Lend Lease slips into the red

  • Business
  • Thursday, 21 Aug 2003

SYDNEY: Australian developer and real estate fund manager Lend Lease Corp Ltd reported yesterday a deep plunge into the red for 2002/03 after writing off A$945mil on its troublesome US businesses. 

But the company, whose Bovis construction unit managed the clean-up of the World Trade Centre after the Sept 11, 2001, attacks, pleased the market by matching expectations for underlying profit and forecasting solid growth in earnings ahead. 

“Clearly their guidance for the market for '04 looks above market, and they said there's no one-offs in there,” said UBS Warburg analyst Mark Ebbinghaus. 

Lend Lease chief executive Greg Clarke told Reuters that increased profit in 2003/04 would come from cost cuts at Bovis, strong fund management and urban development performance in Australia, and public sector military housing and hospital projects in the United States and Britain. 

Greg Clarke

“We've got a lot of diversity,” Clarke said. “We're in all the sectors. When the private sector isn't spending, the public sector is. It's Keynesian economics.” 

Lend Lease said its after-tax loss for the year ended June 30 reached A$714.8mil after it wrote off A$945mil on its US debt and property fund management businesses, most of which are being sold to Morgan Stanley. The previous year the company reported a A$226.3mil profit. 

Otherwise, net profit before significant items came in at A$230.2mil, in line with the expectations of six analysts polled by Reuters.  

The company had forecast net profit in 2003/04 of A$240mil–A$250mil in core earnings. – Reuters  

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