We have established a global pipeline of projects and built a substantial backlog as part of our strategy to establish a balanced and diversified portfolio. Our focus is now on the successful delivery of these projects, which will deliver earnings and drive growth over the next three years.

2013 has been another strong year for Lend Lease. During the year we repositioned our business, delivered strong financial results from our diversified businesses and increased our earnings visibility.

Repositioning of the business

Earlier in the year we restructured our Australia operations by separating into two businesses, Construction and Infrastructure and Property. Australia now accounts for more than two thirds of our earnings and the more focused structure delivers the support required given the significant scale of the operations. 

In some sectors in the second half of the year, we took the opportunity to further reposition our businesses in the United Kingdom, the Americas and Australia. This included the transition of our four separate construction operations of Abigroup, Baulderstone, Project Management & Construction and Infrastructure Services into three sector based businesses focused on building, engineering and construction services, which completed on 1 August 2013.

Diversified earnings

Our diversified platform continues to support the Group achieving our financial targets. The Group delivered an Operating Profit after Tax of $553 million, an earnings increase of nine per cent on the prior year. Our Development business was a key driver of the Group’s earnings, through the successful sale of our interests in the Greenwich Project in London and Jem^® in Singapore, as well as the first profits to emerge from Barangaroo South in Sydney. Other drivers included our Infrastructure Development business, which closed three large Public Private Partnership deals in Australia and one in America during the year, increasing their contribution to Group profit, and increased earnings from our Americas business.

Earnings visibility over the next three years

We have a significant pipeline across our business, with an estimated end value development pipeline of $37.4 billion, construction backlog revenue of $17.2 billion and funds under management of $15 billion. In 2014, we will commence the production of 11 apartment towers on sites in Australia and the United Kingdom already achieving pre-sales targets and expecting to deliver profits in fiscal years 2015 and 2016. 

Our integrated model – a competitive advantage

We have made considerable progress in delivering on our strategy in 2013. We have created a differentiated business through our integrated property model and have established our position as a leading international property and infrastructure Group. Our $6 billion Barangaroo South project in Sydney is a great example of our integrated model at work and is already delivering profits to the Group. 

Safety 

As the Chairman noted, safety is our number one priority. We take an uncompromising approach to achieving our goal of operating Incident & Injury Free. It is crucial all of our people have the right systems, support and information to deliver safe outcomes and positively influence our safety culture across the entire supply chain. This includes complying with our Global Minimum Requirements which prescribe physical and operational safety standards for all business activities. 

Our people

To create the best places we need the best people. We have made significant investment in focusing on the development and training of both our leaders and front line workforce. We want to ensure our people have the right skills to be able to deliver for today and the future. This year we continued to build upon the strength of our leadership team across our development, construction and investment management businesses with several senior appointments.

Outlook

Lend Lease is well positioned with a significant development and construction backlog, a strong balance sheet and access to third party capital to assist funding the delivery of the pipeline. Our focus now needs to be high quality execution of that pipeline. Our employees are committed to driving securityholders value by delivering the best places for our clients, investors, partners and communities.

Steve McCann
Group Chief Executive Officer and Managing Director