- The company simplified its operating model, among other things
- Core operating profit after tax was $276 million.
- Has "solid momentum going into FY23"
Lendlease (ASX: LLC) has announced its full year results, with the company delivering a statutory loss and modest core profit.
In the company’s ASX announcement, Lendlease said, “Resetting the organisation, including simplifying the Group’s operating model and addressing legacy issues while managing the ongoing impacts of Covid, affected our financial performance.
Lendlease said its performance improved in the second half of the financial year and “there is solid momentum going into FY23.”
| Statutory loss after tax | $99 million |
| Core operating profit after tax | $276 million |
| Full year distributions | 16 cps |
| Payout ratio | 40% |
| Final distribution | 11 cps |
| Earnings per security | 40.1 cents |
| Statutory result H2 | $165 million profit |
| Statutory result H1 | $264 million loss |
| Core profit H2 | $248 million |
| Core profit H1 | $28 million |
Source: Lendlease.
Global Chief Executive Officer and Managing Director, Tony Lombardo said, “We made significant progress in resetting our company for future growth. We are now a leaner organisation and more agile in responding to our customers.
“This year, we formed approximately $11b of investment partnerships that will underpin strong growth in funds under management while work in progress is at a record $18.4b”.
The company has advanced several strategic initiatives, including a refreshed leadership and structure or organisation, simplifying the group by exiting non-core businesses with the divestment of Services, reducing cost structure, and more.
4% return on equity
Lendlease had a core operating profit after tax of $276 million for FY22. The core operating EPS was 40.1 cents which represents a return on equity of 4 per cent.
Group Chief Financial Officer, Simon Dixon, said “Maintaining financial strength, reflected in gearing of less than 10 per cent, was a priority for the Group as we transitioned through a reset year. This was achieved while deploying an additional $1b of development capital during the year.”
Gearing of 7.3 per cent is below the target range of 10-20 per cent, placing the Group in a strong liquidity position with total available liquidity of $3.9 billion.
Across the company’s operating segments, investments was a standout, delivering a return on invested capital of 9.7 per cent, in excess of the target range of six to nine per cent.
The outcome was boosted by a financial partner acquiring part of the asset management income stream of the US Military Housing portfolio, as well as a recovery in portfolio income and higher management fees. Investments EBITDA rose from $141m in the first half to $356m in the second half.
Lendlease said fewer completions and the impact of the change in approach to joint venture projects were reasons behind a subdued contribution from the development segment.
In construction, the company’s backlog revenue remains solid at $10.5 billion and is diversified by client type and sector, although dominated by Australia with $7 billion of backlog revenue.
In Lendlease’s outlook, the company said return on invested capital for the investments segment is expected to be in the range of six to 7.5 per cent for FY23, four to six per cent for the development segment, and the EBITDA margin for the construction segment is expected to be in the range of 1.5 to 2.5 per cent.
~~
For full details, please see the company’s original ASX announcements and related documents.
