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20 August 2009
FY2009 Results in line with Guidance
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 | Net Operating Profit after Tax of A$307.5 million for the year |
 | Statutory Loss after Tax of A$653.6 million for the year |
 | Final dividend of 16 cents per share, franked to 100% |
 | Full year Dividend Payout Ratio of 61% of Net Operating Profit after Tax |
 | Change to future Dividend Policy amending payout ratio to between 40% and 60% of Net Operating Profit after Tax |
 | Gearing at June 2009 of 2.9% (net debt to total tangible assets, less cash) |
Lend Lease Corporation Limited (“Lend Lease”) delivered a Net Operating Profit after Tax for the financial year ended 30 June 2009 of A$307.5 million, despite difficult market conditions. The result is slightly above market guidance given in early May. This is a decline of 29% from the corresponding prior year, primarily due to a lower contribution from capital recycling and subdued trading conditions in the Australian and UK residential markets.
The Group’s Statutory Loss after Tax for the year was A$653.6 million. This amount comprises the write-downs and charges announced in the first half, together with a further A$179.3 million during the second half. The second half charge comprises further write-downs in the carrying value of assets together with expenses related to the Group’s cost reduction program. The asset write-downs were principally due to an increase in capitalisation rates, the likelihood of which was previously advised to the market.
| Profit After Tax | June 2009
A$m | June 2008
A$m1 |
Net Operating Profit After Tax
Inventory carrying value adjustments
Goodwill impairments
Other carrying value adjustments
Property investment revaluations | 307.5
(188.3)
(252.9)
(204.7)
(263.0) | 435.9
(121.5)
(60.2) |
Savings implementation costs
Net gain on Bovis UK pension scheme curtailment | (83.9)
31.7 | |
| STATUTORY PROFIT AFTER TAX | (653.6) | 254.2 |
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Final Dividend 2
Earnings Per Share (EPS) on Net Operating Profit after Tax 3 | 16 cps
72.5 cps | 34 cps
108.7 cps |
(1) June 2008 has been adjusted to reflect the impact of retrospectively adopting AASB Interpretation 12 ‘Service Concession Arrangements’
(2) The final dividend is 100% franked; the interim dividend for the period ended 31 December 2008 was 60% franked
(3) EPS is calculated based on Operating Profit after Tax and the weighted average number of shares on issue including treasury shares.
Lend Lease declared a final dividend of 16 cents per share, franked to 100%. This represents a payout ratio of 61% of Net Operating Profit after Tax for the full year. Lend Lease has amended its Dividend Reinvestment Plan to allow shares to be offered at a 2.5% discount. The discount will be applicable for the final dividend payable on 25 September 2009.
In order to increase the Group’s investment capacity, the dividend policy is to be changed with effect from the FY10 interim dividend. The dividend payout ratio is to be amended from between 60% and 80% of Net Operating Profit after Tax to between 40% and 60% of Net Operating Profit after Tax. Lend Lease will frank the dividend to the maximum extent possible on a sustainable basis.
Outlook
Commenting on the outlook for Lend Lease, Group CEO, Steve McCann said:
”Lend Lease has performed well, despite the very challenging market conditions and while we remain cautious, we are confident about the Group’s outlook. A key impact on the business over the last 12 months was a lack of transaction activity, which hindered our asset recycling ambitions. However, Lend Lease is not a distressed seller of assets and we will only sell assets where we believe it will optimise longer term shareholder value.
“We materially reduced the cost base. The Group has very strong liquidity and is well capitalised. This sets Lend Lease up well to take advantage of its leading market positions as the cycle begins to turn.
“Finally, our business model and reputation for partnering enables Lend Lease to maintain a strong and diverse project pipeline, underpinning long-term earnings potential,” Mr McCann said.
Group Financials
Lend Lease maintains a strong financial position and as at 30 June 2009 had cash reserves of over A$1 billion and low gearing of 2.9% (net debt including other non-current financial liabilities to total tangible assets, less cash).
The Group’s investment grade credit rating is unchanged and Lend Lease remains comfortably within its bank covenants. These financial covenants vary, with the most onerous being a net interest coverage ratio of 2.5 times (based on EBITDA), and a gearing ratio of less than 50% (net debt to total tangible assets, less cash). The earliest maturity date for a material Group debt facility is November 2010 for an amount of £350 million.
Annuity style earnings from property assets and funds under management represented 33% of EBITDA, well above the target of 20%. This provides support to the Group’s investment grade credit rating.
For further information please contact:
Sally Cameron
Lend Lease Corporation
Tel: 02 9236 6464
Financial Reports
Lend Lease Corporation Limited today announces its full year results for the year ended 30 June 2009. Attached are the following documents:
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