to 25 percent in their losses.
AED Oil was the overall worst performing Australian stock taking in a 31.9 percent decrease in its stock price this week. Among the worst performing stocks for the week 6 of 2008 on the Australian sharemarket were a mixture of property & funds management, metals mining, financial services and oil: Valad Property (VPG), Zinifex (ZFX), Challenger Financial Services Group (CGF), AED Oil (AED), IOOF Holdings (IFL). These worst performing stocks for week 3 of 2008 recorded losses above 13.5 percent by the end of the trading week.
Challenger Financial Services (CGF) have a Buy 2 share trading recommendation and a price target of $5 per share from analyst UBS. The analyst has observed that the Challenger Fiannacial has acquired $2billion book of annuities for zero cost. CGF will assume $2bn of assets (& liabilities) from MetLife around July 2007. CGF will take up to $10m of one-off restructuring charges for the integration of the portfolio. The transfer consolidates CGF's position as the number 1 provider of annuities in Australia. CGF's investment strategy for its Asset Management balance sheet has been diversified across fixed income, real estate and infrastructure. The MetLife portfolio is generating close to zero net income spread with 50/50 cash/fixed income asset allocation. CGF's opportunity is to progressively improve the investment spread via diversification seeking increased risk/reward. Earnings forecasts are unchanged at this stage, but they note material potential accretion in future periods. e.g. 2% net investment spread and $10m ongoing incremental costs translates to 10% potential accretion to FY09E earnings. They note that CGF delivered 3.5% underlying investment spread (plus realised gains) in 1H07. Positives for CGF the analyst found are: (1) earnings revisions (2) balance sheet capacity/flexibility (3) specialist funds capabilities emerging (4) investment spread expanding. Risks for Challenger Financial: (1) Mortgage Management potentially harvesting (2) lumpiness in asset recycling (3) execution on deals. Price Target is SOTP based.
Challenger Financial Services Group (CGF) has a Buy 2 share trading recommendation and a $5 price target from analyst UBS. The analyst have gone through the 1H07result numbers, which were good but challenging to dissect. Baseline NPAT $96m vs. UBS estimates of $87m. 1H07 reported NPAT of $113m was up 95% on pcp (& seq). Excluding $13m post-tax on CIF and $4.2m post-tax on rental one-offs $96m is a better base-line NPAT. Effective tax rate appears low at 24.8% but is not inconsistent with prior periods. 5cps dividend was vs. UBS estimate of 5.5cps. Another upgrade, this time due to: (1) higher investment spread in Asset Management (2) operating leverage, with EBIT margin 52% in 1H07 from 43% in 2H06. Earnings upside exists if CGF can continue to exceed RONA hurdles. Analyst earnings growth slowdown (9%/10% 08/09E) is predicated on reversion to 'normalised' RONA c.19%. CGF delivered 1H07 (vs. pcp): Funds Managemnt: EBIT +141% at EBIT mgn 30.6%, RONA 25% on FUM growth of 29.7%. Mortgage Managemnt: EBIT +19% at EBIT margin 59.4%, RONA 20.8% on Mortgage book growth of 12%. Asset Mgt: EBIT +46% (ex CIF) at 73% EBIT mgn, RONA 26.6% on Asset growth of 39.8%. Financial Planning: EBIT dn to $3.3m from $6m at EBIT mgn of 13.6%, RONA 4.5% and $7.7bn FUA. Positives observed by analyst include: (1) positive earnings revisions (2) balance sheet capacity (3) specialist funds capabilities emerging (4) investment spread expanding. Risks include: (1) Mortgage Mangement potentially harvesting (2) lumpiness in asset recycling (3) execution on deals. PT is SOTP based.
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