Challenger Financial Services Group Ltd, the Australian fund manager backed by billionaire James Packer, replaced its chief executive officer after posting the first loss in five years as the value of investments declined.
Chief executive officer Mike Tilley, who joined Sydney-based Challenger in 2004, will be replaced by deputy Dominic Stevens, the company said in a statement.
Tilley’s departure follows those of Babcock & Brown Ltd CEO Phil Green and National Australia Bank Ltd’s John Stewart as the global credit crisis hurt their businesses.
Challenger, among the worst performing Australian financial stocks this year, joins fund managers Perpetual Ltd and Platinum Asset Management Ltd in reporting declining earnings.
“The number of departures suggests that it’s gone beyond a company specific issue and is now a symptom of the broader global crisis that’s impacting companies’ bottom lines across the board,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, which manages about US$108 billion.
“The last time we had so many departures was around 2001 following the technology boom,” Oliver said.
Profit excluding investment writedowns rose 20 percent to A$218 million (US$188 million) in the 12 months ended June 30, Challenger said in a statement yesterday. That beat the A$212 million median estimate of 11 analysts surveyed by Bloomberg.
Challenger shares rose 7.6 percent to A$2.43 as of 11:17am in Sydney yesterday, paring their loss this year to 52 percent.
The company’s net loss of A$44.2 million for the year compared with net income of A$255 million a year earlier as declining financial markets cut investments.
The Australian benchmark S&P/ASX 200 Index is down 21 percent this year, heading for an annual slide following a five-year rally.
Challenger’s earnings from managed funds dropped 23 percent in the period, while funds under management slid 19 percent to A$14.9 billion.
“We believe that the current difficult market conditions will continue to affect the sector for some time to come,” Stevens, who joined the company in 2003, said in a statement.
“We remain confident in our pursuit of generating double-digit earnings-per-share growth in the long term,” he said.
Outgoing chief executive Tilley said a year ago he expected the company to continue to deliver earnings growth of more than 10 percent “in the long term.”
Challenger, 20 percent-owned by Packer’s Consolidated Press Holdings, sold its financial planning business in June to AXA Asia Pacific Holdings Ltd for A$150 million in cash. AXA is a unit of Europe’s second-biggest insurer.
“It’s clearly been difficult for people in the funds management space because the markets have been so tough,” said Rob Patterson, managing director of Adelaide-based Argo Investments Ltd, which looks after approximately US$3.8 billion in assets. “There may be some sort of generational change happening here.”
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
SECURITY: The New Zealand and Australian navies also sailed military vessels through the Strait yesterday to assert the right of freedom of navigation The Japan Maritime Self-Defense Force on Wednesday made its first-ever transit through the Taiwan Strait in response to the intrusion by a Chinese reconnaissance aircraft into Japan’s sovereign airspace last month, Yomiuri Shimbun reported yesterday. The Japanese news platform reported that the destroyer JS Sazanamisailed down through the Taiwan Strait on Wednesday, citing sources in the Japanese government with knowledge of the matter. Japanese Chief Cabinet Secretary Yoshimasa Hayashi declined to comment on the reports at a regular briefing because they concern military operations. Military vessels from New Zealand and Australia also sailed through the Strait on the same day, Wellington’s defense ministry
RSS