The Lendlease Group (ASX: LLC) share price is in focus after the company posted a return to statutory profit with net profit after tax of $225 million for FY25, a turnaround from a significant loss last year. Distribution rose by 44% and operating profit after tax reached $386 million, both reflecting strong progress on the company's turnaround strategy.
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What did Lendlease Group report?
- Statutory profit after tax: $225 million (versus a $1,502 million loss in FY24)
- Operating profit after tax (OPAT): $386 million, up $1,628 million year-on-year
- Operating earnings per security: 55.9 cents
- Full-year distribution: 23.0 cents per security, up 44% (fully franked dividend component)
- Group gearing: 26.6%; net debt reduced by $0.4 billion to $3.4 billion
- Segment Operating EBITDA: $1,041 million (up from a loss of $328 million in FY24)
What else happened in FY25?
Lendlease completed its exit from international construction operations, simplifying its business and improving its risk profile. Over $2.5 billion in capital recycling initiatives were announced or completed, with an additional $2.0 billion targeted for FY26—$1.0 billion of which is at an advanced stage.
The Group achieved $141 million in annualised run-rate cost savings, exceeding its $125 million target, and management has earmarked a further $50 million in savings for FY26. New investment mandates of $1.5 billion and a development pipeline of $3.0 billion were secured in Australia, with $5.0 billion in new construction work also locked in for the year.
What did Lendlease Group management say?
Commenting on the result, Group Chief Executive Officer Tony Lombardo said:
Our FY25 result reflects significant progress in simplifying the Group and refocusing on our core capabilities across Investments, Development and Construction, to drive long-term value for securityholders. As we move into FY26, we will continue to prioritise capital recycling to strengthen our balance sheet, return capital to securityholders and fund disciplined growth in accordance with our capital allocation framework.
What's next for Lendlease Group?
The company expects FY26 to be a transition year as it continues to simplify the business. It anticipates a lower earnings contribution from major project completions but plans for a sharp earnings rebound from FY27, supported by a strong development and construction pipeline.
Lendlease is targeting around $2.0 billion in capital recycling within its Capital Release Unit next year to help reduce debt and support future growth ambitions. Gearing is anticipated to fall to or below 15% by the end of FY26, with the Board supporting a $500 million securities buyback once further capital recycling milestones are hit.
Lendlease Group share price snapshot
Over the past 12 months, Lendlease Group shares have trailed the market, declining 12% compared to a 12% rise for the S&P/ASX 200 Index (ASX: XJO).
