Lendlease to sell off engineering division
LENDLEASE Group says it will sell its engineering and services units after taking a $500 million hit related to three disappointing roadworks projects that contributed to a 41.1 per cent drop in profit.
The company said it would cut its final dividend by 5¢ a share after making just $467 million in profit after tax in the 12 months to June 30, down from $793 million the year before.
Chief executive Steve McCann called it a challenging year for the company but told analysts “our pipeline looks fantastic and I think our outlook looks very strong, in terms of delivering longerterm earnings”.
Investors seemed to agree yesterday, with Lendlease
stock up 8.8 per cent to a twoweek high of $14.73 at 11.24am.
Lendlease said it had sevGOLD eral interested parties undertaking due diligence for its engineering and services units, which lost $461 million in fiscal 2019.
The company said it would take a $500 million hit on the Gateway Upgrade North and Kingsford Smith Drive highway widening projects in Brisbane, as well as the NorthConnex M1/M2 9km tunnel project in Sydney.
Gateway Upgrade North was finished in March and the other two projects are scheduled to complete next year.
Once its “non-core” engineering and services units are sold, Lendlease will be left with its construction, development and investment divisions, which it said had a profit after tax of $804 million, down 16 per cent from last year.