Lendlease out with a fairly classic two-steps forward, one-step backward segment update.

Overall, good, in that the investments arm, where the margin is, proceeds apace. Construction at the lower end, fortunately, a small, mildly necessary part of the business. Development is the 1-step-back bit.

The goal for developers has, admittedly, switched from “grow earnings at a steady pace, from the COVID related lows of paused development” to one of survival.

Lendlease, in our view, will be amongst the “last rat standing”, and long run, will benefit as the competition exits.

The market reaction (share price today) is also somewhat telling. It “is” a downgrade, and LLC has had 3-4 of them by now. For the shares to not tank, and indeed to rise (at time of typing) means a) expectations are truly low, and even poor outcomes can hurdle them b) the investment news IS good news, c) the gearing comments are likely well regarded.

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