Lendlease Corporation Limited (ASX:LLC) Sells UK Construction Business
Sale of UK Construction Business
Lendlease Corporation Limited has entered a binding agreement to sell its UK Construction business to Atlas Holdings for £35 million (approximately $70 million). The transaction is effective from 31 December 2024 and marks Lendlease’s exit from all international construction operations, ahead of the initially targeted eighteen-month timeline. This follows the recent divestiture of its US East Coast construction operations.
The transaction will simplify Lendlease’s corporate structure, allowing it to concentrate on its Australian operations and international investments. The deal includes £10 million deferred until June 2026, with the overall financial impact expected to be broadly neutral after accounting for retained project risks. It is projected that the net cash outflow will be around $100 million.
Future Earnings Outlook
Lendlease has maintained its earnings guidance for FY25, projecting Group Earnings Per Security between 54 and 62 cents, weighted towards the second half of the fiscal year. The delay in the Military Housing sale is expected to contribute $145-160 million of Operating Profit After Tax. The company anticipates gearing to reach 26-28% by the first half of FY25, with a significant decrease expected in the latter half due to approximately $1.5 billion in contracted cash inflows expected in the third quarter.
Lendlease Group CEO Tony Lombardo stated, “This transaction builds on our progress to simplify Lendlease as we look to lower our risk profile and increase securityholder returns. It also represents a positive outcome for both our people and our valued customers.”
Motley Fool contributor Aaron Shaw has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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