Bovis is 'reaping dividends' of shake-up while Australian parent suffers 'painful' losses in the USA.
Bovis Lend Lease has announced a pre-tax operating profit of £86.1m for the 12 months to 30 June, 14.5% higher than the previous year. Its turnover stood at £3.5bn compared with £4.2bn in 2002.

John Spanswick, the chief executive of Lend Lease in Europe, the Middle East and Africa, attributed Bovis' profit increase to a restructuring carried out earlier in the year.

Spanswick said: "It was a year of transition, during which we reorganised our management and laid the foundations for future growth. We have repositioned the business, targeting key growth sectors, and adjusted the scope of our operations to match the opportunities in the marketplace."

He added: "Our real estate investment business in the UK is now clearly focused on the retail sector, bringing together our investment management skills and our retail development expertise."

The contractor performed well in the European market, where pre-tax operating profit rose from £26.8m last year to £34.5m this year.

Bovis added that it had a 40% share in the £2.5bn London commercial market.

The company's Australian parent, developer Lend Lease, fared less well. Its consolidated accounts revealed a £234.7m pre-tax loss for the year. However, this included a £391.2m write-down of its Real Estate Investments business in the USA, Asia and Europe earlier this year.

Greg Clarke, Lend Lease's chief executive, admitted that the write-down had hurt the business. He said: "The decision to exit the REI business in an orderly way has certainly been expensive and painful, but it has been the right thing to do."

Despite the problems, Clarke insisted that the group was in a strong financial position. Lend Lease's net debt stands at just £7.2m and, as of 30 June, the company had £359m available in cash. Clarke added that £311m in cash should be raised once Lend Lease has left the US real estate market.

He said the company's post-tax profit next year should be between £99.4m and £103.5m, up at least £4m on the 2003 results.

  • Earlier this month, Lend Lease announced that Robert Tsenin, its finance director, will retire from the board on 31 August.

    Tsenin will be succeeded by Joanne Curin on 8 September.