More problems in the engineering and contracting sector yesterday - RCR Tomlinson shares were suspended yesterday on fears about its earnings, while shareholders again sold off Lendlease shares for a second day.
Macquarie reviews the prospectus for the company's proposed Singaporean REIT, which is expected to diversify funding options. Macquarie would expect Lendlease to vend in stakes from assets in the urban regeneration pipeline as they are developed.
FY19 development results, up 18%, were ahead of UBS estimates while construction, down -29%, was worse. Importantly, the company has announced no further provisions in engineering & services, noting the sales process is progressing.
Morgan Stanley found the AGM update was a net positive with additional disclosure on underperforming Engineering projects, reconfirmation of projected sale proceeds and capacity to complete buyback all cited. But the analysts also acknowledge provisions for new engineering projects could temper re-rate with some investors fearing further losses from that one troubled division.