Shareholders in global property and infrastructure company Lendlease Group (ASX: LLC) should be in good spirits after the release of a strong set of full year results on Friday morning. In early trade the share price has climbed around 2%, meanwhile the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) is up just 0.1%.
Today's ASX announcement reveals that Lendlease achieved a 13% rise in profit after tax to $698 million and a corresponding 12% rise in earnings per share to 120 cents per share (cps). With the stock trading on $14.32, this implies a price-to-earnings ratio of just under 12 times which hardly seems demanding for this market leader.
Other key positive takeaways from the results include a strong operating cash flow of $853 million, which equated to 122% of profit and a rise in return on equity to 13%.
The strength of the balance sheet is also noteworthy with gearing of just 6.5% and available liquidity of $3.2 billion.
Although the dividends are unfranked, the full year pay-out increased to 60 cps from 54 cps in the prior year. This equates to a yield of 4.2%.
Turning to the underlying drivers of Lendlease's growth and the Development division was a standout with earnings before interest, tax, depreciation and amortisation (EBITDA) surging from $386 million to $500 million. Completion proceeds were received on both Tower Two and Three at Barangaroo South, residential settlements increased 7% to 4,790 units and record presold residential revenue stands at $5.9 billion.
Results from the Construction division were mixed with a significant improvement in the Australian operations largely offsetting a difficult operating environment in Asia, Europe and the Americas. EBITDA expanded from $279 million to $288 million.
Finally, the Investments division continued to perform solidly with funds under management growing by 11% to $23.6 billion. However, EBITDA did slip from $478 million to $458 million.
Outlook
Like Amcor Limited (ASX: AMC) and Brambles Limited (ASX: BXB), Lendlease is one of a handful of large ASX-listed businesses which provide investors with global economic exposure.
While no specific guidance was provided for the current financial year, management did state that the group was well placed heading into financial year 2017. With significant earnings visibility thanks to its large order books and pipelines of work, the current positive momentum at Lendlease looks set to continue.
