Lend Lease share price falls 8% after reporting "softening" construction conditions

Shares in listed property group Lend Lease fell 8% this morning after it warned that underlying construction markets in Australia and the EMEA (Europe, Middle East and Africa) “have softened in the second half of the 2013 financial year, “contributing to reduced earnings from the construction businesses" in these regions.

A short while ago Lend Lease shares were trading down 7.1% at $8.64 down from $9 at the start of trading.

The share price tumble came as announced plans to restructure its construction and infrastructure business amid softer  with decades old construction firms Abigroup and Baulderstone, plus its project management and construction and infrastructure services businesses, to be transformed into three sector-based business divisions.

The four businesses will be transitioned three businesses- one servicing the building sector, one servicing the engineering sector and one servicing the infrastructure services sector.

A decision about the branding of these businesses will be announced following stakeholder consultation during June and July.

Abigroup??? specialises in engineering, building, water and rail construction and dates back more than 50 years when it was established as Abignano Pty Limited in 1961. It became part of the Lend Lease Group in 2011.

Baulderstone is one of Australia’s largest building and engineering companies and has an even longer history with its establishment dating back to 1926, It has built some of Australia’s most iconic buildings including the heritage-listed Sydney Opera House, Sydney's Anzac Bridge, Brisbane's Story Bridge, Melbourne's Etihad Stadium and Adelaide's Convention Centre.

The new structure will take effect from August 1 with the aim of creating “more effective and competitive operating businesses”.

“It will enable greater leverage of skills and expertise, improved operational systems and efficiencies, said Lend Lease.

“The transition will increase our capacity for growth and facilitate more robust end-to-end client solutions,” said Lend Lease group chief executive Steve McCann.

“The combination of core skills in each of these organisations will result in best-in-class delivery capabilities.

“We will have businesses that compete for the leading market position against our external competitors in each of the engineering, building and infrastructure services sectors.

“These existing businesses have a rich and long history and this next step of consolidation will acknowledge and build on the success of this proud history.”

The transition will be headed by Lend Lease’s Australian construction and infrastructure business leaders, chief executive David Saxelby, chief operating officer, Dale Connor and finance boss, Andrew Muller.

 

 

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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