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Property development and construction firm Lendlease Group says it is well placed for the the 2016/17 financial year despite mixed market conditions.

“We are well placed heading into FY17 given our financial strength and earnings visibility, despite mixed market conditions” group chief executive Steve McCann told shareholders at the company’s annual general meeting on Friday.

The outlook for the company’s engineering business was strong, with a meaningful improvement in earnings likely from 2018 and onwards.

Mr McCann said Australia would remain the dominant region in Lendlease’s business, but capital deployment would incrementally reweight offshore over coming years.

Activity would progressively shift to “gateway cities” around the world – cities considered to be resilient and “best performing” and which, due to their history, age and location, contain large sites ripe for regeneration and infrastructure upgrades.

“That shift reflects our view on the relative outlook and opportunity in the regions in which we operate, and the importance of earnings diversity,” Mr McCann said.

Financial strength remained a priority of the group given an uncertain external operating environment.

“That means we will continue to be extremely disciplined with the use of our capital,” Mr McCann said.

Lendlease Group chairman David Crawford said the company had entered the 2017 financial year in a very strong financial position, with cash and cash equivalents of more than $1 billion, gearing of 6.5 per cent and undrawn capacity of more than $2 billion.

He said a resilient balance sheet, and access to third-party capital provided the group with the financial flexibility to fund its development pipeline and pursue growth opportunities.

“We believe Lendlease is well placed to maintain its leadership position in the sectors in which it operates,” Mr Crawford said.

“Both our development and construction pipelines continue to grow and, combined with the investments platform, provided strong earnings visibility.”

Lendlease booked a 13 per cent rise in annual net profit to $698.2 million for the year to June 30, 2016.

 
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