Another company to follow previous downgraded guidance for the year to June (like BlueScope) was Lendlease which on Monday reported a $310 million full-year loss for the year to June.
That was down sharply from the $467 million profit a year earlier and was triggered by the coronavirus and the cost of exiting its troubled engineering business exit.
But like BlueScope, a final dividend will still be paid – small at 3.3 cents a security, but it will still be paid.
Group CEO and managing director Steve McCann described result as “disappointing” result but it has been known for months that the cost of getting rid of the engineering operations (in the end some parts had to be held back) was going to plunge the group into a loss for the year.
The sale of the Engineering business is anticipated to complete shortly, subject to the satisfaction of the final conditions.
The sale price is $160 million, payable in instalments in the 2021 financial year including completion adjustments.
In fact the full year cost was $368 million which when added to the $212 million second half loss for the result of the company’s operations, left a big blob of red ink on the balance sheet.
Thanks to the impact of the lockdowns triggered by COVID-19 globally, Lendlease saw delays in converting development opportunities across the company’s urbanisation pipeline into actual projects while the communities business experienced weak trading conditions.
“In construction, the impact was greater in our international regions, particularly in cities where mandated shutdowns were implemented. This included lower productivity, projects being put on hold and delays in the commencement or securing of new projects,” the company told investors.
The Group’s investment portfolio was impacted by declining real estate values as a result of deteriorating market conditions which were again triggered by COVID-19 and the lockdowns.
Mr McCann said the profit plunge was mitigated by cost reductions and a review of project expenditure as well as a $1.15 billion capital raising.
Revenue fell 19.8% to $1.27 billion in the 12 months to June 30.
Total payout for the year was cut to 33.3 cents a security (and share). That is down from 42 cents the year before.
After an interim payout of 30 cents a security, the final was set at just 3.3 cents a security after the weak second half and the write down of the value of the engineering business.
The securities edged up 1.3% after being down nearly 4% in early dealings. They finished the session at $11.68.
