Lendlease – Recovery Opportunity!

Lendlease is under Algo Engine buy conditions.

Last week’s profit warning could be the first stage of the
new CEO’s company reset. A review, covering the restructuring of operations and impact of market uncertainties will likely lead to further divestment of less-core businesses and re-prioritization of the existing 23 urbanization projects.

FY22 NPAT is forecast to increase, although still remind 20% below pre-pandemic levels. LLC will provide the FY21 results on 16 August.

Our preference is to own LLC via long call options. For further details please call 1300 614 002.

Lendlease – FY20 Review

Lendlease LLC reported FY20 NPAT of -$310m. The sale of the engineering business unit to Acciona is expected to complete soon with a sale of $160m, lower than the original $180m announced.

Lendlease is facing subdued trading conditions as the company navigates the effects of COVID-19, with development, investment, and construction income all down over 50% for the June period.

Despite short-term uncertainty, the long-term value remains attractive and the company’s strong balance sheet should provide it with resilience.

Lendlease – Gearing Falls

Lendlease announced a raising of up to $1.15bn  $9.80 per share.

The equity raising comprises a fully underwritten $950m institutional placement, along with up to $200m via a non-underwritten SPP.  With the proceeds from the placement, liquidity will increase to $4bn and company gearing will fall to 10-15%, (assuming completion of the sale of the Engineering business).

A correction in commercial real estate will provide new opportunities for Lendlease but will also ensure a tough operating environment in the near-term.