Business Description:
Leighton Holdings (LEI) provide development, construction, contract mining, and operation and maintenance services to the infrastructure, resources and property markets in 27 countries from headquarters in Australia, Hong Kong and the United Arab Emirates. LEI operate through a number of diverse and independent operating entities: Thiess, Leighton Contractors, John Holland, Leighton Properties, Leighton Asia, Leighton Welspun, Leighton Offshore, the Habtoor Leighton Group, Leighton Africa and Devine.

Strategy Analysis:
LEI´s well-considered business model focuses on diversification, with the company undertaking construction, contract mining and management services in the infrastructure, resources and property markets in Australia, Asia and the Middle East. Risk assessment and project delivery have become significant problems for senior management, particularly on large scale infrastructure construction projects. In response to the significant problems and losses on the two infrastructure projects LEI announced a change in the company´s strategic approach to major tenders and contracts. LEI´s new approach is to focus on risk management including tender accuracy, risk identification, satisfactory time allowance, adequate pricing risk and exact project delivery. Investor confidence will only be restored in next twelve months if there is evidence the new strategic focus is having an impact on lowering the company´s risk profile. Leighton Holdings reported a net loss of $408.8m for the year ended 30 June 2011, down from a profit of $612.0m in 2010. The loss was primarily due to losses and reversals on the Airport Link project in Queensland of $690m (loss at completion $520m) and the Victorian Desalination project of $355m (loss at completion $278m), and operating losses and impairment of the Group's investment in the Habtoor Leighton Group. Revenues from ordinary activities were $19.38bn, up 4% from last year. Diluted EPS was (133.1) cents compared to 201.9 cents last year. Net operating cash flow was $1.32bn compared to $1.74bn last year. The final dividend declared was nil, taking the full year dividend to 60 cents compared with 150 cents last year. The Group's long-term outlook remains positive based on a record level of work in hand, a strong competitive position, and strong economic activity in its major markets.