Lendlease has blamed substantial restructuring costs, as it posted a £700m-plus financial loss across its global operations.
The Australian contractor also revealed that its remediation provision for building-safety work in the UK had surged to A$365m (£188.9m) – a jump of nearly A$50m (£25.9m) in a year.
Lendlease’s operating pre-tax loss came in at A$1.4bn (£719.2m) in the year to 30 June 2024 – a big increase on the A$238m (£123.2m) loss recorded in the previous year.
Company chair Michael Ullmer said this was due to the cost of implementing a new business strategy, and “largely relat[ed] to impairment and restructuring charges”.
He added that it was “imperative we make these changes to set Lendlease up for future success”.
The firm’s turnover also fell, to A$9.2bn (£4.8bn), having been A$10.2bn (£5.3bn) the year before.
The contractor revealed that the A$365m provision for building-safety remediation would cover 60 buildings across the UK.
It expects to spend A$138m (£71.5m) of that in the coming year, with the rest paid out in the following five and a half years. Most of the buildings in question were built by Crosby, which Lendlease acquired in 2005 to enter the UK residential market.
“Notably, many of these buildings were completed or had commenced construction prior to Lendlease’s acquisition,” Lendlease said in its accounts, adding that it no longer owned any of the buildings.
“Each building completed by a Lendlease entity was certified as complying with applicable building regulations at the time of its completion.”
Over the course of the year, Lendlease also reached a settlement with one third-party contractor regarding the “recovery of costs in relation to a number of buildings included in the provision”.
“The settlement payment in relation to these buildings was received in June 2024,” it added.
“Lendlease is actively working to maximise third-party recoveries [but] expects this process will be over an extended period of time.”
The firm also gave an update on plans to withdraw from the construction market in the UK, US and Asia, as announced in May. Lendlease said it was in the “early stages” of preparing the business for sale in the UK, but that it had made “significant progress” in Asia. In particular, it has formed a life sciences joint venture with private equity firm Warburg Pincus, which its construction workforce will transfer to.
Meanwhile, the company confirmed that it recently agreed terms to sell its east coast operations in the US.
