Lendlease Corporation Limited (ASX:LLC) Reports 1H25 Results
Financial Performance
Lendlease Corporation reported an Operating Profit after Tax (OPAT) of $122 million, up by $133 million. The company achieved an Operating Earnings Per Security of 17.7 cents and declared an interim distribution of 6.0 cents per security, representing a 34% payout ratio. Statutory Profit after Tax stood at $48 million, including negative investment property revaluations of $74 million, a reduction of approximately 3%. The Investment, Development and Construction (IDC) Segment Operating EBITDA reached $341 million, a 171% increase. The company maintained a gearing ratio of 27%, with available liquidity of $2.6 billion and contracted cash inflows of $1.7 billion anticipated in the second half of 2025, including $1.3 billion already received post balance date.
Operational Highlights
Since the May 2024 strategy announcement, Lendlease completed or announced $2.2 billion in capital recycling initiatives and remains on track to achieve $2.8 billion in FY25. The sale of the UK Construction business was announced, marking Lendlease’s exit from international construction operations. The removal of the regional management structure is projected to achieve $125 million in pre-tax run-rate cost savings by the end of FY25. Additionally, the Australian Development pipeline has been restocked.
Outlook
Lendlease forecasts Group Earnings Per Security of 54 to 62 cents for FY25, with gearing expected to decrease towards the 5-15% target range by the end of FY26. The company plans to execute a $2.8 billion capital recycling initiative in FY25 and intends to announce a securities buyback in line with the May 2024 strategy guidelines. Risks to the guidance include transaction timing, interest rates, foreign exchange movements, and capital markets conditions.
Executive Comments
Group Chief Executive Officer Tony Lombardo stated, “Our results for 1H25 reflect significant progress in-line with our strategy announced last year, as well as a return to statutory profit. We continue to move at pace to simplify the Group and focus on improving our operational performance. Our priorities remain strengthening our balance sheet, returning capital to securityholders and redeploying capital to grow future earnings.”
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