Colliers CRE – Buy

Once again it was a good year for real estate consultancy services group Colliers CRE. Formerly known as Fitzhardinge, 2004's pre-tax profits soared 65% to £4.4m on an 18% improvement in its fee income to £66.8m.

The company extracts 95% of its revenue from its surveying and property consultancy business Colliers CRE and it is the second largest business under the Colliers International umbrella of independent property consultancies. It also has a joint venture co-investment subsidiary Deanwater and property fund management arm Colliers Capital. Notable transactions during the year included two large disposal programmes for retailers Dixon and Virgin, and a letting of a 600,000 sq ft site in Daventry to Tesco. The office division enjoyed the continuing take-up of office space in the City and, although the West End is quiet, its team increased revenue by 75%. In 2004, Colliers CRE focused on consolidating its expansion by upgrading all of its offices and investing in IT to bring all its subsidiaries onto one system. In addition two acquisitions, Fletcher King in Manchester and Campbell & Co in Glasgow, were made to boost and integrate its retail and 'professional' services. Managing director David Izett expects to make more acquisitions in 2005 including sectors it does not cover and companies that can bolster existing business. The market had expected pre-tax profits to rise to £6.7m in 2005, but new forecasts are expected imminently. We advise that you continue to buy into this well run company.