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IDC Earnings per Security: $0.337 per security for FY26, at the top end of guidance.
Statutory Loss After Tax: $749 million, including $182 million of non-cash negative investment property revaluations and impairments.
Group Operating Profit After Tax: Loss of $567 million, comprising a positive $233 million contribution from IDC and a loss of $800 million from CRU.
IDC Segment EBITDA: $542 million, reflecting a broadly stable investments result and strong recovery in construction.
CRU EBITDA Loss: $500 million, including $196 million of operating costs and $340 million of asset impairments.
Corporate Costs: $221 million, including an underlying cost base of $107 million and $114 million of additional charges.
Net Finance Costs: Lower at $194 million, benefiting from hybrid securities issuance and higher interest income.
Net Overheads: Reduced by 22% to $363 million in FY26, from $466 million in FY25.
Reported Gearing: 30.3% at year-end; underlying gearing was 37.7%.
Full-Year Distribution: $15.7 per security.
Construction Revenue: $3.9 billion, up 29% on FY25.
Construction EBITDA: $167 million, with an EBITDA margin of 4.3%, above the target range.
New Work Secured (Construction): $6.4 billion, up 28% on FY25.
Backlog Revenue: $8.4 billion, up 42%.
Development EBITDA: $78 million, reflecting lower anticipated completions, with a development ROIC of 3%.
Investment Management EBITDA: $297 million, supported by $136 million of other EBITDA from transaction earnings.
Management EBITDA Margin: 35.9%, compared with 40.6% in FY25.
CRU Transactions Contracted: $1.2 billion in FY26; remaining invested capital balance of $2.5 billion.
FY27 IDC Earnings Guidance: $0.37-$0.41 per security, reflecting circa 16% EPS growth at the midpoint.
Release Date: August 17, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
IDC earnings per security of $0.337 for FY26 were at the top end of guidance, with FY27 guidance of $0.37-$0.41 indicating ~16% EPS growth at the midpoint.
Construction segment delivered a strong performance with EBITDA margin of 4.3%, above the target range, supported by a 29% revenue increase and a record $6.4 billion in new work secured.
Development pipeline grew to $13.2 billion, including high-quality projects like Sydney’s Metro Hunter Street West and 175 Liverpool Street, with a strong completion profile of over $8 billion from FY27 to FY29.
Capital recycling progress was made with $1.2 billion in CRU transactions contracted, including the sale of TRX retail and office interests and the divestment of Keyton Retirement Living, reducing CRU invested capital to $2.5 billion.
Net overheads were reduced by 22% to $363 million, with an exit run rate of ~$350 million, reflecting continued cost-saving initiatives.
New partnerships were established, including a mandate with Malaysia’s largest public pension fund and a $1.1 billion modernization opportunity in Japan, with Lendlease co-investing at 5% or less.
Strong liquidity of approximately $4 billion was maintained, with investment-grade credit ratings confirmed by Moody’s and Fitch.
The Impact Partnership Joint Venture with The Crown Estate became operational, with three of six projects transferred, expected to contribute additional profits in FY27.
Negative Points
Group recorded a statutory loss after tax of $749 million, including $182 million in non-cash negative investment property revaluations and impairments.
CRU segment reported an EBITDA loss of $500 million, driven by $340 million in asset impairments and $92 million in provisions for retained international construction risks.
Reported gearing was elevated at 30.3%, with underlying gearing at 37.7%, well above the 15% target, and no security repurchases were undertaken due to high gearing.
Investment management EBITDA margin declined to 35.9% from 40.6% in FY25, due to a $5 billion reduction in FUM and lower fee revenues.
Development EBITDA was subdued at $78 million, reflecting limited completions in FY26 and a development ROIC of only 3%.
Corporate costs included $114 million in additional charges, including restructuring costs related to international operations and finance/ICT transformation initiatives.
Net debt increased due to delays in capital recycling and high capital expenditure, with gearing expected to remain elevated at the half-year of FY27.
The company incurred a material tax expense despite an operating loss, due to impairment of deferred tax assets and non-recognition of tax benefits in the US and UK.
Q & A Highlights
Q: Can you explain the gap between the pro forma gearing of 30.2% and the previous target of 15%, and what specific asset sales have been delayed?A: Andrew Nieland (CFO and Joint Interim CEO) attributed the gap primarily to transaction timing and the pace of working through commercial real estate transactions. He declined to specify which particular transactions were delayed, stating only that processes continue to progress across the CRU portfolio.
Q: What are the key drivers and bookends for the FY27 IDC earnings guidance of $0.37-$0.41 per security?A: Andrew Nieland (CFO and Joint Interim CEO) explained that the lower end of the range depends on the success of growing the investment pipeline, while the upper end is driven by progress on sales and settlements at One Circular Quay and Victoria Harbour, construction execution, and where interest costs land relative to the capital recycling trajectory.
Q: Can you provide color on the $2.5 billion of CRU capital still to recycle, the processes underway, and the biggest hurdles to achieving the next wave of asset sales?A: Andrew Nieland (CFO and Joint Interim CEO) broke down the $2.5 billion into approximately $600 million in recently completed joint venture projects (focused on stabilization), $1.7 billion in international land and inventory (with multiple processes underway in recovering markets), and balance inventory (such as US condo sales). The hurdles vary by market, with some markets still in recovery.
Q: How should investors think about the path from the current pro forma gearing of 30.2% down to the 15% target, and what are the time frames?A: Andrew Nieland (CFO and Joint Interim CEO) stated the group is coming off a peak CapEx cycle, but FY27 should see a more neutral cash profile with settlements from One Sydney Harbour, One Circular Quay, and Victoria Harbour. He highlighted multiple deleveraging levers, including $1 billion to $1.5 billion of recyclable capital in investments and development, CRU transactions, and working capital improvements, rather than relying on a single path.
Q: What is the progress on One Circular Quay sales, particularly for the high-end penthouses, and how is that reflected in FY27 earnings guidance?A: Penny Ransom (Joint Interim CEO and CEO of Investment Management) noted the project is over 80% sold with strong interest, though buyers are taking more time due to market uncertainty. Andrew Nieland (CFO and Joint Interim CEO) added that a large portion of FY27 earnings from settlements is secured, with the unsold stock representing a source of variance within the guidance range, but not the majority of the margin.
Q: Can you provide more detail on the $1 billion to $1.5 billion of potential realizations within the investment business?A: Andrew Nieland (CFO and Joint Interim CEO) indicated this includes positions with high co-investment percentages where aligned partners are also seeking liquidity, citing the recent UK build-to-rent portfolio divestment as an example. Penny Ransom (Joint Interim CEO and CEO of Investment Management) added that market processes will determine outcomes, balancing recycling against value realization.
Q: What is the outlook for the construction business given the strong second-half margin of 4.9%?A: Andrew Nieland (CFO and Joint Interim CEO) acknowledged the strong result reflects good project team execution on closing out projects. He noted the business enters FY27 with its largest revenue backlog in memory at $8.4 billion, with revenue expected to grow circa 4.5%, while maintaining the 3% to 4% target margin range through the cycle.
Q: What are you budgeting for CRU overheads and other key items heading into FY27, given no formal guidance is provided?A: Andrew Nieland (CFO and Joint Interim CEO) noted the FY26 underlying cost base was circa $190 million, with actions underway to reduce costs ahead of asset sales. He flagged approximately a couple of hundred million in remaining CapEx for the segment. He declined to provide more specifics, as outcomes depend on the rate of capital transactions.
Q: What factors contributed to the decline in the management EBITDA margin, and will it bounce back in FY27?A: Andrew Nieland (CFO and Joint Interim CEO) attributed the decline to fund reductions and asset sales, with the margin now at circa 35% (40.1% including transaction earnings). Penny Ransom (Joint Interim CEO and CEO of Investment Management) added that FUM reduced by $5 billion, with 60% from natural development partnership conclusions, and noted the focus is on growth through new mandates in Malaysia and Japan.
Q: Can you provide an update on the leasing conditions at Victoria Cross and the level of buyer interest?A: Penny Ransom (Joint Interim CEO and CEO of Investment Management) reported the office is just over 40% leased and retail over 95%, with significant interest in the remaining space. The asset is now practically complete (TPC), and its unique positioning above the new station is attracting a range of tenants from various locations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.