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LENDLEASE GROUP — AGM Information 2007
Nov 14, 2007
65243_rns_2007-11-14_de6a23af-a692-4dea-a94b-351b397d2409.pdf
AGM Information
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15 November 2007
The Manager The Manager Companies Section Companies Section Australian Stock Exchange Limited New Zealand Stock Exchange Limited
Pages: Twenty-eight (28) pages
Dear Sir
Stock Exchange Announcement
Managing Director’s Address
In accordance with Listing Rule 3.13.3, I enclose a copy of the Managing Director’s Address to be delivered at the Annual General Meeting to be held at Dockside, Cockle Bay Wharf, Sydney on Thursday 15 November 2007 commencing at 10.00 am.
Yours faithfully LEND LEASE CORPORATION LIMITED
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S J SHARPE Company Secretary
Lend Lease Corporation Limited Telephone +612 9236 6111 ABN 32 000 226 228 Facsimile +612 9252 2192 Level 4, 30 The Bond www.lendlease.com 30 Hickson Road Millers Point NSW 2000 Australia
2007 Annual General Meeting
Speech by Greg Clarke
Managing Director and Chief Executive Officer
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Thank you, David, and good morning, ladies and gentlemen.
We are indeed performing well.
Over each of the past three years, Lend Lease has outperformed management’s stated earnings objectives.
But more importantly, as the Chairman has said, we can have confidence in the future because the Company has a clear strategy for ongoing growth.
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I thought it would be good to commence my report to you today with this slide.
It shows the diversity of operations under the Lend Lease brand today; their competitive positioning in each of our markets; and the backlog – which is the source or estimated level of future profits from projects under our control.
Our strategy is to operate these businesses as a diversified portfolio, delivering a cumulative return on equity of at least 15% per annum.
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The geographic and sector diversification that has been achieved across the Group’s core businesses helps to reduce volatility of earnings at the Group level.
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Longer Term Earnings Visibility
Retail Development Secured Potential
Privatisation – Actus Development & Construction Facilities Management & Redevelopment
Australian Communities Long term pipeline – zoned / unzoned
US Communities Lowry Range / Horizon City / Potential acquisition
UK Communities Crosby Stratford City / Elephant & Castle / Preston / Stockport
Investment Management−Investment Annuity style earnings
Bovis Secured Unsecured externalInternal & PFI
2007 2010 2015 2020
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The other aspect of our future earnings that I want to point out is their visibility and long term nature.
We have a very good base of secured, major projects in Asia Pacific; the UK; Europe; the Middle East; and the USA, which will deliver profits out to 2020.
This slide graphically depicts the source and type of earnings we will be delivering across the portfolio.
In Retail for example, we have a pipeline of secured development and redevelopment projects in the UK, Singapore and Australia that will provide development earnings out to 2015.
In Australia, Delfin Lend Lease has a backlog of masterplanned community projects that will be progressively developed over the next 15 years. We have secured the first two similar projects in the US as we build our Communities business there.
Investment Management provides more regular annuity style earnings from funds management fees - year in, year out. Bovis Lend Lease has a shorter secured earnings outlook because it is a construction business. However, it has good visibility of future contracts arising from the Lend Lease development pipeline and its external client base.
The Group’s businesses are operating in an increasingly integrated way. From any one project where we invest shareholder capital, we can extract multiple returns such as development, construction, financing, and funds and asset management fees.
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In May this year, we set up a new Executive Office to match the evolution of Lend Lease into a much more integrated business than it has been in the past.
The Executive Office team comprises Ross Taylor as Chief Operating Officer; Steve McCann, Finance Director and CEO Investment Management, and myself.
This structure brings the three most senior executives closer together to ensure that decision making on capital allocation and oversight of synergy opportunities across the core operations is tightly controlled.
We are supported by a highly experienced and talented senior management team across the three core businesses. More than half of the senior executive team are long term Lend Lease employees and the remainder have been recruited from senior positions in the property industry around the world.
The management team established two new business initiatives during the year. One, Lend Lease Ventures, is looking for sustainability based growth businesses. The other is investigating opportunities for our business model in a fifth geography such as Japan, China or India.
So with those opening remarks about how well the Group is positioned today for the future, let me provide you with a more detailed look at how we performed for the year to June 2007.
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Group Performance Summary After Tax
June 2007 June 2006 % change
A$m A$m
Retail & Communities 183.4 167.5 9%
Project Management, Construction & PFI 57.6 134.6 (57%)
Investment Management 262.8 129.5 103%
Operating Businesses 503.8 431.6 17%
Group Services & Amortisation (63.0) (55.0) 14%
Group Treasury 5.1 (22.4) n/m
Net Operating Profit 445.9 354.2 26%
Property Investment Revaluations 51.6 61.0 (15%)
Statutory Profit 497.5 415.2 20%
Net Operating Profit excluding ATO interest 413.7 354.2 17%
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David has already given you the statutory and net operating profit numbers.
However it is worth noting one or two points within the profit report.
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Firstly, the $32 million after tax payment from the Australian Tax Office explains the major movement in the Group Treasury line from 2006 to 2007.
Secondly, because of the AIFRS Accounting Standards, the nearly $52 million after tax in unrealised property revaluation gains does not fully reflect the valuation performance of all the Company’s property assets.
As you can see from the slide, excluding the ATO payment, the net operating profit for the year was still up by a healthy 17%. So a pretty strong result, well ahead of our target, despite the construction provision in the first half.
Let’s now turn to the core businesses, starting with Retail & Communities.
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Retail & Communities – Summary
A$m
200 12.6 183.4
180 167.5 (33.9) 38.9
160140 (1.7)
120
100
80
60
40
20
0
NPAT Retail LLc Aust LLc UK LLc US NPAT
June 2006 June 2007
Note: LLc refers to Lend Lease Communities
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Overall, Retail & Communities turned in good profit growth of 9%.
This was achieved with no major asset sales in the Retail business; more normalised trading from Crosby as the impact of the fair value adjustment works through; and a substantially increased contribution from Actus.
Pleasingly the Communities numbers were up 36% despite the tough residential market conditions in New South Wales.
David showed you this slide before.
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Region Retail Communities Privatisation
CentresNo. of DevelopmentValue Under Backlog No. Sales ValueBacklog Total Assets DevelopmentValue Under
UK
7 A$3.2b 14,720 A$13.0b 22 A$0.9b
America
1 - 15,881 A$2.3b 16 A$6.5b [(1)]
(42,400 homes)
Australia
11 A$1.4b 84,945 A$17.7b - -
Singapore
4 A$0.7b - - - -
Total 23 A$5.3b 115,546 A$33.0b 38 A$7.4b
(1) Projects awarded and projects that have not achieved financial close
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It shows the strength of the Group’s development project pipeline across the three sectors where we invest the Group’s capital – Retail; Communities and Privatisation.
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The 2007 financial year saw us substantially expand the pipeline adding 5 retail, 2 communities and 5 privatisation projects. That momentum has been maintained post balance date with our selection to undertake two of the UK’s highest profile urban regeneration projects to date:
-
The £1.5 billion regeneration of the Elephant & Castle district, in London; and
-
The £700 million town centre redevelopment at Preston, in the north of England.
I think the best way to report on the success of the Retail & Communities business is to run through some of the projects.
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Let’s start with the 2012 London Athletes’ Village and surrounding areas in Stratford. It showcases the scale and capabilities of our Communities operations.
Phase 1 involves the delivery of approximately 4,000 residential units to house the Olympic athletes. Phase 2, which is post the Olympics, involves the development of 500,000m[2 ] of community, retail and commercial areas surrounding the site.
Lend Lease is responsible for all aspects of the project including funding, design, construction, marketing and sale of completed dwellings, commercial and retail space. Total project development value over the two phases is around £5.5 billion.
This is a very exciting, very important and high profile project which will strengthen our brand reputation in the UK and generate multiple earnings opportunities for many years to come.
Lend Lease is focusing on these very big, complex and long term projects. Our integrated skill-set and business model give us a distinct competitive advantage where there are high barriers to entry for other players. These big projects are attractive to us as they provide the opportunity to secure long term earnings streams for our shareholders.
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Turning to a retail development case study.
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Mid City Centre in Sydney’s CBD was an off-market acquisition utilising Lend Lease’s integrated capabilities.
APPF Funds, which are managed by Lend Lease, acquired a 25% interest in both the retail and commercial components of the project.
APPF’s 75% interest Joint Venture partner is Fortius Funds Management.
The new Mid-City Centre will comprise 38,000m[2] of offices over 29 levels and 9,000m[2] of prime retail between Pitt and George Streets.
We expect to start before Christmas.
Property and development management will be carried out by Lend Lease Retail and the design and construction services are to be provided by Bovis Lend Lease.
The slide shows that through our integrated business model, we will achieve five streams of earnings from this project.
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The US$240 million Hickam Community Housing project is a great example of the Actus Lend Lease military housing operation in the US.
The project involves the renovation, construction and management of on-base family housing under a 50-year concession agreement for approximately 1,350 homes.
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Beyond the current family housing program, Actus has secured the first stage of the US$1.2 billion base hotel lodging program, and is well placed to participate in the yet to commence US$20 billion barracks program and Base Realignment and Closure program.
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Project Management, Construction & PFI – Summary
A$m
140 134.6 (110.5)
120
100
8060 30.8 6.6 (3.9) 57.6
40
20
0
NPAT June2006 UK/Europe Asia Pacific Americas PFI NPAT June2007
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Turning now to the Project Management and Construction operations, clearly the provision taken against some UK construction projects in the first half was disappointing.
However, we have taken a number of steps to address the problems that led to the provision. We are now comfortable with the program and outlook for the Manchester Hospitals project. The other UK projects on which losses had been incurred are now either complete, or well advanced.
Apart from the first half provision, the UK construction operations have continued to win good levels of new work. It will take time for the UK to return to more normal levels of profitability but that journey has definitely commenced.
We should not let the UK result for 2007 obscure the very good performances from the other three regional Bovis Lend Lease operations.
Asia Pacific turned in a particularly strong result and has continued a strong new work win rate since June with wins on major projects such as the $470 million redevelopment of Top Ryde shopping centre in Sydney; the $850 million redevelopment of Royal Children’s Hospital in Melbourne; and the $180 million redevelopment of Robina Town Centre on the Gold Coast.
In the US, the construction operations achieved a 20% increase in net profit in local currency and enjoyed particularly strong deal flow in healthcare and education projects.
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Strong Pipeline
` Region Value A$m FY2006 FY2007 FY2008 FY2009
Rouse Hill Town Centre Asia Pacific 415
Brisbane Airport Asia Pacific 287
Australian Taxation Office, Canberra Asia Pacific 245
Abbott Laboratories Asia Pacific 305
Mets Stadium (JV) Americas 350
St David’s 2, Cardiff Europe 700
Leeds Oncology Wing Europe 405
Sheffield Student Accommodation Europe 379
Lancashire Schools Europe 580
SLAM 2 Europe 779
ANZ@Docklands Asia Pacific 377
Lancashire Waste (JV) Europe 300
New York Path Station (JV) Americas 250
WTC Memorial Americas 600
Mulwala Asia Pacific 260
Mid City Centre, 420 George Street, Sydney Asia Pacific 260
Top Ryde Asia Pacific 450
Farleigh Post Office, New York Americas 1,350
Columbia University, New York Americas 1,250
Approx. construction values 9,542 Secured Preferred Position
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This slide shows a selection of the major projects in the strong pipeline of work for Bovis. The rate of new business wins remains strong – in fact all our markets across the globe are very strong.
Finally, let me take you through the Investment Management results and operations.
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Investment Management – Summary
A$m
300 114.7 262.8
250
200 18.6
150 129.5
100
50
0
NPAT June 2006 Funds Investments NPAT June 2007
Management
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This was an outstanding contributor to the Group profit with a nearly 100% increase in profit after tax over the previous year.
We reaped the rewards of holding on to the Group’s investment in the Global Fund rather than selling it when we exited the US REI operations back in 2003 and 2004. We also generated a profit on the sale of a now non-core funds management joint venture in Europe.
Underlying profit from Investment Management is also strong, as is growth in funds under management.
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Growth in Funds Under Management
A$b Core business FUM increased by 27% during the year
14
12 9.7 1.3 (0.1) 0.7 (1.1) 10.5
10 1.6
8 2.7
6
4 7.0 8.9
2
0
June 2006 Additions Disposals Revaluations JV Interests June 2007
Core FUM FUM including JV interests
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This slide is particularly pleasing. Our core funds under management increased by 27%, represented by the blue bar. This excludes our JV interests in Generali and Resolution Capital, both of which were noncore and have been sold.
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The growth was driven by strong new funds flow and a number of acquisitions – primarily by Australian Prime Property Fund.
The Investment Management business is clearly contributing to our integrated model.
A great example of this is the Asian Retail Investment Fund, or ARIF, as it is known.
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We launched ARIF in December 2006 and completed our second close in May 2007 with S$700 million in total equity commitments. The fund will target a 15% geared IRR from retail and mixed-use assets, primarily in Singapore. ARIF also has the capacity to invest in Malaysia, Thailand and Taiwan.
ARIF has about $2.4 billion of investment capacity. Its first asset will be Somerset Central, a prime site on Orchard Road where we are developing a 30,000m[2] shopping centre. Lend Lease will hold a 25% direct interest in the asset and a 10% interest in the ARIF fund, which will own the remaining 75%.
Again, in line with the strategy I explained at the outset, Lend Lease will manage all phases of Somerset Central – development, leasing, project management and construction and on completion, asset and property management services and funds management.
Construction is underway, leasing will start later this year and we are targeting completion by Christmas 2009.
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Ladies and gentlemen, the business performed well in 2007. I hope that the projects that I have introduced you to today give you a good
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understanding of how we are maximising earnings for shareholders through our diversified, but increasingly integrated businesses.
I want to conclude my operations review today with a quick check against our stated financial performance parameters.
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Disciplined Capital Management Model
EPS growth � Targeting 10% p.a. average
growth over 5-year period FY07 Performance
EPS growth 26% �
Debt ratios �� Gearing (Debt to TTA)Interest cover�� Target 30-40%EBITDA > 6x MANAGEMENT OBJECTIVESStrong TSR Dividend policy � 60-80% payout ratio Dividend payout ratioGearing Interest cover [(1)] 15.6%69%7.9x ��
Investment grade credit ROE 15.7% �
rating Annuity earnings as a % of EBITDA 23% �
Capital returns � ROE > 15% p.a. averageover 5-year period Recurring / annuity style earnings � Minimum 15-20% of EBITDA (1) Gross Debt (including other financial liabilities / total tangible assets)
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We introduced you to our “pentagon” of management’s key financial performance measures last year.
By ensuring that Lend Lease capital is actively managed so that the five parameters are achieved each year, we believe we will deliver consistently, strong total shareholder returns, while maintaining an investment grade credit rating to help minimise our cost of capital.
The pentagon also provides shareholders with a clear set of measures on which to judge the Company’s strategic decisions, use of your capital and management performance.
How did we go in FY 2007?
26% growth in earnings per share compared to targeted average 10% p.a. growth over five years.
Annuity style income was 23% of EBITDA compared to our minimum target of 15-20%.
The dividend payout and return on equity were both on target and while our gearing was lower than we want, our business plan for the next three years will see us move into the target range.
Overall we think that is a very good score, and the result suggests to us that the parameters are the right ones to be working within.
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The Company has made a great deal of progress towards its ultimate objective of maximising, long term growth in shareholder value over this last year.
That of course is a never-ending challenge. However, I believe shareholders have good grounds to be confident about the outlook for Lend Lease.
Our proven ability to leverage the full range of earnings opportunities across the property value chain augurs well for continuing growth over the short to medium term.
We have a strong balance sheet to fund our quality development pipeline. Construction profit backlog is at record levels. Lend Lease managed property funds continue to deliver competitive returns, which in turn is attracting equity to those funds.
Lend Lease is indeed an opportunity rich company. We have a lot of work to do to execute our strategy over the next four or five years. We are well placed to do just that and we believe we will turn today’s significantly improved performance into superior performance for our shareholders.
In pursuing that objective, I equally subscribe to the importance of achieving our goals to become an Incident and Injury Free and truly sustainable organisation. We cannot pursue growth in value for shareholders at the expense of the safety and well-being of any employee. Nor will we maintain growth in the long term if we don’t understand and care about the impact our activities have on the environment and societies in which we operate.
Finally in closing my report to you, I extend a big vote of thanks and appreciation to my colleagues on the senior management team and to all employees for their commitment and their many outstanding achievements which have combined to deliver a very good result for the owners of Lend Lease.
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2007 Annual General Meeting Greg Clarke Group CEO
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Business
Retail & Communities
Investment Management
Competitive Positioning
Backlog Retail Development Pipeline – A$5.3b Communities – 115,000 lots under management (A$33b sales value) Military Housing – 42,400 units under management (Value under development A$7.4b)
Retail Development Pipeline – A$5.3b Integrated capability in retail Communities – 115,000 lots under 15-year residential backlog in Australia management (A$33b sales value) Growing backlog in US & UK Military Housing – 42,400 units under Actus leading player in military housing management (Value under development sector A$7.4b) Building backlog in US A$8.9b funds under management Largest wholesale fund in Australia Established funds in Australia, UK and Outstanding performance record Singapore Primarily retail assets Coverage across all ends of risk spectrum Strong pipeline of internal assets for funds
Project Management, Backlog GPM of A$793m Top 4 player in UK Construction & PFI A$500m of GPM secured Top 3 player East Coast US Equity of £94.2m in PFI stakes Leader in chosen sectors in Australia
Retail Development Secured Potential Privatisation – Actus Development & Construction Facilities Management & Redevelopment Australian Communities Long term pipeline – zoned / unzoned US Communities Lowry Range / Horizon City / Potential acquisition UK Communities Crosby Stratford City / Elephant & Castle / Preston / Stockport Investment Management Annuity style earnings −Investment Unsecured external Bovis Secured Internal & PFI 2007 2010 2015 2020
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Corporate Centre
Communications
Greg Clarke
Chief Executive Officer Group Finance
Human Resources
Incident & Injury Free
Executive Office Information Technology
Legal
Risk
Strategy/M&A
Ross Taylor Steve McCann
Sustainability
Chief Operating Officer CEO – Investment Finance
Management Director
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Senior Operational Management
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Bovis Lend Lease
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Mark Menhinnitt
CEO −Project
Management
& Construction
Pete Marchetto Sergio Casari Murray Coleman Mark Fletcher
Americas Asia Pacific UK Continental
Europe &
Middle East
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Retail & Communities
Nigel Hugill Mike Bellaman David Hutton Rod Fehring
UK US Asia Pacific New
Opportunities
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Investment Management
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Anthony Pascoe Rob Hattersley
Chief Operating Chief Investment
Officer Officer
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| Group Performance Summary After Net Operating Profit excluding ATO interest Statutory Profit Net Operating Profit Property Investment Revaluations Operating Businesses Group Services & Amortisation Group Treasury Retail & Communities Project Management, Construction & PFI Investment Management |
Tax 17% 354.2 413.7 20% 415.2 497.5 26% (15%) 354.2 61.0 445.9 51.6 17% 14% n/m 431.6 (55.0) (22.4) 503.8 (63.0) 5.1 9% (57%) 103% 167.5 134.6 129.5 183.4 57.6 262.8 % change June 2006 A$m June 2007 A$m |
|---|---|
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Retail & Communities – Summary
A$m
200 12.6 183.4
38.9
167.5 (33.9)
180
160
(1.7)
140
120
100
80
60
40
20
0
NPAT Retail LLc Aust LLc UK LLc US NPAT
June 2006 June 2007
Note: LLc refers to Lend Lease Communities
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| A$7.4b 38 A$33.0b 115,546 A$5.3b 23 Total - - - - A$0.7b 4 Singapore - - A$17.7b 84,945 A$1.4b 11 Australia A$6.5b(1) 16 (42,400 homes) A$2.3b 15,881 - 1 America A$0.9b 22 A$13.0b 14,720 A$3.2b 7 UK Value Under Development Total Assets Backlog Sales Value Backlog No. Value Under Development No. of Centres Privatisation Communities Retail Region |
A$7.4b 38 A$33.0b 115,546 A$5.3b 23 Total - - - - A$0.7b 4 Singapore - - A$17.7b 84,945 A$1.4b 11 Australia A$6.5b(1) 16 (42,400 homes) A$2.3b 15,881 - 1 America A$0.9b 22 A$13.0b 14,720 A$3.2b 7 UK Value Under Development Total Assets Backlog Sales Value Backlog No. Value Under Development No. of Centres Privatisation Communities Retail Region |
A$7.4b 38 A$33.0b 115,546 A$5.3b 23 Total - - - - A$0.7b 4 Singapore - - A$17.7b 84,945 A$1.4b 11 Australia A$6.5b(1) 16 (42,400 homes) A$2.3b 15,881 - 1 America A$0.9b 22 A$13.0b 14,720 A$3.2b 7 UK Value Under Development Total Assets Backlog Sales Value Backlog No. Value Under Development No. of Centres Privatisation Communities Retail Region |
|---|---|---|
| Communities | Privatisation | |
| Backlog Sales Value Backlog No. |
Value Under Development Total Assets |
|
| A$13.0b 14,720 |
A$0.9b 22 |
|
| A$2.3b 15,881 |
A$6.5b(1) 16 (42,400 homes) |
|
| A$17.7b 84,945 |
- - |
|
| - - |
- - |
|
| A$33.0b 115,546 |
A$7.4b 38 |
(1) Projects awarded and projects that have not achieved financial close
Project:
Stratford City
Location:
5 miles from Central London
Proposed development:
-
Phase 1 – Athletes Village – London 2012 Olympics
-
Circa 4,000 residential lots
-
Substantial affordable housing component
-
Phase 2 – rights post 2012 � Draw down land as required
-
Residential / commercial
Total project value: £5.5b Timeline: Phase 1 – commencement 2008 Services provided Preferred development partner – by Lend Lease: lead developer
Centre:
Location:
Area:
Redevelopment:
Owners:
Services provided by Lend Lease:
Lend Lease ownership interest:
Mid City Centre (Sydney CBD) New South Wales
� Proposed Commercial 34,000m[2 ] NLA � Proposed Retail 9,000m[2 ] NLA � September 2007 −2010 � A$750m
� APPF Retail & Commercial Funds 25% � Fortius Funds Management 75% � Asset management � Development management � Property management � Project management � Design & construction
Via APPF Retail & Commercial Funds
Project: Hickam Community Housing Phases I & II Location: Hawaii Units under Phase I – 1,356 management: Phase II – 1,118 Concession term: To 2055 � Services provided by Development management Actus Lend Lease: � Design & construction � Asset management Invested equity: Phase I – US$16m Phase II – US$25m
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Project Management, Construction & PFI – Summary
A$m
134.6 (110.5)
140
120
100
80
6.6 (3.9)
57.6
30.8
60
40
20
0
NPAT June UK/Europe Asia Pacific Americas PFI NPAT June
2006 2007
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||Region<br>Strong Pipeline|**Region**<br>
Strong Pipeline|Value A$m|FY2006|FY2007|FY2007|Preferred Position
FY2008
FY2009|Preferred Position
FY2008
FY2009|Preferred Position
FY2008
FY2009|
|---|---|---|---|---|---|---|---|---|---|
||Rouse Hill Town Centre|Asia Pacific|415|||||||
||Brisbane Airport|Asia Pacific|287|||||||
||Australian Taxation Office, Canberra|Asia Pacific|245|||||||
||Abbott Laboratories|Asia Pacific|305|||||||
||Mets Stadium (JV)|Americas|350|||||||
||St David’s 2, Cardiff|Europe|700|||||||
||Leeds Oncology Wing|Europe|405|||||||
||Sheffield Student Accommodation|Europe|379|||||||
||Lancashire Schools|Europe|580|||||||
||SLAM 2|Europe|779|||||||
||ANZ@Docklands|Asia Pacific|377|||||||
||Lancashire Waste (JV)|Europe|300|||||||
||New York Path Station (JV)|Americas|250|||||||
||WTC Memorial|Americas|600|||||||
||Mulwala|Asia Pacific|260|||||||
||Mid CityCentre, 420 George Street, Sydney|Asia Pacific|260|||||||
||Top Ryde|Asia Pacific|450|||||||
||Farleigh Post Office, New York|Americas|1,350|||||||
||Columbia University, New York|Americas|1,250|||||||
|| Approx. construction values||9,542||Secured||Preferred Position|||
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Investment Management – Summary
A$m
300 114.7 262.8
250
200
18.6
129.5
150
100
50
0
NPAT June 2006 Funds Investments NPAT June 2007
Management
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Core business FUM increased by 27% during the year
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A$b
14
0.7 (1.1)
12 1.3 (0.1)
10.5
9.7
10 1.6
2.7
8
6
7.0 8.9
4
2
0
June 2006 Additions Disposals Revaluations JV Interests June 2007
Core FUM FUM including JV interests
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Fund: Asian Retail Investment Fund (ARIF)
Location:
Singapore
-
Equity raising: First close December 2006 – $375m
-
Second close May 2007 – S$325m
Target gearing:
-
60-80%
-
Capacity to invest in over S$3b of projects
Lend Lease co-investment: 10% Seed asset: Somerset Central (under development – completion 2010)
Somerset Central, Orchard Road Singapore
EPS growth
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�
Targeting 10% p.a. average
growth over 5-year period
FY07 Performance
EPS growth 26% �
Debt ratios Dividend policy Dividend payout ratio 69% �
� �
Gearing (Debt to TTA) 60-80%
� MANAGEMENT OBJECTIVES Gearing [(1)] 15.6%
Target 30-40% payout ratio
�
Interest cover
Strong TSR Interest cover 7.9x �
�
EBITDA > 6x
Investment grade credit ROE 15.7% �
rating
Annuity earnings as a
% of EBITDA 23% �
Capital returns Recurring / annuity
(1) Gross Debt (including other financial
�
ROE > 15% p.a. average style earnings
liabilities / total tangible assets)
�
over 5-year period Minimum 15-20%
of EBITDA
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