Lend Lease unveils buyback scheme
Lend Lease will ask shareholders to vote today on a proposal to buy back 25 per cent of the company's issued capital within 12 months, using $1.8 billion of the proceeds of the sale of MLC to the National Australia Bank (NAB).
Lend Lease will ask shareholders to vote today on a proposal to buy back 25 per cent of the company's issued capital within 12 months, using $1.8 billion of the proceeds of the sale of MLC to the National Australia Bank (NAB).
The move was announced by Lend Lease yesterday at the release of its annual profit figures which saw the group realise an annual bottom line profit of $3.54 billion.
This figure was comprised mainly of a staggering $3.11 billion net gain on the sale of its MLC financial services business to NAB.
Lend Lease says it is undergoing major structural transformations which will result in 75 per cent of its earnings derived from offshore and possibly the largest share buyback ever undertaken by an Australian business, according to announcements made at the annual results briefing.
Chief executive David Higgins says the company's "absolute profit figure" will more than likely drop because of the massive capital return to its shareholders.
Higgins’ refused to comment on whether the expected profit fall and the lower payout ratio meant reduced dividends for shareholders, saying only that it would depend on earnings per share.
“That target is impractical to give now because with the actual amount of shares on offer we won't know until the buyback is concluded."
Chief financial officer Robert Tsenin commented on the bottom line profit from a Lend Lease perspective saying the group was projecting a reduced availability of franking credits.
“More investments will be made offshore than in Australia and that will further tilt the availabil-ity of franking credits,” he says.
Tsenin says during a proposed transition period, Lend Lease will set out to reduce its payout ra-tio from the current 75 per cent figure, down to 50 per cent.
The report also stated Lend Lease posted good gains in its Project and Construction Management business, where net profit lifted to $56.3 million from $36.5 million previously.
Net profit from Real Estate Investments jumped to $151.6 million from $77.9 million.
Financial Services, IT&T Investments and Equity Investments all improved, collectively return-ing a net profit of $367.1 million, up from $260.5 million.
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