Profit has been slashed at the UK arm of global real estate services giant JLL as “increased market uncertainty” hit its earnings.
The London-headquartered division has reported a pre-tax profit of £21.9m for 2023, down from the £60.9m it achieved in 2022.
Newly-filed accounts with Companies House also show that its turnover reduced from £460m to £426.7m in the year.
JLL said its turnover fell because of “increased market uncertainty” caused by rising inflation and interest rates which caused delays in capital market transactions being completed.
However, the firm added that it “continued to remain profitable” because of a balance in revenue streams “demonstrating a high level of resilience in the overall business model throughout the economic cycle”.
JLL said that it expected to see an upturn in capital market transactions and turnover in 2024 “as inflation and interest rates stabilise”.
The business also said that its operating profit fell from £39.3m to £2.5m because of the fall in turnover as its admin expenses remained similar to 2022.
As a result of its reduced financial performance, JLL did not pay an interim dividend during the year, having issued one totalling £60m in the prior 12 months.
As well as its offices in London, JLL has UK locations in Birmingham, Bristol, Cardiff, Edinburgh, Exeter, Glasgow, Leeds, Manchester, Norwich and Nottingham.
JLL forecasts 2024 recovery
For the same financial year the wider JLL group, which is listed on the New York Stock Exchange, reported a revenue of $20.76bn (£15.87bn), down from $20.86bn (£15.95bn).
Its adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) also fell from $1.24bn (£948.3m) to $736.7m (£563.5m).
At the time, chief executive Christian Ulbrich said: “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.
“With a focus on operating efficiency, we drove improved cash generation while continuing to invest in our platform.
“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.
“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.”