Lendlease share price crashes on $136m half-year loss

Investors have been left bitterly disappointed with this update.

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The Lendlease Group (ASX: LLC) share price is having a tough time on Monday.

In morning trade, the international property and infrastructure company's shares are down 15% to $6.35.

This follows the release of the company's half-year results.

Lendlease share price crashes on half-year results

  • Revenue down 3.8% to $4,733 million
  • Segment earnings before interest, tax, depreciation, and amortisation (EBITDA) down 20% to $283 million
  • Operating profit after tax down 42% to $61 million
  • Statutory loss after tax of $136 million
  • Interim dividend of 6.5 cents per share

What happened during the half?

For the six months ended 31 December, Lendlease recorded a statutory loss after tax of $136 million.

Management notes that its statutory earnings were impacted by a reduction in investment property valuations, redundancy costs, and an additional provision in relation to UK building remediation regulations.

Funds under management (FUM) were down slightly during the half due to challenging markets. They reduced 1% to $47.8 billion.

There was $0.9 billion of new FUM deployed, down from $2.9 billion in the prior corresponding period. This was due to slower market conditions.

Positively, there is $6 billion of future secured FUM in delivery from Development projects that are planned to move into funds or mandates and $4 billion of third party capital mandates to be deployed.

Management commentary

Commenting on the half, Global CEO and managing director, Tony Lombardo, said:

Despite challenging capital markets, we've continued to execute on our stated strategic initiatives, simplifying the business and further streamlining our operations. We reached a major development milestone with completion of the $1.5b retail development, The Exchange TRX, and are nearing completion on $2b of luxury apartments at One Sydney Harbour, Barangaroo.

Outlook

Also potentially weighing on the Lendlease share price today was its outlook statement.

The company has revised its expected FY 2024 return on equity guidance to 7%, reflecting lower certainty of transaction timing and higher execution risks.

The Lendlease share price is down around 20% over the last 12 months.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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