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Lendlease profit jumps on building boom

AAP logoAAP 18/08/2016 Lilly Vitorovich

Strong demand for new apartments and office buildings has helped Lendlease deliver a 13 per jump in annual profit, and it says it has a growing pipeline of projects.

The property and construction company made a net profit of $698.2 million in the year to June 30, with the improvement on the previous year's $618.6 million driven by improved presales of apartments, and forward sales of two major commercial buildings in London and one in Sydney.

Lendlease also received $1.2 billion in cash proceeds from two completed office towers at the Barangaroo development in Sydney.

The company's development business was the star performer, with a 30 per cent rise in annual operating underlying earnings.

Residential settlements rose seven per cent from a year ago to 4,790 units.

Chief executive Steve McCann said the high level of residential pre-sales provides "good future visibility for earnings."

"We settled over 1,200 apartments with non-settlements at less than one per cent versus our historical average of closer to three per cent," he said.

Presales of the three major commercial buildings has "further de-risked our development exposure," Mr McCann said.

Chief financial officer Tarun Gupta said the 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 billion into development of projects is a significant achievement."

Lendlease had cash of $1.0 billion and undrawn loan facilities of $2.2 billion at the end of June.

Lendlease shares were up 10 cents at $14.21 at 1153 AEST.


* Net profit up 12.9pct to $698.2m

* Revenue up 13.6pct to $15.09b

* Final dividend up three cents to 30 cents

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