Highlights

  • Lendlease reported AUD 233 million of operating profit from its continuing investment, development and construction businesses.
  • The group contracted or completed AUD 3.4 billion of Capital Release Unit transactions during its restructuring.
  • Construction Backlog increased 42% to AUD 8.4 billion as the Business secured new project work.
  • Management provided FY27 core Earnings guidance while targeting further asset releases and lower underlying gearing.

The latest Lendlease result contains two distinct financial pictures. Lendlease Group (ASX:LLC) reported a FY26 statutory loss following charges and losses in Assets designated for release, while its continuing investment, development and construction businesses generated operating profit. The balance between capital recycling, project delivery and Debt reduction is now central to the group’s FY27 plans.

Two Operating Streams Shape FY26

Lendlease's FY26 results, released on 17 August 2026, showed two very different stories. The continuing platform, which the company calls IDC (Investments, Development and Construction), generated operating profit after tax of $233 million and operating earnings per security of 33.7 cents.

The Capital Release Unit (CRU), which holds assets earmarked for sale, recorded an operating loss of $800 million. That included about $340 million of impairments and $92 million of provisions at the segment level, in the reported results. Combined, the group posted an operating loss after tax of $567 million.

This matters because the market is essentially judging whether the CRU drag is finite. Management has contracted or completed $3.4 billion of CRU transactions, leaving about $2.5 billion of invested capital to release on a pro forma basis. The distribution of 15.7 cents per security was paid from the trust only, with no company dividend.

Investment, Development and Construction Activity

Lendlease is an Australian-listed international property and infrastructure group. It earns money through three main engines. Investments manages property funds and takes co-investment stakes, with funds under management of $43.9 billion and segment EBITDA of $297 million.

Development creates and sells projects, mainly in Australia, and reported EBITDA of $78 million with a return on invested capital of 3.0%. Construction delivers buildings and infrastructure for third parties, generating Revenue of $3,869 million and EBITDA of $167 million, a Margin of 4.3%.

Debt Reduction Remains a Priority

The Australian development pipeline grew to $13.2 billion from $9.8 billion, helped by $4.7 billion of newly secured projects. In Investments, the company reported $2.4 billion of raised and committed capital, while divesting $7.2 billion of assets during the year.

Cost reduction also featured. Net overheads fell 22% to $363 million from $466 million, with an exit run-rate target of roughly $350 million.

Leadership, Guidance and Next Decisions

Statutory net debt was $3.7 billion, about $0.4 billion higher than at the half-year. Statutory gearing was 30.3%, while underlying gearing was 37.7%, or 30.2% pro forma for contracted transactions. Lendlease's stated target is 15% underlying gearing, so the deleveraging task is still large.

Liquidity stood at $4.0 billion, including $0.8 billion of cash. Moody's rates the group Baa3 and Fitch BBB-, both with stable outlooks, which is Investment grade but at the lower end.

Lendlease operates in sectors that have faced higher funding costs, construction cost pressure and uneven transaction markets in recent years. Its competitors range from large builders and diversified developers to institutional fund managers, and its position rests on scale, long-standing client relationships and a funds management platform that earns fees.