Lendlease Group (ASX: LLC) expects to achieve ROE of 8% in FY24

Highlights

• Lendlease Group is an international property and investment company
• In FY23, the company recorded 9% YoY increase in funds under management to AUD 48.3 billion
• Aware Super has the maximum stake in LLC with a shareholding of around 9.58%

Lendlease Group (ASX:LLC) is an ASX listed company with operations in Asia Pacific, Europe and the Americas region. The company deals in retail property management, asset management and development, green field development projects and large scale urban regeneration.

In the financial year 2023 (FY23), the group made progress towards becoming an investment-led business. In the reported period, funds under management stood at AUD 48.3 billion, an increase of 9% YoY and development work in progress reached AUD 22.9 billion.

The period saw 12.8% YoY fall in total segment EBITDA to AUD 705 million, while total invested capital increased by 13.8% YoY to AUD 9.1 billion and asset under management surged by 9% YoY to AUD 32.8 billion.

Top 10 shareholders of LLC

The top 10 shareholders of LLC have around 32.85% shareholding in the company. The highest stake is held by Aware Super followed by Allan Gray Australia Pty Ltd with a shareholding of ~9.58% and ~6.23%, respectively.

Recent business update

On 3 November 2023, the company shared an update on development agreements through an ASX release. The company informed that Goole and LLC mutually agreed to end the deal related to the Development Services Agreements. The agreements concern the four master-planned districts, which is together known as San Francisco Bay project. AS per the announcement, the agreements were not mutually beneficial for the parties.

Outlook

The company is committed to advance its investment-led strategy and deliver its development pipeline.

In FY24, LLC expects to meet the lower end of its ROE target of 8-10%. Furthermore, during the reported period, the company expects recovery in development earnings, underpinned by key urban projects and improvement in community settlements, target completions are anticipated to more than double to more than AUD 8 billion.

In FY26, the company expects to deliver funds under management of AUD 70 billion.

Share performance of LLC

LLC shares closed 0.15% lower at AUD 6.85 apiece. Including this, the share price has decreased by 7.056% in the past 12 months and has increased by 7.704% in the last one month.

The 52-week high of LLC is AUD 9.02, recorded on 3 February 2023, while the 52-week low is AUD 6.09, recorded on 30 October 2023.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 07 December 2023. The reference data in this report has been partly sourced from EODHD/Others.

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