DTZ reports 44% increase in group revenue but profits down

Property adviser DTZ posted a 44% increase in group revenue to £446mln (EUR 561mln) up from £310mln (EUR 390mln) for the same period in 2007, in its preliminary results for the year ended 30 April 2008. The increased revenue was achieved through the impact of acquisitions such as Donaldsons and Barnicke as well as ongoing diversification and globalisation, the company said in its statement.

On a like-for-like basis, excluding the impact of acquisitions, the results showed a 15% increase in group revenue to £356mln. Despite this increase in revenue, profit before tax and exceptional items reduced by 46% to £21mln (down from £38mln in 2007). The company said 'this was largely the result of the change in mix of our income streams with our capital markets business particularly affected by difficult economic conditions, the delay between recruitment of additional staff and their capacity to generate revenue, and adverse trading conditions.'

Group profit before tax, after exceptional items, was also down to £5.6 mln (from £42 mln in 2007). The company statement explained that 'in the light of the degree of exposure of DTZ Rockwood and our other investments in North America to these conditions, we have decided to make an impairment charge of £11.7 mln against these investments. We are also making exceptional charges to reflect the reorganisation costs associated with the Donaldsons acquisition and redundancy charges associated with the staff reductions needed in the light of prevailing market conditions.'

Given the current economic conditions, the board said that it will recommend a reduction in the final dividend to 3.0 pence per share (down from 8.0 pence in 2007) bringing the total dividend for the year to 6.5 pence per share (down from 11.5 pence in 2007).