Lendlease has reported a sharp increase in operating profits and has outlined future capital management plans.
The group has released its financial outcomes for the half-year ending December 31, revealing substantial growth and strategic advancements.
Its operating profit after tax (OPAT) soared to $122 million, a $133 million increase from the previous period.
The latest financial data indicated a robust period for Lendlease, with operating earnings per security reaching 17.7 cents and an interim distribution set at 6.0 cents per security, reflecting a 34% payout ratio. It had a statutory profit of $48 million impacted by negative revaluations of investment properties.
Lendlease’s investment, development, and construction (IDC) segments witnessed an operating EBITDA of $341 million, marking a 171% increase.
The financial success was attributed to the company’s May strategy, focusing on capital recycling and operational simplification, which remains on track to achieve a $2.8 billion target by the end of FY25.
Significant developments included the sale of the UK construction business, marking Lendlease’s exit from international construction operations, and the elimination of regional management structures aiming to save $125 million in pre-tax costs annually by FY25.
Looking forward, Lendlease is optimistic about its financial trajectory and strategic initiatives.
The group plans further capital recycling with anticipated cash inflows from projects like One Sydney Harbour, which is expected to bolster the balance sheet substantially.
“Our priorities remain strengthening our balance sheet, returning capital to securityholders and redeploying capital to grow future earnings,” said Tony Lombardo (pictured above), group CEO.
Lendlease is also preparing for a significant reduction in gearing, projected to align within the target range by the end of FY26, thanks to ongoing capital management strategies and the potential initiation of a securities buyback program as per the May strategy guidelines.
