Challenger expects earnings growth

Retirement funder Challenger has reiterated its full-year financial targets and says the performance of its investments has improved.

Chief executive Brian Benari told Challenger's annual general meeting on Monday that the performance of the funds management business had improved in the first five months of the 2012/13 financial year.

Challenger's net profit fell by 43 per cent in the 2011/12 financial year to $149 million, due mainly to falls in the value of its investments held by the funds management business.

"We expect the 2012 negative investment experience to largely reverse over time because the assets are of high quality and we typically hold them through to maturity," Mr Benari told the meeting.

"For (the) 2013 year to date, we have experienced positive investment experience as markets have been better behaved."

He also confirmed the company's previously issued financial targets for the 2012/13 financial year.

Challenger expects its life business, which provides funding for retirement through products such as superannuation and annuities, to make cash operating earnings of between $440 million and $450 million.

That would be up from $436 million in 2011/12.

Challenger also aims to increase sales of retail annuities by 15 per cent from the previous year, and increase the size of its retail annuity book by 10 per cent.

Challenger shares were up five cents at $3.24 at 1514 AEDT.

Shareholders overwhelmingly supported the company's executive remuneration policy.

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