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Lend Lease boosts profit by 25% in H1 results

Lend Lease has reported a 25 per cent half-year profit rise on the back of a strong performance from its European business

The firm’s profit after tax grew to A$315.6m (£160.4m) in the six months to 31st December 2014, up from A$251.6m (£127.3m) for the same period in 2013.

Lend Lease’s construction arm saw profit grow 14 per cent to A$86m (£43.7m), despite bringing in less revenue, delivering an EBITDA margin of 2.9 per cent.

The firm is targetting margins of 3 to 4 per cent across its global construction business.

The property development arm of the group saw profit after tax reach A$145m (£73.7m), thanks in large part to residential activity in Australia. Lend Lease has a development pipeline of A$40.4bn (£20.5bn) globally, two thirds of which is residential.

European EBITDA was up by more than 400 per cent following the company’s £656m sale of its 30 per cent stake in the Bluewater development to Land Securities.

In Europe, pre-sold revenue grew by more than 300 per cent, totalling A$1.1bn (£559m). The company is also the preferred bidder on several schemes which are expected to be secured over the next 12 months.

Lend Lease has cash and undrawn facilites of around A$2bn (£1.01bn) globally, and a gearing of 12.4 per cent as of 31st December 2014.

Dan Labbad, chief executive officer of international operations, said that London based regeneration sites “will be a key driver of earnings over the next few years”.

“We have 900 homes in delivery in Elephant & Castle, and have received planning approval for the next stage, West Grove at Elephant Park, which will add a further 593 homes to the production schedule,” he said.

“We’re also close to announcing a partnership with one of the UK’s leading housing associations, for the progressive acquisition and management of around 550 affordable homes at the site.

“Over the next ten years, we will deliver a mix of social rent, shared ownership and private homes that will set a new standard for sustainable living in central London.”

Southwark Council awarded Lend Lease detailed planning permission for the second phase of its £1.5bn regeneration of Elephant and Castle in December 2014.

Lend Lease is also set to submit revised plans for its development at Deptford, which was initially slated to deliver over 900 homes.

Mr Labbad said that the company was in “negotiations with a major tenant” for the second commercial building at its International Quarter development

“We will continue to launch new products [in London] to meet demand,” he said.

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