Leaner Challenger posts $33 million profit
(24 February 2004 – Australia) Challenger Financial Services has recorded a post-tax net profit of $33 million for the half year to 31 December 2003.
Challenger CEO Chris Cuffe said the company’s results were based on a "modified accounting methodology" to help assist the market in understanding the underlying profitability, and spread, of the annuity business.
"While we are required to report our profits for the annuity business on a statutory basis under life company standards, we believe that the modified accounting methodology is a better reflection of the business fundamentals of the annuity division," Cuffe said.
The former Colonial First State boss said this way of presenting Challenger’s results provided a more comparable basis with funds management and mortgage finance products.
The company, which is one-quarter owned by the Packer family, has honed its business model to concentrate on annuities, mortgage lending and funds management.
Pre-tax profit for the annuities business calculated on this basis was $22 million for the half year while the company’s mortgage finance division contributed a pre-tax profit of $13.5 million.
Cuffe said the business was "very different to that of nine months ago" when another management team was in place.
"While we are required to report our profits for the annuity business on a statutory basis under life company standards, we believe that the modified accounting methodology is a better reflection of the business fundamentals of the annuity division," Cuffe said.
The former Colonial First State boss said this way of presenting Challenger’s results provided a more comparable basis with funds management and mortgage finance products.
The company, which is one-quarter owned by the Packer family, has honed its business model to concentrate on annuities, mortgage lending and funds management.
Pre-tax profit for the annuities business calculated on this basis was $22 million for the half year while the company’s mortgage finance division contributed a pre-tax profit of $13.5 million.
Cuffe said the business was "very different to that of nine months ago" when another management team was in place.
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