Challenger Financial Services Group has made a bottom-line annual loss but says it's well funded and poised to add to its investment management capabilities.
The net loss for the 12 months ended June 30 was $90.7 million, which was worse than the loss of $44.2 million recorded in the previous year.
However, normalised net profit, which excludes mark-to-market movements and significant items, was $218.9 million, up 0.5 per cent.
Underlying operating cash flow for the year was $287 million.
At June 30, Challenger's life business held in excess of $530 million in surplus capital over its regulatory minimum and approximately $900 million in cash and cash-equivalents.
"Despite testing market conditions, we finished the year with an increase in normalised profits and enviable cash and capital balances to fund future growth," chief executive Dominic Stevens said on Monday in a statement.
"This position was further strengthened by last week's sale of our mortgage operations and the retention of 80 per cent of its earning in the life company.
"The group is very well-capitalised and capable of moving quickly on opportunities expected to arise for life and funds management."
During the 2008-09 year, an expected lower contribution from the funds management business, due to market-linked movements, was offset by growth in the life and mortgage divisions of 23 per cent and 36 per cent, respectively.Normalised earnings before interest and tax rose three per cent to $320 million.
Challenger last week sold its mortgage management division to National Australia Bank for $385 million.
"This year we proved our ability to generate strong operating cashflows and re-generate capital throughout the most difficult of market conditions,'' Mr Stevens said.
"We're well funded and poised to add to our investment management capabilities.''
Challenger will pay a final dividend of 7.5 cents, in line with the previous corresponding period.
The total dividend for the year was 12.5 cents, in line with previous year.
AAP