Property company Lend Lease Corporation Ltd says the market is showing signs of bottoming out after it revised its full-year net operating profit downwards on Monday.
“Australia is in a better position than the UK and the US and is unlikely to get much worse,” chief executive Steve McCann told AAP.
“[The UK] is still obviously struggling, the market broadly is still tougher overseas but there are signs that it’s bottoming out, so we’re seeing a little bit of a pick-up in sales in our residential business.
“So there are some positive signs emerging.”
Australia’s biggest property stgeloper said it did not believe it was appropriate to sell certain assets, including some equity investments in public-to-private partnership projects in the UK this financial year
As a result, the company revised guidance (after the removal of these items and other adjustments) for the year ending June 30 2009 to a net operating profit after tax of about $300 million.
“We announced in February in our half-year result that our earnings for the full year ends June 30 had about a 30 per cent capital recycling component that was uncertain. What we are announcing today is actually entirely consistent with that,” Mr McCann said.
“We are not going to sell those assets before June 30 but it hasn’t resulted in a 30 per cent reduction, we’re going to come out at about $300 million net operating profit after tax, so we’ve done a little bit better than 30 per cent off.”
Mr McCann said the company was being cautious during these difficult economic conditions.
“We’ve got a very strong balance sheet, we’ve only got about $300 million of net debt and we’re well down the track in terms of resizing our overhead cost base,” he said.
“We’re pretty strongly positioned and we’re cautious but confident that we’ll come out of this cycle in a pretty strong place.”
At 1116 AEST, Lend Lease shares were down 33 cents, or 4.37 per cent, at $7.23.