Lendlease’s new CEO Tony Lombardo (pictured above) is undertaking a wide-ranging review of the business after informing the ASX that COVID-19 is having an ongoing impact on its core operations, particularly in the UK.
Will retirement villages be in their review mix? We believe not, apart from close scrutiny of their sales targets.
Here in Australia, Lendlease sealed its commitment to villages when it brought on Aware Super as a 25% purchaser of its retirement village business just in February. This followed its sale of 25% to Dutch pension fund APG in 2017. Lendlease would not want to be seen as bailing on these significant institutional investors.
Tony Lombardo also has a strong connection to the retirement business. He was a leader in Lendlease buying the Babcock & Brown stable of villages of 56 villages and 29 aged care facilities for around $300M in Dec 2008. (They sold the aged care homes in 2013 to Allity for $270M, basically delivering the 56 villages for $0).
Most recently, Lombardo has led Lendlease’s strategy to become a major force in retirement villages in China, launching in 2018 a 900 home village project outside of Shanghai. Lombardo stated last year they want 5,000 village homes within five years in China.
Here in Australia, Lendlease, which we reported last month, has joined forces with UnitingCare Queensland’s Blue Care to develop and operate an integrated village and aged care community in Noosa. This is in addition to a partnership Lendlease now has with Catholic Healthcare to build villages and co-located aged care.
Lombardo told investors this week he expects profit for the financial year to be in the range of $375 million to $410 million after tax, compared to the previous market consensus of $460 million.
Mr Lombardo, who replaced the long-serving CEO Steve McCann last month, is to assess the ongoing impacts of the global pandemic and implement a restructure to simplify operations.
Lendlease said in an ASX statement that a range of actions have been taken to help Lendlease navigate this environment, the unpredictability of the pandemic has meant many global cities have been forced into extended lockdowns or re-entered lockdowns during the past financial year, delaying projects.
The global pandemic and city lockdowns halted work across its office, retail and residential projects. Its statutory profit of $196 million fell 37% for the six months to December 2020.