The two fiercest property services firm rivals, CBRE and Jones Lang LaSalle, have this week posted third quarter results. Estates Gazette takes a look at how they measure up.
Both firms delivered strong top line growth in the three months to the end of September as expected from an improving market, but JLL had the better quarter in terms of revenue growth up 19% against CBRE’s 11%.
JLL generated $1.1bn (£683m) in global revenue up 19% from $949m the same time last year. CBRE, the world’s largest property services firm in terms of revenue with more than 34,000 employees in 300 offices (excluding affiliates) worldwide, posted an 11% like-for-like increase from $1.6bn to $1.7bn (£1.1bn).
Looking at the bottom line JLL, which has more than 40,000 people in 1,000 locations in 70 countries, delivered adjusted net income of $67m – a 22% hike from $55m the previous year. CBRE lagged slightly here in terms of growth posting a 19% increase in net income to $99.7m.
On a US GAAP basis CBRE’s net income growth surged ahead of JLL, more than doubling from an admittedly low base of $39.7m to $94.4m, while JLL still had a strong quarter delivering a 26% rise to $63m.
Going head-to-head on EBITDA (earnings before interest, taxes, depreciation and amortization), CBRE was once again ahead with a 37% leap from $163.5m to $224.4m, compared with JLL’s 15% rise from $102m to $118m.
The companies both delivered an increase in earnings per share but JLL delivered the greatest increase of 21% to $1.49 for the third quarter, while CBRE’s increased 15% from $0.26 to $0.30.
After announcing its results yesterday morning CBRE’s shares rose 4.23% to $24.40, reflecting a market capitalisation of $8.1bn. This morning after its announcement JLL’s shares have risen 12.4% to $95.6 giving it a market cap of $4.2bn.
EMEA
Looking at EMEA revenue, JLL performed better over the period with a 30% increase to $318.4m ahead of CBRE’s turnover of $285.5m which was up by a quarter. Both firms reported double-digit revenue growth in every service line.
JLL said its adjusted operating income, which excludes King Sturge amortization, was $18m for the quarter compared with $5m in 2012. CBRE posted operating income of $12.6m compared with an operating loss of $31.7m the previous year when the firm took a $20m non-cash write off of a trade name in the UK, and other cost-containment expenses.
Year-to-date
With the final – and traditionally busiest – quarter still to come, CBRE has generated global revenue of $4.95bn in the year to September, an increase of 10% from this time last year. Comparing growth this is on par with JLL which is also up 10% on last year to almost $3bn revenue.
On a US GAAP basis, CBRE’s net income has leapt 42% over the year to $202m compared with JLL, which has so far delivered a 21% rise to $122m.
CBRE’s EBITDA has increased 21% to $624.6m while JLL’s has grown 6% to $268m.
Bridget.O’Connell@estatesgazette.com
