Very few ASX 200 stocks promise growth while being among dividend paying stocks.
Wesfarmers Limited (ASX: WES)
Wesfarmers Limited (ASX: WES) has announced significant changes regarding its Catch business and digital transformation. Catch will cease to operate as a standalone business by the fourth quarter of the 2025 financial year, with its e-commerce fulfilment centres moving to Kmart Group. This shift aims to enhance efficiency, improve customer experience, and eliminate the financial losses Catch has been facing. Key digital assets and capabilities from Catch, such as supplier relationships and specialist personnel, will be transferred to other Wesfarmers retail divisions, strengthening the Group's omnichannel offerings.
Additionally, Wesfarmers has reported that the OneDigital program, which is focused on enhancing digital capabilities across its retail and health divisions, continues to progress well. OneDigital’s membership program, OnePass, is driving increased customer engagement and sales. Furthermore, the Group is investing in building a retail media network to further utilise data and analytics, though the program is expected to incur an operating loss of around $70 million for the 2025 financial year. Despite the loss, the digital transformation is helping improve customer understanding and personalisation across the Group’s offerings.
Wesfarmers has also entered into an agreement to sell its Coregas business to Nippon Sanso Holdings Corporation for $770 million. The sale, expected to complete by mid-2025, will result in a pre-tax profit of approximately $230 million to $260 million. This divestment is aligned with Wesfarmers' strategic focus on portfolio management and will allow Coregas to benefit from being part of a global industrial gas company. Despite the sale, the other businesses within the Industrial and Safety division, such as Blackwoods and Workwear Group, continue to pursue long-term growth opportunities.
Challenger Limited (ASX: CGF)
Challenger Limited (ASX: CGF) reported strong first-quarter results for FY25, with a 1% increase in Group assets under management (AUM), reaching $128 billion. Total Life sales for the quarter were $2.4 billion, driven by significant growth in retail lifetime annuities, Japanese annuities, and Challenger Index Plus. Retail lifetime annuity sales rose 26% to $275 million, while Japanese annuity sales saw a notable 74% increase to $244 million. Fixed term annuity sales were down 28% to $839 million, mainly due to competitive pricing and an inverted yield curve. Overall, AUM grew 1% due to positive investment market movements within Funds Management, with FUM totaling $119 billion.
Challenger, is among top growth stocks as it witnessed strong demand for its retirement income products. Retail lifetime annuities, particularly Liquid Lifetime and Care Plus, performed well, with Liquid Lifetime sales increasing 19% to $117 million and Care Plus sales up 32% to $158 million. However, fixed-term annuities were more affected by the competitive market, resulting in a 22% decrease in sales. Institutional sales saw growth, particularly Challenger Index Plus, which increased 55% to $1.1 billion, while shorter-duration term annuities saw a 38% decline. The average tenor of new business annuity sales remained at 5.9 years, positively influencing the company’s overall portfolio.
Challenger has also made progress in its strategic initiatives, including the launch of a customer registry and technology platform for its annuity business, which is expected to enhance growth. Additionally, the company has expanded its credit origination platform, offering new opportunities in whole loan servicing. Challenger has partnered with State Street for investment administration and custody services, further supporting its growth strategy. The company has reaffirmed its FY25 net profit guidance of $440 million to $480 million.
Source: Company’s Report
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.
