June 12, 2019 / 11:31 PM / 3 months ago

Australian fund manager Challenger sees annual profit at low end of range

(Reuters) - Australian fund manager Challenger Ltd said on Thursday it expected annual profit before tax at the lower end of its guidance range, sending its shares to more than three-year lows.

The company said it now expected to achieve the bottom end of the full-year 2019 normalized net profit before tax guidance range of A$545 million to A$565 million, matching market expectations of A$544 million ($376.9 million).

Challenger further signaled little growth in fiscal 2020 due to a “low interest rate environment”, forecasting profit before tax in the range of A$500 million to A$550 million.

The company’s shares plunged 12% to A$6.72 after the announcement, hitting more than three-year lows. The broader market was flat.

Annuities, one of Challenger’s main products, have become less attractive after a recent cut in the benchmark rate, and the company is finding it harder to provide previously committed fixed returns to customers.

Reporting by Shanima A in Bengaluru; Editing by Stephen Coates

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