Half Year 2025 LendLease Group Earnings Call Transcript
Key Points
- Lendlease Group (LLESY) has made significant progress in simplifying its operations, reducing its risk profile, and recycling capital, with $2.2 billion of transactions already announced or completed.
- The company is on track to deliver $125 million in cost savings by the end of FY25, with a new management structure and cost-saving initiatives already in place.
- Lendlease Group (LLESY) has secured $1.5 billion in new mandate wins across Australia and Asia, indicating strong growth potential in its investment management segment.
- The company has a strong backlog of construction work, with $6.2 billion in backlog revenue, and anticipates a return to profitability in the construction segment in the second half of FY25.
- Lendlease Group (LLESY) has successfully exited from international construction in the US and UK, ahead of expected timelines, which is expected to reduce risk and improve focus on core operations.
- Lendlease Group (LLESY) experienced construction losses predominantly on two projects due to difficult operating conditions, including material cost inflation and supply chain issues.
- The company's gearing remains elevated at 27%, although it is expected to decrease with ongoing capital recycling initiatives.
- Operating earnings per security were relatively low at $0.07, with a group operating return on equity of only 5%.
- The company recorded a statutory profit of only $48 million after allowing for $74 million of negative investment property revaluation.
- There is a level of tail risk retained from the sale of international construction businesses, which could impact future financial performance.
Ladies and gentlemen, thank you for standing by and welcome to Lendlease's HY25 results briefing. At this time, all participants are in listen-only mode. There will be a presentation followed by a question and answer session with management and Lendleasees covering research analysts, at which time, if you wish to ask a question, you will need to press the star key, followed by the number one on your telephone keypad. I must advise you that this call is being recorded today, Monday, 17th of February 2025. I would now like to hand the conference over to Mr. Tony Lombardo, Group Chief Executive Officer.
Thank you, Tony. Please go ahead.
Good morning and thank you for joining the Lendlease 2025 half year results presentation.
I'm Tony Lombardo, Chief Executive Officer and managing director of Longlea.
With me is Simon Dixon, Chief Financial Officer.
Sitting here at Barangaroo in Sydney, we're on the land of the Gadigal people,
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