Neil Martin, Managing Director, Lendlease Construction, Europe, said:
“In 2014 we devised a strategy of being highly selective about the projects we were bidding for, targeting key sectors and markets where Lendlease is able to differentiate its offering to clients, focusing on quality and a client-led service. This year’s results demonstrate precisely the positive outcome of adopting this strategy. Our tight control on costs has led to further growth in gross profit for Lendlease’s Construction business. Our focus on profitability rather than revenue has led to further growth in gross profit for Lendlease’s Construction business.
“This strategy has, in addition to delivering a strong operational result, led to a doubling of our Construction business’s backlog and has generated an enviable amount of work at preferred bidder stage – all of which along with our strong balance sheet, continues to establish a strong platform for profitable, sustainable growth.
“Our recent focus to manage risk exposure across the portfolio means that a significant amount of our workload is now Construction Management. Achieving this balance between fee and risk work has been key to this year’s positive results. So, whilst revenue is down, the profit margin is up and this positions us strongly as we continue to deliver on the expanding pipeline.”
- Key projects completed successfully in the year have been Rathbone Square (a major mixed-use development in Central London); HMP Berwyn (a 2,100 inmate prison in North Wales); and The International Quarter London, Buildings 1&2 (part of a large scale commercial and residential development in Stratford).
- Key commencements in the year have been Google European HQ in Central London; Timberyard Deptford residential development, Plot 2; 1 Triton Square (an office refurbishment in Central London); further plots as part of the award-winning regeneration at Elephant Park; and Manchester New Square (a residential development in Manchester).
- Summary of the key figures: Gross Profit is up from £44.8m to £48.4m, on a revenue of £389m, that’s a gross margin percentage of 12.4%. We are reporting an industry leading EBITDA margin of 3.3% increasing from the prior year. All of which is in line with our strategy and along with our strong balance sheet reinforces our financial strength as a UK construction contractor.