SYDNEY (Reuters) - Australian property group Lend Lease (LLC.AX) on Monday estimated its full-year profit would be flat to 4 percent higher, beating market expectations for a fall, as it exits non-core businesses and moves away from lower-yield property assets.
Shares of Lend Lease surged 4.7 percent by midday, hitting their highest since mid-May on the announcement.
Lend Lease said in a statement to the stock exchange that its year to June 2012 operational profit after tax was expected at A$485 million to A$505 million ($491 million to $518 million).
That compares with a market estimate of A$443 million, according to Thomson Reuters I/B/E/S, and A$485 million a year ago.
“We view today’s announcement as a strong result,” Goldman Sachs said in a report on Monday.
“The strength of the announcement is chiefly due to the fact that LLC management does not normally provide earnings guidance,” said the brokerage firm, adding that it was reviewing its earnings estimates and price target for Lend Lease.
Lend Lease also said the forecast does not include any profits from Barangaroo South, its A$6 billion waterfront project in Sydney.
The company last month said it had secured two major tenants, Westpac Banking Corporation (WBC.AX) and accounting firm KPMG, for its first two commercial buildings at Barangaroo South. These pre-commitments represent 71 percent of the commercial floorspace of the two towers.
Lend Lease, however, has not announced equity partners to shoulder the finance of the project. ($1 = 0.9756 Australian dollars)
Reporting by Narayanan Somasundaram and Eriko Amaha; Editing by Chris Gallagher