Lend Lease rises on Barangaroo sales
Developer and contractor Lend Lease has benefited from residential sales at Barangaroo South and its $17.2 billion construction backlog to report a 10 per cent rise in profit.
While the construction division's results were impacted by weakening market conditions and costs associated with restructuring, the group posted a $551.6 million net profit for the year to June 30, up from $501.4 million in the previous year.
Lend Lease did not issue earnings guidance but said the market consensus for next year was about $544 million.
The group warned in June that this year's earnings would be hit by lower construction earnings.
The final distribution was 20¢ a share, taking the full year pay out to 42¢, up 11 per cent.
On August 1, the group finalised the integration of the construction operations around its three core areas of building, engineering and services. That is likely to result in redundancies of between 250 and 300 people in coming months.
It said it would work with staff to explore every opportunity for redeployment as it consolidated its Abigroup and Baulderstone businesses.
Lend Lease chief executive Steve McCann, who renewed his managing directorship this week, said the engines for growth would be the residential communities and infrastructure development business.
He said the investment funds under management rose 17 per cent to $10.3 billion, helped by the Asian retail malls projects.
But Mr McCann said, while all assets on the balance sheet were for sale at the right price, the stake in Bluewater shopping centre in Britain was not close to being sold.
"There's still a number of projects that we've got our eye on in Australia and offshore. But the amount of embedded earnings in our pipeline means we don't need to pursue projects aggressively from here."
Lend Lease's planned developments globally have an end value of $37 billion, the largest in its history.
It has $17.2 billion in expected construction revenue and will boost that with the staged developments at Barangaroo, Darling Harbour and at the site of the 2012 London Olympics athletes' village.
In Australia, Mr McCann said the group was in discussions with a number of possible tenants to anchor the planned third office tower at Barangaroo.
InvestSMART FORUM: Come and meet the team
We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free