Share prices are up this morning as Lendlease Group [ASX:LLC] stock rebounds for 4.15%. At time of writing LLC is currently trading at $13.82, up 55 cents from yesterday’s close.
The embattled international property and infrastructure group suffered severe losses on the stock market last Friday when they announced substantial underperformance is some of its key business units. At the time, Lendlease anticipated it would require provisions to the sum of $350 million.
What caused the rebound?
LLC’s share price has been on the up following the announcements made during this morning’s annual general meetings.
Despite the company’s recent woes, LLC announced an after-tax profit of $793 million, up 5% on the previous financial year. The company also announced its development pipeline grew by more than $20 billion in financial year 2018, which now stands at $71 billion. CEO and managing director Steve McCann stated this gives over a decade of future earnings visibility.
Lendlease still expects it will take the $350 million provision it announced last week. Approximately 90% of this figure related to three projects, largely the $3 billion NorthConnex toll road in Sydney. However, these projects are all expect to be completed by 2020.
What’s next for Lendlease
Today’s rebound probably comes as a favourable sign to the board of directors. After what some analysts have described the recent performance as ‘abysmal’, Lendlease need to show investors it can get itself back on track.
The company isn’t out of the woods yet, however. LLC still faces a string of issues both in Australia and abroad. Project director of the Sydney NorthConnex project and long-time Lendlease executive, Damien Hertslet, has given notice he will leave the role within the next month. His departure is likely to cause further headaches for the issue-plagued project.
Abroad, Lendlease has been engaged in a legal battle with the north London council of Haringey to reclaim some of the $7.2 million it has already spent on a $3.6 billion 6400-unit development venture. Both sides have only recently reached a settlement, with the venture being canned in July this year.
Despite the difficulties the company has faced, for today at least, investors seem pleased with LLC’s performance, with the company dedicating further resources to stabilise its shaky engineering unit.
For Money Morning
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