What in heaven’s name is a good Catholic-owned company like Cushman & Wakefield doing putting out its 2011 results on a Good Friday? The answer is known only by the owner, the Agnelli family, and their maker.
The figures don’t seem bad enough to warrant hiding away over the Easter weekend. Revenues are up a healthy 13.4% to $2bn (£1.3bn). But is there shame over the thin profit margins? There are at least three ways US-based firms calculate margins, all confusing. EBITDA (earnings before interest, tax, depreciation and amortisation) gives an “earnings before excuses” number. US GAAP gives, well, God knows what. Net income is what it says.
At C&W the EBITDA number was up by 20% to $111m; The US GAAP number was down by $6.7m to $19m. Net income was up by $1.8m to $14.9m. These margins may seem thin in relation to $2bn of revenues. Well, yes, they are lower than CBRE’s and Jones Lang LaSalle’s margins. But not much, if you take just net income. At CBRE it was $335m on $5.9bn of revenues. JLL earned $164m on $3.6bn. But bottom-line numbers at all three firms are way lower than those at Savills and Knight Frank.
C&W’s new EMEA boss, Carlo Sant’Albano, said here on 8 July last year that he was determined to raise margins. The firm certainly feels freshly confident. Perhaps that can be demonstrated in 2013, well away from the Easter break.
NPPF entraps councils
The National Planning Policy Framework (NPPF) has entrapped one tardy council already. Permission for a 125-home development at Marston Green in Solihull has been granted on appeal. Chris Rees of Savills said the inspector made specific reference to the draft NPPF, saying: “The answer to development should, wherever possible, be yes where the [local] plan is absent, or silent.”
Councils now scrambling to draw up local plans will discover that further horrors remain in the final NPPF, according to a briefing note soon to be issued by Savills. Not only do councils have to allow for five years of land supply to cope with local population growth, they also have to “plan and assess” for the unmet needs of neighbouring boroughs.
A proviso forcing them to add 20% for luck to their numbers has been cut to 5%. But it will go back up to 20% if a “record of persistent under-delivery” emerges. Crikey! Have the Tories cracked planning?
Millican’s millions
Peter Millican is a former optician from the North East who wears seriously crazy glasses. Not the sort of chap you imagine making serious amounts of money from developing an office block-cum-arts centre near King’s Cross. But it looks like the far-seeing Millican has done well from the £235m sale of King’s Place to a German fund with a complex and instantly forgettable name.
I made a rough guess in 2008 that all-up costs were £150m for the very elegant building half-occupied by the Guardian. I also guessed that the rent roll was £10m, based on £30 per sq ft. Wrong. It looks to be just over £13m based on the 5.6% being yielded to the Germans.
Millican looks to have made many millions. Who to thank? Argent? Just over the road, at King’s Cross proper, the developer is quoting rents in the £40-£50 a sq ft range.
An Erinaceous investment
A postscript on the collapse of Erinaceous: The Easter issue of Country Life carries a loving article on Isfield Place, a listed manor house in East Sussex. Readers may recall Erinaceous went bust in 2008 owing £200m, after swallowing several agents, including Dunlop Haywards, which turned out to contain the poison pill of the McGarry valuation scandal. The “hedgehog-like” name was given to Erinaceous by founders Neil Bellis, and his sister-in-law, Lucy Cummings. The pair, along with Bellis’s wife, Julia, bought Isfield Place in 2004 for around £5m, after reportedly shouldering aside footballer Vinnie Jones. Yours now for £9.5m, via Savills.
