Lendlease announces restructuring as it warns of a difficult year | news

Lendlease has warned of a challenging year as Covid-19 and a restructuring plan overshadow the company’s improved financial position.

In its results for the year ended June 30, 2020, announced this morning Australian time, the company posted pretax profit of A $ 222 million (£ 118 million) – a significant improvement over a loss of $ 310 million ( £ 168 million). last year, largely due to the success it had in selling its engineering business.

Despite the upgraded position, CEO Tony Lombardo, who gave his first earnings update since taking the top job in June, said the company had definitely felt the pressure of the pandemic for the past 12 months.

He said a pre-tax provision of $ 60 million (32 million plan.

The real estate giant, which had sales of $ 9.9 billion (£ 5.24 billion) versus $ 11.8 billion (£ 6.25 billion), said construction activity was driven by delays in starting new projects , Site closings and lower productivity, as well as the impact of social distancing, logs at its sites was reflected in a 16% decrease in sales versus a 9% decrease in hours worked.

The company added that it still worries about the next 12 months, and announced plans to add 160 million each year to June 30, 2023.

Lombardo said, “As an international real estate company, we expect FY22 to be the cyclical low for both development production and profitability.

“We aim to generate solid returns in the construction and investment segments, although activity levels are likely to continue to be affected by the pandemic.”

The company’s shares, listed on the ASX, lost 7.5% on Monday to close at $ 11.64 (£ 6.16) after earnings for the first half of the next fiscal year took some declines related to the change in direction of business .

It said it plans restructuring charges related to the revamped organizational structure of $ 130 million (£ 69 million) to $ 170 million (£ 90 million) and an impairment loss of between $ 230 million (122 million extra money) spend on “a small number” of development projects where it has decided to change strategy.

The review of how exactly the business will be restructured is still underway by Lombardo.

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