Developer and constructor, Lend Lease (LLC) boosted earnings 50%, for the year to June, thanks to the sale of most of its remaining stake in the Bluewater shopping mall in southern England, and solid increases in apartment pre-sales.
As a result the company is returning much of the Bluewater profit to shareholders by way of a sharply increased final dividend of 49c a share.
That’s more than the 42c a share full year dividend for 2012-13 and takes the full year payment for 2013-14 to 71c a share
The company said net profit after tax for the year was $822.9 million, in line with its recent guidance following the Bluewater sales.
In June, Lend Lease said it expected annual net profit between $810 million and $830 million after selling its interest in Bluewater Shopping Centre to Britain’s Land Securities Group for 696 million pounds.
Revenue rose 6% to $13.94 billion in the year, from $13.16 billion in 2012-13.
Lend Lease, which is developing Sydney’s $6 billion Barangaroo South and $2.5 billion Darling Harbour International Convention Centre, said earnings from its Australian business fell to $590.4 million from $614.7 million.
The company said there was continuing strong development growth in residential activity in Australia.
LLC 1Y – Lend Lease hands back Bluewater profit to shareholders
But it said construction was still weak overall, reflecting lower revenue, the impact of $27 million after tax cost associated with the restructure of the Australian division and bid costs incurred pursuing major projects.
Lend lease said that despite the challenging market, it has pipeline opportunities that offer earnings visibility in the coming three years.
The development arm has an estimated pipeline end value of $37.7 billion, while the construction business has backlog revenue of $16.2 billion.
But it warned that the challenging macro-economic conditions made future results subject to the risks of a weakening construction market and to property market risks.
Looking to the rest of the 2015 financial year, CEO Steve Mccann said, “The outlook for Lend Lease remains positive. Our strategy is on track and is delivering significant growth for securityholders.
“Forward pre sales in our residential development business and embedded returns in our existing pipeline clearly underpin our earnings visibility over the next three years.
“We remain comfortable with consensus net profit after tax expectation of $604 million to $622 million for FY15,” said Mr McCann.
Lend Lease shares rose 1.4% to $13.95.
