Profits: Lend Lease Cuts Dividend/UGL Increases Payout

By Aireview

February 20, 2012 11:34 PM EST

Lend Lease has lopped interim dividend from 20 to 16 cents, a slash of 25% after a small fall in earnings for the period to December 31.

That was after a near 4% drop in first half earnings and caution about trading conditions for the remainder of its financial year.

Analysts said the reduced dividend could be a sign the company saw the need to preserve capital for new developments, such as the Barangaroo project in Sydney.

Lend Lease yesterday said net profit fell 3.8% to $217.8 million in the six months to December 31, from $226.5 million in the previous corresponding period.

The group blamed the fall partly on negative property investment revaluations of $3.0 million after tax.

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Investors shrugged off the lower payout and marked the shares up 2c at $7.31.

Chief executive Steve McCann said earnings in the 2012 financial year were expected to see continued accretion from the group's infrastructure business.

However, the group was cautious about the medium-term outlook given the uncertainty in global markets resulting from the debt crisis facing Europe and the potential impact that could have on funding availability and project timings, he said.

The Group has clear priorities and is focused on the delivery of its major projects, integrating the infrastructure business into the Australian region, optimising its portfolio mix and positioning the Group's offshore businesses for market recovery.

"During the six months ended 31 December 2011, the Group made significant progress implementing its strategy including the commencement of construction at Barangaroo South in Sydney and RNA Showgrounds in Brisbane, and the integration of the infrastructure business in Australia.

"In addition, the Group realised over A$780 million cash from recycling major assets, including the sale of King of Prussia, which will be reinvested in the Group's significant pipeline", said Mr McCann.

"In Australia, the engineering construction market remains attractive and Lend Lease has a strong internal pipeline which will help offset the low levels of activity in the non-residential building sector," Mr McCann said in a statement on Monday.

"Consumer sentiment continues to negatively impact the residential market in Australia with lengthening of time between inquiry and conversion."

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