Lendlease on the mend as restructure gathers pace

Lendlease is confident it can turn itself into a leaner, more efficient business after posting a net loss for the full year, with the global property giant saying it is making good progress with its restructure.

The diversified group, valued at over $7 billion, is in the middle of a strategic revamp designed to take costs out of the business and simplify its operations

Lendlease CEO Tony Lombardo on Monday said the first phase of the program had gone to plan and the overall “momentum” of the business should accelerate into fiscal 2023 and 2024.

“The group enters the new financial year with solid momentum, providing confidence in the creation phase of our five-year road map,” he said. However, he warned the business was facing significant headwinds, with higher inflation and interest rates likely to pose challenges.

The company on Monday reported a net loss of $99 million for the financial year, compared with a net profit of $222 million in 202. The loss came mainly on the back of the sale of its services business, however, Lendlease has also had to contend with rising construction costs, COVID-19 -related productivity delays and supply chain issues.

Excluding the one-off items, the core operating profit after tax was $276 million, down from $377 million in the prior year.

A lot of the heavy lifting of the restructuring work took place in the first six months of the 2022 financial year, and we have started to see some benefits.

Lendlease CEO Tony Lombardo

Lombardo replaced the long-serving CEO Steve McCann in June last year, and started his tenure with a company-wide review of the business to assess the ongoing impacts of the global pandemic,

The ASX-listed Lendlease builds, develops and invests in apartments, office towers, large-scale projects such as the $2 billion Google project in San Francisco and the Melbourne Metro system.