Australian property company Lend Lease revealed a sharp increase in first-half profits today, but was cautious on the prospects of the UK market.
The UK was where it forecast the most significant ‘headwinds’ of trouble blowing , especially for its communities division, which masterplans Greenfield schemes and undertakes urban regeneration projects. However, it said weakness in the UK residential, retail and investment markets would be offset by strong residential sales from its Australian communities division.
Profit after tax was down 14% to A$34m for the retail division and down 5% to A$57m for the communities division. However, strong performance from its investment management and project management and construction arms led to a rise of 61% in the group’s net operating profit to A$263m.
Lend Lease said it had sufficient cash on its balance sheet to take advantage of opportunities that arose from the downturn.
No Bluewater sale
Chief executive Greg Clarke said that a previously mooted sale of its 30% stake in the Bluewater shopping centre in Kent would not go ahead. ‘We expect to continue to deliver competitive growth in full year net operating earnings,’ Clarke said.
‘We have previously flagged to the market that our operating earnings would include some major asset sales such as Bluewater and King of Prussia shopping centres. However, we are in the fortunate position of not being a forced seller of assets and, with current markets lacking transactional liquidity, we may decide to defer any such sales in the short term.’
‘For full year 2008, even without a major asset sale, we are expecting to come in slightly under our target annual average earnings per share growth of 10% a year over a five-year period.’