The Lendlease Group (ASX: LLC) is up by a huge 8.09% today on the back of a very positive market reaction to its half year earnings for the period ended 31 December 2019
What did Lendlease announce?
Lendlease reported operating earnings before interest, tax, depreciation and amortisation (EBITDA) of $628 million, a decline of 3% on the prior corresponding period (pcp), and EBIT of $479 million, a decline of 6% on pcp. However, judging by the sharp rise in the Lendlease share price today, this drop didn't seem to disappoint investors, with the market appearing to have been preparing for an even steeper decline.
Lendlease recorded group profit after tax recorded of $313 million, with earnings per stapled security coming in 55.5 cents. Core profit after tax came in at $308 million and earnings per stapled security of 54.6 cents, while non-core profit after tax came in at $5 million. Return on Equity for the period for Lendlease came in at 9.8%.
The group's funds under management (FUM) was $37 billion, which is 8% up on pcp. This half-year FUM included the $1.5 billion listing of the Lendlease Global Commercial Real Estate Investment Trust (REIT) in Singapore.
The company's construction segment delivered a solid performance in line with its target returns, completing $4.3 billion of construction work during the period. Lendlease noted this activity was diversified by sector, client and geography. Completed projects within Australia included the Gosford Hospital Redevelopment and the redevelopment of Rod Laver Arena.
An interim distribution of 30 cents per stapled security was declared by the company.
Key highlights
Key highlights during the period included the group securing 2 major urbanisation projects, located in London and the San Francisco Bay Area in North America.
Lendlease also launched Lakeshore East in Chicago, with a combination of apartments for sale and rent. This brings the group's total number of apartments for rent globally to more than 1,700.
Lendlease currently has an urbanisation pipeline of $98 billion, which includes 21 major projects in 9 gateway cities throughout the world.
The group pointed to the launching of One Sydney Harbour at Barangaroo as a milestone achievement, with $1.4 billion of apartment presales already on Lendlease's books.
Another highlight achieved during the period was the sale of Lendlease's engineering business to Acciona at an agreed price of $180 million.
Singapore project completed
During the period, Lendlease also completed the retail and residential components of a lifestyle precinct in Singapore, the Paya Lebar Quarter. This project spanned 4 years and resulted in approximately $4 billion of products to add to Lendlease's portfolio, including 3 office towers, a retail mall and more than 400 apartments.
The Lendlease Global Commercial REIT is now listed on the Singapore market, which gives Lendlease significantly more global market exposure.
Strong pipeline for future growth
Lendlease currently has a development pipeline of $112 billion, which is up 51% on pcp – a substantial increase that could be a contributing factor to Lendlease's strong share price rise today.
