Companies: DTZ   

Shares in international property adviser DTZ Holdings fell 20 per cent today after the company revealed that pre-tax profits were down 58 per cent to £3.2 million in the six months to October, with earnings per share slashed 86 per cent to 1.29p after exceptional costs. Ben Cobley reports.

Blaming difficult economic conditions and a 'disproportionately high' comparative profits figure in 2001, fully-listed DTZ reveals it incurred £2.1 million of exceptional costs in the first half, arising from a review of German operations and resulting redundancies.

The second half will apparently show a big improvement on last year, but a further £3 million of exceptional costs will come from further staff cuts in Europe, Australia and the UK. Chairman Tim Melville-Ross says this will be recovered from savings within a year.

DTZ is to sell its 50 per cent stake in Curzon Global Partners to American joint venture partner AEW Capital Management (part of French investment giant CDC Asset Management). DTZ will receive £5.8 million, for an estimated £4.4 million exceptional profit.

DTZ's share of Curzon had net liabilities of £2.4 million at the end of April, having lost £800,000 the previous year because of set-up and development costs.

However, the company is holding to its international ambitions. It intends to reach 'the point where we are able to offer a complete service to our clients worldwide'.

But its strength remains the UK, where it was involved in £575 million of property transactions in the first half. Shopping centres proved particularly lucrative.

DTZ handled the £65 million purchase of Shelley House by Munich Ergo Real Estate fund and the £88 million sale of 100 Leadenhall Street (both in the City of London) for Morley Fund Management. The company secured the Department of the Environment, Food and Rural Affairs as a tenant for Kier's 90,000 sq. ft. Whitehall Place development.

Melville-Ross says full-year results 'are likely to be somewhat lower than those in the year to 30 April 2002', when DTZ made £12.7 million pre-tax.

At 61p, an all-time low, the share price values DTZ at £32.1 million. It proposes to hold its interim payout at 2.25p.