Profit margins flat for Cushman, rise for HFF

Revenues rose by double digits for the five commercial services firms that have publicly reported full year earnings for 2011, but the profit margins among the group were uneven. Cushman & Wakefield, the global services firm based in Midtown, reported this morning gross revenues of $2 billion in 2011, a 13 percent increase over 2010. That was its second-highest level ever, only behind $2.1 billion reached during the height of the boom in 2007. The figures were released following a meeting of its Italian parent company, Exor. See charts below comparing each firm’s revenue with its EBITDA figures.

Yet the firm’s earnings before taxes and other expenses, known as EBITDA, only rose slightly, yielding an EBITDA margin of 5.6 percent, far below rivals CBRE Group and Jones Lang LaSalle, which each had ratios above 11 percent.

The company was able to “benefit from significant improvements in market conditions in the first half of the year and to finish with improved performance and transaction volume despite a challenging fourth quarter for the sector,” said Glenn Rufrano, Cushman’s president and CEO.

The much smaller brokerage Holliday Fenoglio Fowler, with revenues of $254.7 million in 2011, had an EBITDA margin of 27 percent, more than double any of its public rivals. The Pittsburgh, Penn.-based firm reported earnings in March.

CBRE posted revenues of $5.9 billion in 2011, up 14 percent from the prior year; and JLL reported revenues of $3.6 billion, up 22 percent from the prior year. Both reported earnings in February.

The last of the publicly reported firms, Colliers International, a division of Toronto-based First Service, also in February posted revenue of $994.6 million, up 15 percent from 2010. Its EBITDA margin was 5.2 percent.

Click on charts for larger version