In this daily reporting season update, we provide first impressions on key takeouts from companies reporting today, including Challenger (CGF), GPT Group (GPT), Domino’s Pizza Enterprises (DMP) and FlexiGroup (FXL) with links through to more detailed reports.

Challenger (CGF)

CGF has delivered a solid FY17 result largely in line with our estimate but has also confirmed MS Primary’s parent company MS&AD will take a strategic stake in CGF, via a share placement. Pre-tax profit of $505m, -1% below our $510m estimate; Reported post-tax profit (which includes investment experience) $398m, 2% ahead of our $390m estimate. Capital Raising: CGF has announced a $500m equity placement to Japan’s MS&AD at $13.06 per share (vs $12.85 last close share price), which represents 6.3% of CGF’s share base; MS&AD has committed to increasing its 6.3% stake to 10% over the year ahead, and will purchase the shares on market (~$300m).

Outlook: The company has changed guidance to rather than on a Life COE basis, to move to a Group Underlying Profit before tax basis. The guidance for FY18 is for net profit before tax between $545 - $565m, 8-12% growth on FY17. We are currently forecasting 15% growth, but believe there is a strong possibility that guidance will be upgraded during the year given AMP and BT platform launches have yet to occur.

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GPT Group (GPT)

Retail like-for-like income growth 3.8%, with specialty sales at $11,100 per square metre, up 3.1 per cent on pcp. Office like-for-like income growth 5.8%, occupancy 97.4%. Logistics like-for-like income growth 3.8%, occupancy 92.7%. Total return of 16.9% rolling 12 month basis. NTA $4.88, up 6.3% (current price $4.78).

Outlook: 2017 GPT expects to deliver approximately 3% growth in FFO per ordinary security (up from previously 2%) and approximately 5% growth in distribution per ordinary security.

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Domino’s Pizza Enterprise (DMP)

Regional SSS growth: ANZ 13.6% (cycling 14.8%); Europe at 2.8% (cycling 8.2%); and Japan at -0.6% (cycling -2.1%). SSS growth rates for all regions came in below guidance range. 178 net store openings in FY17, 66 in ANZ, 72 in Europe and 40 in Japan. FY18 store opening target of 180 - 200 across the group. SSS update for 3 July to 6 Aug 2017: ANZ +7.2% (cycling +14.5%); Europe +8.8% (cycling +5.8%); and Japan -1.2% (cycling -3.4%). DMP announced a share buyback of up to $300m.

Outlook: FY18 growth guidance; NPAT growth in the region of 20%, Regional SSS growth guidance: ANZ of 7 - 9%, Europe of 5 - 7%, and Japan of 0 - 2%.

Comments: Online platform issues in France and weaker than expected initial uptake of value range offering weighed on SSS in Europe. Note that these issues have since been rectified with 1H18 Europe trading update SSS at +8.8%. Slowing sales in ANZ with 2H17 at 10% vs 1H17 at 17.4%. This can be partly explained by the cycling of strong comps. However, also by lower offline sales where a “focus on online has sometimes come at the expense of offline sales”. Japan SSS did improve in 2H17 to +3.6% vs -4.7%, although continues to be volatile.

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FlexiGroup (FXL)

Group volume from continuing operations for FY17 grew 54% to $1,949 million (FY16: $1,268 million) while closing receivables were up 9% to $2,047 million (FY16: $1,874 million). Division Highlights: No Interest Ever Cash NPAT down 1%, volumes down 2%, and 1% decline in receivables. NPAT growth expected to return in FY19. VIP Non-Solar volumes improved (+5%) while intensifying competition impacted solar and merchant volumes. Australia cards NPAT decline 31%, 61% volumes growth 61% and 55% receivables growth. Australia Leasing cash NPAT decline 24% with volumes up 25%, receivables up 10%: profitability was impacted due to focus on credit quality and investments (~$6m) in Ireland and Oxipay. NZ Leasing cash NPAT down 2%, volume down 9%, receivables steady, Net operating cash flow up 9% to $161m.

Outlook: FlexiGroup today provided guidance of FY18 Cash NPAT of $85‐90 million including $4m of ongoing investment in Ireland and Oxipay. “The Group has a strong investment plan in FY18 with a small increase in capex to $28‐31 million to deliver regulatory, strategic and growth initiatives.” FlexiGroup launched its new digital finance offering, Flexi-Fi, in Ireland, with 60 stores currently signed and a further 600 stores in a trial – all in its first 8 weeks.

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