New Lend Lease CEO Greg Clarke this week announced plans to cut management jobs and reduce overheads in the wake of the company’s largest ever half-year loss.
The Australian owner of Bovis Lend Lease also revealed that Clarke’s predecessor, David Higgins, netted a A$6.7m (£2.5m) severance payment following his departure last year.
Lend Lease posted a A$369.4m (£138m) net loss for the six months to 31 December, compared with a A$126.4m (£47.2m) profit for the same period a year ago. Revenues fell 15% to A$5.3bn (£1.98bn).
Former Cable & Wireless boss Clarke said the group had a management structure “suited to a business two or three times its size”. “In the coming months, we will eliminate the duplication that built up in the company under the previous global business structure,” he said.
Clarke declined to put a figure on estimated savings, but said details would be made public over the next few months.
The company also announced plans to sell non-core assets and return capital to shareholders, with an eventual buyback of up to 10% of its shares.
Lend Lease’s results were marred by a A$482.5m (£180.2m) writedown of the value of its US Real Estate Investments business. Clarke said the group had not reached a conclusion in its long-running review of US REI, which is expected to be sold off, but news would emerge over the next few months.
“There may be an expectation in the market of some type of one-off announcement; however, we are far more likely to be making a series of announcements as different parts of the review are finally determined,” he said.
Earlier this month, three senior managers from US REI were sacked, including chief executive Fred Pratt.
Lend Lease’s Real Estate Solutions arm fared better, with increased earnings and forward orders from construction business Bovis Lend Lease.
And the European REI business reported that after-tax profits were up 3.7% to A$22.5m (£8.4m).
