One day after being the first major business to pull out of MIPIM as a result of the coronavirus, Cushman & Wakefield released its results for the full year.
Revenues for the year ended 31 December, increased by 6% to $8.8bn (£6.9bn), with fee revenue up by 8% to $6.4bn and EBITDA up by 10% to $724.4m.
Executive chairman and chief executive Brett White said: “2019 was a great year for Cushman & Wakefield on many levels. In addition to delivering strong revenue, adjusted EBITDA and margin growth, we completed a comprehensive review of our business and key client segments which focused on the buying preferences and needs of our clients, as well as a review of our industry’s current service delivery model. We created a new roadmap for the future that will allow us to be a nimbler and more agile partner to our clients, while also driving operational efficiency through significant adjusted EBITDA and margin growth in 2020.”
White played down the impact of coronavirus on the business, saying it was an issue at the moment but “isn’t an issue forever”.
However, White did admit that transactional activity in Hong Kong was down in the fourth quarter, caused by both the Hong Kong protests and coronavirus. “But what you always see in these situations, and what we would expect to see here, is a strong snap back when the issue goes away,” he said.
He added: “Unlike some other economic drivers that are more structural, we would expect that if you lose activity during the issue, that activity comes back, incremental to normal activity, in the subsequent quarters. So at the moment, I wouldn’t say we’re sanguine. We’re not. There’s a lot of work we’re doing right now to make sure our employees are safe and well taken care of and our clients are well taken care of.
“But we are not seeing, other than in Hong Kong, any impact on activity right now. Our business is one where transactions are worked on for a very long time, both in the leasing and in the capital market space. People don’t tend to stop those transactions over issues like this. People will slow down transactions in a real economic decline, so what we watch for really is the impact on GDP. And that is unknown at the moment. If coronavirus has a material, sustained impact on GDP, we’re going to see a slowdown in transaction activity. But, at the moment, that is not what’s being forecast.”
Cushman’s EMEA business performed in line with the group, with total revenues increasing by 4% to $1bn, with double-digit increases in property, facilities and property management (up by 18% to $308.2m) and a marginal decline in leasing (down by 5% to $250.8m). EBITDA for EMEA was down by 7% to $100.4m.
White said more certainty around Brexit following the result of the General Election in December, coupled with a low interest rate environment, was an “enabler” for transactions.
“At the moment, as we look at 2020, I think we feel pretty good about the capital markets business,” said White. “But I wouldn’t say that you should expect higher growth rates or materially lower growth rates in 2020 than you saw in 2019.”
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