Lendlease flags high first-half gearing, reaffirms FY guidance
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The news: Real estate giant Lendlease has reaffirmed its full-year earnings guidance, with a number of transactions targeted for completion, but flagged its debt gearing will remain high through the first half of the fiscal year.
The numbers: The company said guidance for group earnings remains unchanged at 54 to 62 cents per security, with the $1.06 billion sale of 12 residential master-planned communities to Stockland Supalai expected to be completed today.
Lendlease will receive a $515 million payment on Friday, with another $450 million anticipated by 31 January and the balance by 30 June. The deal was approved by the competition regulator in September.
Lendlease shares are down 1.1% to $7.01 in early trading on the ASX.
The context: Lendlease chief executive Tony Lombardo said the completion of the deal was a key milestone in the company’s target for completing $2.8 billion in capital recycling in FY25. The company has been under pressure from shareholders to boost returns from its sprawling international holdings and focus on the Australian business. It has outlined plans for asset sales worth $4.5 billion, including its US and UK construction operations.
Lombardo said further capital recycling initiatives remain ongoing, including in Malaysia, China and Australia. He flagged that gearing is expected to remain elevated due to the timing of these transactions and planned capital expenditure, but it will trend down in the second half of FY25 towards the top end of the target 5% to 15% range.
The source: ASX announcement
