Lendlease calls in new finance chief as analyst tips earnings shift
Lendlease could look for a new earnings mix under incoming chief Tony Lombardo.
Global construction and development major Lendlease has tapped property executive Simon Dixon as its new chief financial officer in a further shake up of its management ranks.
The move comes amid speculation about the company’s direction under incoming chief Tony Lombardo, who starts next month, with preparations underway after he moved back to Sydney from his role running the Asian unit.
The group‘s chief executive Steve McCann is leaving at month end and will head Crown Resorts as its fields multiple take over offers.
Mr Dixon will start October and the acting CFO, Frank Krile, will become chief risk officer. Asia-based Mr Dixon is currently CFO and board member of Hongkong Land, the $US11bn London and Singapore listed property investment, management and development group, having held this position since 2016.
Hongkong Land is part of the $US46bn London-listed Jardine Matheson Group. A chartered accountant with more than 25 years of experience in large and organisations in Australia, Europe and Asia, Mr Dixon has skills in finance, accounting, investments, strategy and transformation and was also a PricewaterhouseCoopers partner.
Mr Lombardo said the new CFO was a “proven leader who has led teams across three of Lendlease’s four regions – Australia, Asia and Europe”.
“His extensive experience and proven capabilities will be invaluable to Lendlease as we execute on our $110 billion global development pipeline and look to significantly grow funds under management,” he said.
UBS analysts Tom Bodor and Grant McCasker said that despite its leverage to a vaccine led recovery, Lendlease has underperformed the market, even after a strategy reset.
“While investors see significant earnings potential in the $100bn-plus development pipeline, confidence is low as evidenced by the current wide range of consensus estimates,” they said.
“In our view, incoming CEO Tony Lombardo is likely to rebase fiscal 2021 earnings expectations lower, while talking positively about ”medium term” growth potential from doubling production to $8bn per annum,” they said.
UBS suggested other key strategic moves were likely to focus on the structure of key executive roles, on costs and funds growth.
Lendlease is under pressure to hit a number of hurdles this year from analysts including winning a pre-commitment or selling down part of its Melbourne Quarter complex or making similar moves in Europe.
But they see the TRX development in Malaysia, bringing more build to rent investors into projects and a come back for land estates as the main drivers.
The company will also benefit from the massive precinct is it developing for Google in the US and hot luxury sales at Sydney’s harbourside Barangaroo precinct.
“In our view Tony will initially focus on a possible shift to align profit more closely with cash which may defer earnings but improve the growth/multiple,” they said.
The company will also benefit from the coming sale of its services unit that could go for up to $400m and if it picks up parts the AMP Capital real estate business.
UBS said both the communities and military housing units may also be reviewed.
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