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A "whoops" moment for LLC today, according to this report in The Age :)

 

Fat finger at Lend Lease? Someone seems to have accidentally (we assume) hit send on the draft annual report.

 

According to what was sent out, Lend Lease will book a full-year net profit of $758.6 million and earnings before tax and interest of $1.2 billion. It also flagged a distribution of 66 cents a share.

 

The company said these numbers, which were "inadvertently" released, haven't been audited yet, but that the final result, to be presented August 28, will be in line with them.

 

But early or not, the market is liking the numbers, pushing Lend Lease shares up 2.8 per cent to $16.94.

 

Here's how the company explains the glitch:

 

"While preparing for our annual report online release ... a testing environment appears to have been inadvertently made accessible to the public through an automated search engine. Unfortunately six pages of the draft annual report appear to have been accessed by members of the public. The breach has now been rectified and all further testing has ceased."

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Michael West article suggesting some ATO issues in relation to it's retirement village business

extract

As the directors of Lendlease peer down upon their shareholders from the stage of the Grand Ballroom at the Four Seasons Hotel in Sydney later this month, they will be hoping nobody asks them about tax. Specifically, an investigation by the Tax Office into the groupâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s billion-dollar tax bluff.

 

After months deliberating, the Tax Office issued a draft ruling last week, confirming a series of reports here, relating to Lendlease âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“double-dippingâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ for tax deductions in its retirement village business.

Continuous non-disclosure

 

Arguably, under Continuous Disclosure laws, it should have told the ASX that it has a large liability heading its way. It may have to restate six years of its financial statements, the stuff which is supposed to be âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“true and fairâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ, reflecting the years in which the company was engaged in its double-dipping.

 

Further, Lendlease faces recriminations from a large investor in the Netherlands.

 

It sold a 25 per cent interest in its retirement living business in October 2017 to Dutch pension asset manager APG. APG is a subsidiary of ABP, Europeâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s largest pension fund, which may be whacked with a $75 million tax liability on the $450 million investment in the RV operation.

 

Incidentally, after Lendlease struck that deal with the Dutch they used debt raised by the joint venture to do a share buy-back.

 

The AGM is on November 20. The ATO will receive submission on the Draft Tax Ruling until November 29, which is good timing for the board.

 

Has the group already made its submissions? Has PwC, or KPMG? Perhaps a shareholder might put this to Ullmer at the meeting. As head of the Audit Committee, can director David Craig confirm that Lendleaseâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â€š¬Ã…¾Ãƒâ€šÃ‚¢s financial statements are correct?

 

Has the Board notified its insurers? Will the contract with the Dutch be tested? Why has the market not been informed?

 

While the interests of shareholders and taxpayers appear to stand at odds; that is, eliminating tax boosts the bottom line and that is good for shareholders, the potential for longer term damage via confidence in management may outweigh the shorter term gain.

 

read more - https://www.michaelwest.com.au/tender-trunc...village-racket/

 

Total short positions as at 28/10/10 = 1.41%

https://www.shortman.com.au/stock?q=llc

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Michael West flags a possible upcoming tax issue (see previous post). Credit Suisse announce a hefty price target increase and retains an Outperform rating. Meantime short positions seem to have increased substantially since last post (1.14%) - as at 31/10/19 = 3.05% https://www.shortman.com.au/stock?q=llc

 

Lend Lease price upgrade

Analysts at Credit Suisse have announced a hefty price target increase for shares in real estate and infrastructure giant Lend Lease, lifting it from $16.83 to $19.85 while retaining a outperform rating.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“We have revised our FY21 and FY22 earnings per share estimates up by 2.4 per cent to reflect slightly higher Development earnings expectations,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ Credit Suisse said in a note. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“With a forecast total shareholder return (TSR) of +8.0 per cent, we retain our outperform rating.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

 

As for downside risks, Credit Suisse nominated lower-than-expected development volumes or margins, lower-than-expected construction margins and/or a failure to sell its engineering and services (E&S) business, something it says could negatively impact market sentiment towards the stock.

 

âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Any upside from the sale of the E&S business is hard to quantify, but a sale of the service business could offer some potential upside,âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ the broker said in relation to the latter risk. âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Services typically makes $50 million per annum of EBITDA, and assuming a six-times multiple implies a potential sale price of around $300 million.âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ

 

Credit Suisse said it continues to âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“err on the side of caution, and continue to assume no positive sales proceedsâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ÂÂ.

 

Lend Lease shares are up 1 per cent to $19.20 today.

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Just sold engineering biz to Acciona.

 

Amongst the write downs, were mentioned:

It blamed the write-downs on lower productivity on its NorthConnex project for Transurban, "excessive wet weather", and access issues and remedial work due to defective design on other projects

pretty sure there's a national drought (emergency) happening. !!!

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Should I Buy Lendlease Shares 2021 Highlights Full Analysis

About Lendlease Shares 2021

Lendlease is a globally integrated real estate and investment group with core expertise in shaping cities and creating strong and connected communities. Being bold and innovative characterises our approach and doing what matters defines our intent.

Headquartered in Sydney, our people are located in four operating regions: Australia, Europe, the Americas and Asia

ASX:LLC Share Price

On the 5-year price performance chart, Lendlease Shares have been relatively sideways moving, however reaching an all-time high back in mid-2019, before falling back down to ~$12.5/share over the proceeding six months.

Today the Lendlease share price is $12.165, which is in the middle of its 52-week range of 10.73-14.89.

ASX:LLC Shares Dividend History

Lendlease shares typically announce a dividend with the release of its half-yearly results in February and full-year results in August

The dividend yield of LLC is 1.46%.

 

Fundamentals

there seems to have been a large slowdown of revenue and an even greater drop-off in earnings from FY2019 – FY2020.

 

Looking at the groups EBIDTA this has taken a substantial impact since reaching all-time highs in 2018 over A$1billion. This seems to be largely attributed to the groups underperforming engineering business projects on the NorthConnex, Kingsford Smith Drive and Gateway Upgrade including what is also looking to face similar circumstances in their Joint Venture on the Melbourne Metro Project.

 

ASX:LLC As A Development Arm:

Lendlease highlight the requirement of increasing capital expenditure however also expecting a larger development production from invested capital moving forwards. This is largely due to their renewed focus on city building in massive pipeline communities, where they should be able to get economies of scale due to the size of the developments and favourable operating conditions.

ASX:LLC As An Investment Company

Lendlease is significantly growing its investment arm, from a total Funds under management in FY2010 of A$10billion to a Funds under Management in FY2020 of over A$36billion. The group also seems to have this decently diversified across Australia, Asia, Europe and the Americas.

Lendlease Construction Arm:

If the picture here isn’t very clear yet, the future aim of Lendlease can pretty much be summed up in our opinion as an “end-to-end, city builder” (ETECB), where they will secure and redevelop large parcels of land under favourable conditions and contracts. The building division is there to construct these developments, under once again favourable conditions.

The EBIDTA margin on the construction division is typically much lower than their other businesses in investment and development as this is a very traditional business with a large amount of players.

Departure Of The CEO And CFO

On the 26th of November 2020, the group announced the departure of the companies CFO (Tarun Gupta). Tarun will leave the Group. Mr Gupta has accepted the role of Managing Director and Chief Executive Officer of Stockland. Whilst this seems like a logical step for the CFO to take it raises questions when only months later the groups CEO Steve McCann Announces his resignation.

Steve McCann has since moved on to lead Crown Resorts as their CEO. This only raises the question, that if the CFO was in the know surely he would have been a front runner to step up into Steve’s shoes on a much larger salary than he would be on at Stockland Group.

There may be nothing more around this, however, the timing seems a little strange.

Full Artilce if Interested

Thanks again :)

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Lendlease’s services arm is a maintenance and asset management contractor that looks after airports, roads, wind farms and the like. The unit has been earmarked for sale for the past two years, and it is now officially up for sale (interlude for Covid)

 

Likely buyers are UGL, owned by CIMIC, and Monadelphous, both believed to be working through the data room documents with an eye to submitting offers, while fellow listed player Service Stream and French owned Egis are also in the mix. Downer Group and Ventia, also owned by CIMIC, have dropped out of the process. Private equity is not thought to be involved.

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