Lendlease Group

Reported FY '26 IDC segment operating EBITDA was $542 million. IDC earnings per security were $0.337, and the full-year distribution was $0.157 per security. Construction revenue was $3.9 billion, up 29% on FY '25; new work secured was $6.4 billion, up 28%; backlog revenue was $8.4 billion, up 42%; and Construction EBITDA margin was 4.3%. The group recorded a statutory loss after tax of $749 million, including $182 million of noncash negative investment property revaluations and impairments. Group operating profit after tax was a loss of $567 million. Reported gearing was 30.3% at year-end; underlying gearing was 37.7%, and pro forma underlying gearing was 30.2% after taking into account $1.3 billion of contracted transactions. Net overheads fell from $466 million to $363 million, down 22%, and liquidity was approximately $4 billion. For FY '27, IDC earnings per security is guided to $0.37 to $0.41. Management expects lower FUM to reduce investment income, a strong development earnings recovery from settlements at One Circular Quay and Victoria Harbour, continued Construction growth with a 3% to 4% EBITDA margin target through the cycle, and no specific FY '27 guidance for CRU. They also said net finance costs should remain elevated and that gearing is expected to stay elevated at the half before easing later in the year.

Andrew Nieland framed FY '26 as a year of disciplined execution, saying the group simplified operations, recycled capital, built momentum in IDC and reduced overheads. He emphasized that the business is progressing from a high-capex phase toward a more neutral cash profile in FY '27, with settlements, capital recycling and cost actions expected to support deleveraging. His tone was candid about the disappointing statutory loss and CRU drag, but constructive on the operating momentum in Construction and the clearer earnings path ahead.

Andrew Nieland highlighted IDC segment operating EBITDA of $542 million and explained the bridge in the year: Construction recovered strongly, Investments delivered material transaction earnings, and Development had low completions. He detailed CRU’s $500 million EBITDA loss, including $340 million of asset impairments and $92 million of provisions on retained international construction risks, while corporate costs were $221 million with $114 million of additional charges tied to restructuring and transformation initiatives. He also said net overheads fell to $363 million from $466 million, net finance costs were $194 million, reported gearing was 30.3%, underlying gearing was 37.7%, and liquidity was about $4 billion. On capital allocation, he said repurchases were not undertaken because gearing remained elevated and that any extra recycling from CRU and IDC would primarily go to further debt reduction.

Analysts pressed management on the FY '27 IDC guidance range, with questions about what drives the low versus high end; Andrew said the spread mainly comes from investments growth, development progress at One Circular Quay and Victoria Harbour, Construction execution, and interest costs. Multiple questions focused on gearing and the gap to the earlier 15% target; management attributed the gap mainly to transaction timing and said deleveraging will come from multiple levers, including about $1 billion to $1.5 billion of capital recycling across Investments and Development plus CRU transactions. Analysts also asked about the pace of sales at One Circular Quay, where management said demand remains strong but buyers are taking longer, and noted that a large portion of FY '27 earnings from settlements is secured. Other Q&A covered delays at Comcentre and One Darling Point, which Andrew said were pushed into FY '29 due to in-ground delays and presales timing, but with no margin impact.