News
Date:
13 September 2009
Date: 13 September 2009
No: 09pr401
Knight Frank announces £20.8m profit
London, UK – Knight
Frank LLP (“Knight Frank”), the leading independent global residential
and commercial property consultancy, today announced its final results for
the year ended 30 April 2009.
Highlights
- Group turnover £255.7m (2008: £333.9m)
- Underlying group profit before tax £33.2m* (2008: £67.0m)
- Group profit before tax £20.8m (2008: £59.2m)
- Strong balance sheet - net assets £58.3m (2008: £76.2m)
- Focused cash management – net cash in bank £28.5m (2008: £53.9m)
- Unutilised five year £30m revolving credit facility
- Number of Proprietary Partners 61 (2008: 46)
- £10m kept in reserves resulting in average earnings per Proprietary
Partner of £169,000 (2008: £780,000)
Nick Thomlinson, senior partner and chairman of the Knight Frank Group said:
Overview
“We are emerging from 12 very difficult months in the global commercial
and residential property markets. Whilst our turnover has fallen in line
with the reduction in activity, we have traded profitably. We are looking
ahead to a period of stability and a much more realistic property market.
“Our desire to remain debt free and retain profits in the business
has helped further to strengthen our balance sheet, allowing us to continue
providing exceptional service and trusted advice to our clients.
“In the past 12 months, we haven’t stood still: we have refreshed
our global brand to ensure we stand out from our competitors and communicate
to our existing and future clients that we have a coherent business and are
passionately professional in everything we do.
“We have launched the pioneering new online Global Residential Property
Search drawing together the properties for sale and to let from all our offices
around the world.
“We have expanded our global office network by opening in The Netherlands,
Romania and Bahrain as we continue to provide services where our clients
need us.
“In the four months to August we have continued to trade profitably
across the group, with particular strength in our UK residential business
which has once again out-performed the market.
Residential property market outlook
“Our volume of UK residential property exchanges during August this year
was 37% higher than in August 2008 and the number of new applicants continues
to track closely last year’s pattern and volume. Current applicants
are still driving significant viewing activity, which is 90% higher this year
than last, despite stock levels being down a third from their peak.
“We are seeing properties sell more quickly and at a closer price
to their guide, compared with the same time last year. Average prices
in the prime markets, according to our indices have risen by 6% since the
Spring. However, tight supply of stock over the rest of this year could
constrain the performance of these markets.
“It now appears that house prices are starting to stabilise across
the world. The latest results from our Global House Price Index show
values increased in almost half of the locations reporting price changes
for the second quarter of the year. Significantly, quarterly price
falls slowed down in more than three quarters of the locations covered and
did not exceed 10% in any one country. This compares with double-digit
falls in a number of locations during the first quarter.
“Overall, it seems that prices are starting to bottom out around the
world. However, the market is still fragile and patchy. Further
falls are always a possibility while credit flows remain constrained and
the global economy struggles to recover from recession although it does appear
that the worst is behind us.
Commercial property market outlook
“After more than two years of downturn in the UK commercial property
market, we are finally seeing signs of recovery in our investment markets with
July marking the first positive average yield movement since mid-2007. We
still face challenging conditions, however, with our occupational markets expected
to suffer the after-effects of the recession for some time to come. It
may be 2012 before rents begin to rise again across the board but investors
will see positive returns next year as the investment market steadies.
“In continental Europe, economic sentiment has started to improve,
which has been supported by France and Germany both recording positive
GDP growth in the second quarter. However, unemployment levels
are projected to continue rising in the short term which, combined with the
existing supply/demand imbalance across the majority of the continent's occupational
markets, will continue to exert downward pressure on rents.
“A lack of available finance made investor appetite chronically
weak in the first half of the year. Some yield tightening in prime
markets has been recorded this year, but this only reflects a small portion
of the market. We are predicting that transactional volumes will improve
in the latter part of the year as counter-cyclical investors try to catch
the bottom of market. Even so, investment turnover will remain well
short of the levels seen in the boom years of the recent past.
“Positive sentiment in the Asian markets has taken a stronger hold
than has been the case in Europe. Investment volumes have already started
to pick up in the second quarter and more substantial lending in the latter
half of this year and 2010 should see further growth.
Residential and commercial professional services
“When transactional property markets are constrained, it is our professional
services teams that come into their own as our clients require trusted advice
on their existing assets, to ensure their potential is maximised and that they
are valued to the highest standards.
“The balance between our transactional and professional services activities
sets us in good stead for the future. We remain a well diversified
business across both residential and commercial, and it is this approach
that continues to be our strategy.
Corporate responsibility
“Our corporate responsibility activities have increased and we continually
seek to improve our social and economic contribution and minimise any environmental
impacts of our business. In the UK, we reduced energy consumption by
18% per person.
“We are proud to continue sponsoring our charity of choice, LandAid
and support employee fundraising activities which most recently included
our Head of Healthcare who walked to the North Pole in sub -60c temperatures
raising £10,000 for Myeloma UK.
Our people
“Our staff remain the lifeblood of our business. Recently they
have had to work harder than ever and I would like to acknowledge their commitment
and passion which do not go unnoticed.
“Looking to the future, we are well positioned to make the most of
any upturn, not only because we have the very best teams but because as a
business, we are in great shape.”
For further information, please contact:
Nick Thomlinson |
Senior partner and chairman, Knight Frank |
+44 (0)20 7861 1001 |
Olivia Lane-Nott |
Global head of marketing & communications,
Knight Frank |
+44 (0)20 7861 1035
+44 (0)7768 021 873 |
Notes to Editors:
* after adjusting for amortisation of intangibles: £4.6m (2008: £4.0m),
restructuring costs: £7.8m (2008: £nil), Head Office relocation
costs: £nil (2008: £3.0m), impairment of investments: £nil
(2008: £1.4m), and past service cost credit in respect of pension liability: £nil
(2008: £-0.6m)
Knight Frank LLP is the leading independent global property consultancy.
Headquartered in London, Knight Frank and its New York-based global partner,
Newmark Knight Frank, operate from 207 offices, in 43 countries, across six
continents. More than 6,340 professionals handle in excess of US$886 billion
(£594 billion) worth of commercial, agricultural and residential real
estate annually, advising clients ranging from individual owners and buyers
to major developers, investors and corporate tenants. For further information
about the Company, please visit www.knightfrank.com.
Knight Frank LLP Consolidated Profit and Loss Account
Year ended 30 April 2009
|
2009 |
2008 |
|
£M |
£M |
|
|
|
Turnover |
255.7 |
333.9 |
|
|
|
Operating profit |
19.0 |
55.0 |
|
|
|
Share of operating profits of associated
undertakings |
0.7 |
1.7 |
Profit before interest and taxation |
19.7 |
56.7 |
Interest receivable and similar income |
1.9 |
2.8 |
Interest payable and similar charges |
(0.8) |
(0.3) |
|
|
|
Profit on ordinary activities before
taxation |
20.8 |
59.2 |
Tax on profit on ordinary activities |
(1.0) |
(5.0) |
|
|
|
Profit on ordinary activities after
taxation |
19.8 |
54.3 |
|
|
|
Minority interest – equity |
- |
(0.6) |
|
|
|
Profit for the financial year
available for division amongst Members |
19.8 |
53.7 |
|
|
|
Knight Frank LLP Consolidated Balance Sheet
Year ended 30 April 2009
|
2009 |
2008 |
|
£M |
£M |
|
|
|
Fixed assets |
20.5 |
27.1 |
|
|
|
Current assets |
|
|
Cash at bank and in hand |
31.0 |
55.7 |
Other net current assets |
22.2 |
12.3 |
|
|
|
Net current assets |
53.2 |
68.0 |
|
|
|
Total assets less current liabilities |
73.7 |
95.1 |
|
|
|
Creditors: amounts falling due
after more than one year |
(3.3) |
(3.3) |
|
|
|
Provisions for liabilities and
charges |
(6.0) |
(7.0) |
|
|
|
Net assets excluding pension liabilities |
64.4 |
84.8 |
|
|
|
Pension liabilities |
(6.1) |
(8.6) |
|
|
|
Net assets attributable to Members |
58.3 |
76.2 |
|
