Challenger lifts earnings fuelled by annuity sales

Challenger has delivered a 3% increase in normalised net profit after tax to $468 million for FY26, alongside stronger annuity sales and a significant increase in shareholder returns.

The result was supported by a 19% increase in annuity sales to $6.2 billion, while total Life sales rose 12% to $9.6 billion. Annuity book growth reached 10.7%, reflecting continued demand for guaranteed income solutions in retirement and aged care.

Challenger managing director and chief executive Nick Hamiliton said the result reflected the execution of the group's strategy and growing momentum across its business.

"Our FY26 result reflects the successful execution of our strategy and the growing momentum across our business," Hamiliton said.

"We delivered strong earnings, increased annuity sales and continued to invest in the strategic priorities that will support Challenger's future growth."

Normalised earnings per share increased 3% to 68.1 cents, while statutory NPAT rose sharply to $506 million from $192 million a year earlier. Normalised return on equity was 11.6%, coming in above target.

Challenger said its retirement strategy had advance through new partnerships with superannuation funds, platforms and advice technology providers, aimed at making retirement income solutions more accessible.

Offshore reinsurance annuity sales reached a record $1.2 billion, up 25%, while the group also launched its $6 billion Challenger Annuity Backed Notes program in July to support annuity book growth and diversify funding.

The group declared a full-year ordinary dividend of 31.5 cents per share, up 7%, alongside a special dividend of 1.5 cents per share.

Challenger also increased its on market share buy-back program to $450 million, comprising the previously announced $150 million program and a further $300 million, subject to market conditions and regulatory approval.

For FY27, Challenger expects core basic EPS of between 45 and 49 cents per share, with the 47-cent midpoint representing a 6% increase on FY26 core EPS of 44.2 cent.

"We enter FY27 with strong momentum and focus on our growth trajectory, reinforcing Challenger's leadership position in retirement income and creating long-term value for shareholders," Hamilton said.