Lendlease Delivers a Better Second Half; We Slightly Increase Fair Value Estimate to AUD 15.60

After a disappointing first half, no-moat rated Lendlease recovered some form in the second half. Net profit after tax of AUD 467 million for the full fiscal year translated to earnings per security of 82.4 cents and a distribution of 42 cents, slightly ahead of our expectations. We increase our fair value estimate slightly to AUD 15.60, given reduced uncertainty around the group’s volatile engineering business and some revenue being delivered in the fiscal 2019 year that we previously expected in later years. After the security jumped sharply following results, the name screens as roughly fairly valued.