Lendlease to exit overseas construction operations, focus on cost cuts

LENDLEASE Group said on Monday it would recycle A$4.5 billion (S$4 billion) of capital by exiting its overseas business, and undertake a A$500 million phased share buyback plan, in a bid to reorganise its structure and cut costs.

The Australian construction company aims to unlock the A$4.5 billion capital by walking away from its international construction business, and accelerating payments from its offshore development projects.

Shares of the company rose nearly 10 per cent in early trade, set for their best day since April 2020, if gains hold. Lendlease’s stock is the top gainer in the ASX200 benchmark index.

The company aims to lower its cost base, with an annual target of A$125 million pre-tax savings, and also return capital to its shareholders via a A$500 million share buyback programme.

“We recognise that our security price performance and security holder returns have been poor as we have faced structural challenges and a prolonged market downturn,” said Lendlease Chairman Michael Ullmer.

The company expects various impairments and charges in the range of A$1.15 billion to A$1.48 billion in fiscal 2024 on its pre-tax income, arising from writedowns of goodwill attached to its US and UK construction businesses. REUTERS