Lendlease Group

For the half, Lendlease reported statutory loss of $318 million and OPAT loss of $200 million. IDC segment EBITDA was $204 million, down from $341 million, while Investments EBITDA was $101 million, Development EBITDA was $34 million, Construction EBITDA was $69 million, and CRU EBITDA was a loss of $284 million. Group operating EBITDA was a loss of $135 million versus a gain of $318 million a year earlier, and net finance costs fell to $85 million. Construction revenue rose 22%, and the construction EBITDA margin was 3.7%; funds under management was stable at $48.7 billion, gross apartment presales rose to $3.3 billion, and co-investment yield was 4.4%. On the balance sheet, reported gearing was 25.8% and underlying gearing was 32.9% excluding hybrids, with $3.3 billion of liquidity. Guidance was maintained for IDC earnings of $0.28 to $0.34 per security, with second-half IDC expected to be stronger than the first half; no CRU EPS guidance was given, while FY '26 targets include $2 billion of CRU capital recycling, a $350 million overhead run rate exit, and 15% underlying gearing by year-end subject to transaction completion.

Tony Lombardo framed FY '26 as a transitional year in which Lendlease is executing the May 2024 strategy reset. He emphasized the shift toward Australian operations and the investments platform, plus continued capital release from non-core assets, saying the company is making progress toward a cleaner balance sheet and eventual buyback eligibility once gearing visibility improves. His tone was constructive and execution-focused, repeatedly stressing disciplined recycling, new development origination, and a stronger FY '27 and beyond.

Simon Dixon focused on the first-half bridge and the balance sheet. He said operating EBITDA fell to a loss of $135 million, net finance costs were $85 million, and the group recorded $180 million of noncash write-downs/provisions tied to Communities land and international construction tail risks; he also cited $58 million of overhead reduction to $197 million and a target exit run rate of $350 million by end-FY '26. On liquidity and leverage, he pointed to $3.3 billion of available liquidity, debt maturity of 2.5 years, and 25.8% reported gearing versus 32.9% underlying gearing excluding hybrids.

Analysts mostly pressed on what drives the second-half upside to IDC guidance, the timing and certainty of the $3 billion recycling pipeline, and how much of the CRU cost base is structural. Management said the $0.28 to $0.34 IDC range depends mainly on underlying performance plus the timing of TRX and the Crown Estate JV; they quantified the hybrid benefit at $9 million and said the Communities write-down was noncash, while the $44 million construction provision is cash-relevant later. They also said $640-odd million is contracted/JV-related, over $1 billion is in exclusivity, and the rest is active but earlier-stage, with the 15% gearing target predicated on $3 billion of divestments.