Lendlease Group (LLC) H2 2024 earnings summary

Executive summary

• Refreshed strategy implemented, focusing on cost reduction, divestment of international construction, and capital release to strengthen the balance sheet and prioritize growth in Australia and international investments.

• Major organizational restructuring, including removal of regional management, establishment of a Capital Release Unit (CRU), and $95m restructuring costs recognized.

• Announced $1.9b of $2.8b FY25 asset sales, supporting debt reduction and balance sheet strengthening.

• Heads of Terms agreed for US Construction sale; UK Construction being prepared for sale.

• Achieved $60m in pre-tax cost savings in FY24, targeting $125m run-rate by end of FY25.

Financial highlights

• Core operating profit after tax for FY24 was $263m, up 2% year-over-year, supported by second-half development completions but impacted by transaction delays.

• Statutory loss after tax of $1.5b, including $1,384m in impairments and charges related to the refreshed strategy.

• Core operating earnings per security were 38.1c, with a return on equity of 4.4%.

• Distributions per security totaled 16.0c, unchanged from the prior year, with a payout ratio of 42%.

• Gearing at 21%, with $2.2b available liquidity and anticipated $2.4b in FY25 cash inflows to support deleveraging.

Outlook and guidance

• FY25 group earnings per security guidance is 54–62 cents, with 48 cents secured or highly probable.

• Targeting $2.8b of divestments in FY25 to reduce debt and strengthen the balance sheet.

• Gearing expected within 5–15% target range by end of FY26.

• Overhead cost savings of $125m targeted by end of FY25, with half expected to be realized in FY25.

• Up to $500m buy-back planned, subject to capital release and gearing targets.