Lendlease Group (LLC) H1 2025 earnings summary

Executive summary

• Operating profit after tax for HY/1H25 was AUD 122 million, up AUD 133 million year-over-year, driven by strong Investments and Development segments, offset by Construction and Capital Release Unit (CRU) losses.

• Statutory profit after tax was AUD 48 million, reversing a prior loss, despite AUD 74 million in negative investment property revaluations.

• Strategic simplification advanced through cost reductions, divestment of international construction, and capital recycling initiatives totaling AUD 2.2 billion completed or announced since May 2024.

• Focus remains on strengthening the balance sheet, returning capital to securityholders, and redeploying capital for future growth.

• Stable financial position with 27% gearing and AUD 2.6 billion available liquidity; pro-forma gearing expected to benefit from AUD 1.7 billion contracted cash inflows in H2 2025.

Financial highlights

• Segment operating EBITDA rose 39% to AUD 375 million, led by Investments and Development, offset by Construction and CRU declines.

• Operating earnings per security were 17.7 cents; group operating ROE was 5%.

• Distributions per security of 6.0 cents, payout ratio 34%.

• Net finance costs increased 77% to AUD 136 million due to higher debt and rates.

• Gearing at 27% as of 31 December/1H25, with AUD 2.6 billion in available liquidity.

Outlook and guidance

• FY25 EPS guidance unchanged at 54–62 cents per security, with higher IDC contribution and lower CRU.

• Construction profitability expected to return in H2 2025 as loss-making projects complete, with margins trending toward historical 3%.

• Gearing expected to decrease toward 5–15% target range by FY26, supported by capital recycling and contracted inflows.

• Targeting AUD 2.8 billion in capital recycling for FY25, with at least AUD 600 million more in H2.

• Securities buyback planned as deleveraging progresses.