The UK branch of global real estate services titan JLL has seen a significant cut in profit due to “increased market uncertainty” impacting its earnings. The London-based division reported a pre-tax profit of £21.9m for 2023, a substantial decrease from the £60.9m it posted in 2022.
According to recently filed accounts with Companies House, the firm’s turnover also fell from £460m to £426.7m over the year. JLL attributed this decline to “increased market uncertainty”, triggered by rising inflation and interest rates, which led to delays in capital market transactions, as reported by City AM.
Despite these challenges, the company maintained that it “continued to remain profitable” due to a balanced mix of revenue streams, showcasing a high level of resilience in its overall business model throughout the economic cycle. Looking ahead, JLL anticipates an upturn in capital market transactions and turnover in 2024 as inflation and interest rates stabilise.
The company also revealed that its operating profit dropped from £39.3m to £2.5m due to the fall in turnover, while its administrative expenses remained similar to those in 2022. Consequently, JLL did not issue an interim dividend during the year, having distributed one totalling £60m in the previous 12 months.
In addition to its London headquarters, JLL operates offices in Birmingham, Bristol, Cardiff, Edinburgh, Exeter, Glasgow, Leeds, Manchester, Norwich, and Nottingham. The firm is forecasting a recovery in 2024.
For the same financial year, the broader JLL group, which is listed on the New York Stock Exchange, posted a revenue of $20.76bn (£15.87bn), a slight decrease from $20.86bn (£15.95bn).
The company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) also saw a drop from $1.24bn (£948.3m) to $736.7m (£563.5m).
Christian Ulbrich, the chief executive, commented: “JLL’s fourth-quarter and full-year 2023 operating results reflected strong growth within our resilient business lines in the face of the market-wide pullback in transaction activity and elevated geopolitical uncertainty.”
He added: “With a focus on operating efficiency, we drove improved cash generation while continuing to invest in our platform.”
Ulbrich further noted: “As business confidence globally begins to improve alongside greater stability in interest rates, we expect transaction activity will pick up over the course of the year.”
He concluded by saying: “Our global platform, industry insights and people uniquely position us to seize significant growth opportunities across the commercial real estate industry in the coming years while continuing to provide exceptional service to our clients.”
Like this story? Why not sign up to get the latest business news straight to your inbox.
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
