Lendlease shares open higher on improving FY25 outlook
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More news: Lendlease shares advanced at market open on the ASX after the real estate group reaffirmed its full-year guidance at its annual general meeting this morning.
Lendlease shares were up 1.9% to $6.77 by 10:40am AEDT.
Lendlease reaffirms FY25 guidance, flags $500m buyback
The news: Real estate group Lendlease reaffirmed its full-year guidance and said it expects gearing to trend down "significantly" in the second half of the year.
The numbers: Lendlease said it expects full-year group earnings per share to fall within its previously guided range of 54 and 62 cents.
The group said gearing is anticipated to remain elevated during the first-half of FY25 due to the timing of key capital recycling transactions and planned capital expenditure across major development projects.
However, gearing is expected to trend down "significantly" in the second half of the year, towards the top end of the company's target 5% to 15% gearing range.
Lendlease also said the launch of a share buyback of up to $500 million in the near term is subject to completing certain capital recycling transactions to provide confidence that it will be within its target gearing range by the end of FY26.
The context: In prepared remarks ahead of today's annual general meeting, Lendlease CEO and managing director Tony Lombardo said the group anticipates improved market and operating conditions for its investments segment beyond FY25 to FY26, supporting profitable growth in funds under management, an improvement in co-investment yields, and higher transaction volumes.
Lombardo noted that FY24 was a year of "significant change" for Lendlease, after unveiling a new strategy to offload $4.5 billion worth of assets from its international operations, simplify its management structure and undertake cost cuts.
What they said: "In simple terms, our financial performance in recent years hasn't met our securityholders' expectations. Nor has it met out own," said Lombardo.
"The turnaround plan we launched in early 2022 was an important first step.
"However, with the global property market downturn running into a third year, it became clear that we needed to make more fundamental changes."
The source: ASX announcement
