Australian construction group Lendlease has announced plans to exit international markets in the next 18 months.
The move will allow the company to “recycle” US$3bn in capital by completing projects, selling assets and shedding 1,400 staff. The decision will also lower its cost base, creating $83m in pre-tax savings, debt reduction and returns for investors.
A press release from the company suggested that “overweight” projects that were not due to be completed until 2030 or after had hurt its performance. It added that the average international project undertaken between 2019 and 2023 had a margin of 0.6%.
Lendlease has a higher margin in Australia, which Tony Lombardo, the group’s chief executive, said was “less complex, more focused and fit for purpose”.
As part of the initiative, the group announced the sale of its eastern US construction operations to Consigli Construction.
Less than a year ago Lendlease announced a new chief executive for Europe and said it would lay off 10% of all staff.
The group will create a “Capital Release Unit” that will generate $1.85bn by the end of the 2025 financial year.
Michael Ullmer, Lendlease’s chairman, said: “We recognise that our security price performance and security holder returns have been poor as we have faced structural challenges and a prolonged market downturn.
“We have thought very carefully about the necessary strategic refocus and made some tough decisions.”
Lombardo added: We do not launch this strategy from a standing start. Significant work has already been undertaken and we anticipate making further positive announcements in the near-term on our progress.
“We are well advanced on several transactions, and we have clear plans of action to implement the necessary change to reorient the organisation.”
- Subscribe here to get stories about construction around the world in your inbox three times a week.
