Challenger (ASX: CGF) shares tumble on guidance update

Stock

Challenger (ASX: CGF) $7.93 as at 23/01/2019

Event

The Challenger (ASX: CGF) stock price has tumbled this morning, the worst performing stock in the ASX200 (ASX: XJO) index, currently trading around -13% below yesterday’s close.

The fall comes on the back of management lowering guidance for the upcoming half year result and also for the FY19 due out later this year.

Challenger now expect pre-tax profit of $270m for the half year, and between $545m and $565m in the full year.

At the full year, the updated guidance suggests growth of 0-3%, well below previous guidance of 8-12% growth. The new figure is also ~6% below the consensus figures for the year end.

Key drivers of the disappointing update were poor performance in the Life absolute return portfolio and falling performance fees which fell 67% from the previous comparable period.

Despite the short term troubles, CEO Richard Howes remains confident in the longer term performances saying the company “continues to be well placed to take advantage of growth in the retirement income market.”

Challenger (ASX: CGF) Chart

 Challenger Limited (CGF)

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