Lend Lease restores balance

In the past year the group won up to $15 billion in new developments, including the $6 billion Barangaroo site in Sydney, the RNA Showgrounds in Brisbane and the Jurong Gateway in Singapore.

In the year to June 30, Lend Lease restored its balance sheet through cost-cutting and a $806 million capital-raising. It reported a net profit of $345.6 million, a turnaround from a loss of $653.3 million for 2008-09.

Due to the share issue in February the full-year dividend and earnings per share were down on the previous year, but the full dividend payment of 32.1? will be paid on September 24.

Macquarie Equities analysts have forecast the 2010-11 operating profit after tax to grow by about 8 per cent, from $323.6 million to $351.1 million, but earnings per share will fall about 6 per cent as the full impact of the raising is felt.

Lend Lease chief executive Steve McCann said there were costs incurred in the Bovis Lend Lease business in the US relating to a slowdown in construction, costs in relation to the New York investigations and a provision against debtor exposures in the Middle East.

These reductions have been partially offset by a strong performance in the Australian business.

"We think we've had a good year in 2009-10 and we look forward to delivering on the projects that we have secured. Barangaroo, at Sydney's Darling Harbour, is one of the biggest in the world right now and is generating significant tenancy interest," Mr McCann said.

According to Macquarie Equities, the earnings contribution has shifted away from the Americas over the past 12 months, with only 7 per cent of operating profit after tax originating from the region in the past year, down from 30 per cent in 2008-09.

The Asia-Pacific region contributed 65 per cent of earnings in the year, up from 55 per cent the previous year, while Europe provided 28 per cent, from 15 per cent in 2008-09.

Mr McCann said he would not comment on acquisitions, such as making a bid for Aevum to boost his PrimeLife retirement asset, but Lend Lease had a strong liquidity position for future growth, with cash and cash equivalents of $1.65 billion at June 30, 2010.

In addition, the group had undrawn committed bank facilities of $688.6 million.

He said the Delfin retail communities business was strong in Victoria and New South Wales in the apartment sector, as was the Actus defence buildings business in the US, but Europe remained weak.

The retail operating profit after tax grew 10 per cent, boosted by Asia-Pacific and Europe profits, while the Americas profits fell 36 per cent due to negative currency movements and higher taxes.

The company does not issue earnings guidance.