Lendlease profit plummets
LENDLEASE is looking at offloading its engineering and services unit after the property and infrastructure group’s first-half profit crashed 96.3 per cent to $15.7 million.
Lendlease, which had already announced a $350-million writedown of the troubled unit, is now considering alternatives after a review deemed it a non-core part of its business.
“We’re considering a range of options to provide clarity for our people while seeking to optimise securityholder value,” chief executive and managing director Steve McCann said.
Restructuring the overall business could cost between $450 million and $550 million before tax, Lendlease said yesterday.
Lendlease announced the hefty provision and review of engineering and services in November, citing issues with Sydney’s NorthConnex tunnel, excessive wet weather and remedial work due to defective design on some projects.
Lendlease suggested the unit could be attractive to buyers due to a pipeline of federal and state government work forecast to drive transport engineering growth of about 5 per cent per annum for the next five years.
Revenue for the six months to December 31 dipped 11 per cent to $7.68 billion, with the $350 million hit cutting profit from $425.7 million a year earlier. Lendlease declared an unfranked interim dividend of 12 cents, 22 cents lower than a year ago.