Posting DKK 34.5m pre-tax profits, Colliers fared rather well in a year that saw a sharp decline in market activity. EBITDA was just shy of DKK 59 million. Against the backdrop of the current economic situation due to COVID-19, however, it is difficult to believe that market activity will be brisker in 2020 than in 2019, but uncertainty remains substantial.
In 2019, transaction volume in the investment property market dropped by some 20% relative to 2018. Against this backdrop, Denmark’s largest commercial property advisor is content with the annual results.
“It is true that we close the books on 2019 with a poorer result that in 2018, but in a wider context it is important to remember that 2018 was a really good year for us, and we had no hopes of repeating it in a slowing market. Already when drawing up our budgets, we foresaw that 2019 would hardly become a golden year”, says CEO Peter Winther in a commentary on the result for the year.
“Our earnings derive mainly from the transaction market, which slowed considerably in 2019. I am therefore quite pleased that we under these circumstances managed to retain our absolute market leadership. We succeeded in facilitating the five biggest sales transactions; indeed, we experienced a softer percentage setback than the market in general”, claims Peter Winther.
The fact that Colliers has done relatively well also ties in with the fact that the company has not been averse to investing in highly qualified employees.
Over the past 12 months, we have sharpened our skills to meet the increasingly exacting demands of the most professional domestic and international clients. We therefore have higher payroll costs, but on a strategic level we have decided to invest in attracting, retaining and nurturing the best talents. We consider it an investment in safeguarding our future business foundations, and we believe that we already this year will see the effects of this strategy”, says Peter Winther. However, he sees some dark clouds on the horizon right now due to the current coronacrisis.
“This is like nothing we have ever seen before. Not by a long shot. At the best of times, it is hard to predict the future, but if possible, it has become even more difficult now. Already in the initial phase of the crisis, several of our top clients announced that they were pulling the emergency brakes, halting market activities until this autumn at the earliest. But in this respect too, uncertainty remains substantial as nobody is currently able to venture a feasible guess as to how it will all pan out. The only thing left for me to say with absolute certainty is that 2020 will not see market activity picking up as anticipated at the beginning of the year; The market cannot possibly recover sufficiently if major investors do not enter the market until this autumn”, says Peter Winther.
Apart from higher wage expense, the 2019 annual result is affected by substantial amortisation of goodwill on the heels of the merger with Sadolin & Albæk in 2018.
Colliers is part of listed Colliers International Group Inc., which chooses not to publish turnover figures on country but only regional level.