Lendlease profits up 13 percent in FY16 - and no sign of rise in apartment settlement defaults
Lendlease secured strong figures for the FY16, showing a profit after tax of $698.2 million.
Group CEO and managing director Steve McCann suggesting that solid cash generation was a highlight.
“Solid cash generation was a highlight of the result with operating cash flow representing over 120 per cent of Profit after Tax,” he said.
“Lendlease produced a strong result for the 2016 financial year (FY16) and maintained a disciplined and focused approach to delivering on our strategy.
The development segment delivered a very strong result across both residential and commercial.
Residential settlements were up 7 per cent to 4,790 units.
“The high level of residential pre-sales provides good future visibility for earnings," McCann said.
“We settled over 1,200 apartments with non-settlements at less than 1 per cent versus our historical average of closer to 3 per cent.
McCann also sited the contribution of the commercial buildings to the strong figures.
“The forward sale of three major commercial buildings, two at International Quarter London and one at Darling Square in Sydney, has further de-risked our development exposure."
The Australian Construction result was robust with EBITDA margins up by more than 1 percentage point to 3.7 per cent.
The Investments segment, representing 37 per cent of operating EBITDA, continues to deliver solid recurring style earnings.
Below is the Lendlease group financial figures
Group CFO Tarun Gupta said the FY16 result ensures that Lendlease enters FY17 in a strong financial position.
“Generating in excess of $850.0 million in operating cash flow while deploying a further $3.0 billion6 into development of projects is a significant achievement.”
At 30 June 2016, Lendlease held a cash balance of $1.0 billion and undrawn facilities of $2.2 billion, providing substantial financial flexibility.
Below is Lendlease's financial performance
FY16 major highlights
Profit after Tax of $698.2 million, up 13 per cent and earnings per stapled security of 120.1 cents, up 12 per cent
Return on equity of 13.0 per cent2, up 60 bps
Final distribution of 30.0 cents per stapled security, taking the full year distribution to 60.0 cents per stapled security
Operating cash flow of $853.0 million, 122 per cent of Profit after Tax
Further $3.0 billion deployed into development of projects3
Strong balance sheet with gearing of 6.5 per cent4 and available liquidity of $3.2 billion
Further de-risking Development with the forward sale of three major commercial buildings
Record pre sold residential revenue of $5.9 billion5, up 13 per cent
Establishment of a $400 million managed investment vehicle
Construction backlog revenue of $20.7 billion, up 20 per cent
Funds Under Management (FUM) of $23.6 billion, up 11 per cent