Lend Lease pegs profit at $485-$505m
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Nicholas Grove is a Morningstar journalist.
Lend Lease (LLC) on Monday said it expects to post an operating profit after tax for the year ended 30 June 2012 of between $485 million and $505 million, which compares to a profit of $499 million in the previous year.
The forecast is above both Morningstar and consensus estimates for a profit of around the $440-million mark.
The result excludes any profits from the Barangaroo South development in Sydney, the property and infrastructure group said.
Morningstar senior property analyst Tony Sherlock described the result as "a good performance, with profit around 10 per cent above our forecast".
Lend Lease chief executive Steve McCann said the earnings reflect the focused execution of the group strategy and successful integration of the infrastructure business in financial year 2012.
"The group has a clear strategy to achieve a balanced and diversified portfolio and to continue to recycle capital from property assets and non-core businesses to invest in higher-yielding opportunities," McCann said in a statement.
"We are very pleased with a strong expected result in such a difficult market environment."
In a note, City Index chief market analyst Peter Esho said he expects Lend Lease's announcement to please the market.
"The numbers stack up with market consensus of around $442 million, so the extent of the upward surprise is generally large, particularly in a market which is used to downgrades by now," he said.
"Construction is still a large part of the earnings pie and so the pipeline of future projects is key for ongoing earnings growth.
"There seems to be some good momentum in the stock at the moment. The market will just be watching earnings composition and any potential timing impacts over the next few years when results are announced at the upcoming reporting season."