Former Lendlease boss Steve McCann sported a picture of his racehorse Demerger behind his desk in Sydney’s Sussex Street from where the powerful executive oversaw the $6 billion Barangaroo complex take shape and his company’s rise into a sprawling $13.8 billion global developer.
Its mantra of growth, performance and no nasty surprises made it a top 10 company with “bulletproof” earnings and 25 consecutive years of profit growth. But now it has plunged down the corporate pecking order. Nasty surprises are common, and its shares have fallen from 1999 highs of $23.67 to $6.43 and a $4.4 billion market cap.Some say the company is too complex, a convoluted, diversified beast split between construction, development and fund management.
His strategy kicked off in August 2021 with 400 jobs cut. He consolidated and simplified Australian operations by merging property and construction, and focusing on Lendlease’s $8 billion development pipeline. Barangaroo was steadily sold down. The jobs cuts added to the 4000 staff who went following the sale of the engineering and services arm.
Wylie said a conglomerate business model is only effective if its divisions are successful under independent ownership. “None of your divisions presently make an adequate operating margin or return in investment capital, so the conglomerate structure simply aggregates three underperforming businesses,” he wrote in the letter.Former staffers believe the board should be scrutinised for its lack of real estate experts.
Di Pilla is less combative than Wylie, and while he supports Lombardo, he is also looking for action.
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